FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended Commission File
June 30, 1996 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the IRS Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
As of August 1, 1996, there were 55,591,779 shares of Common Stock
outstanding.
Page 1 of 13 Pages<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page(s)
PART I - Financial Information
Consolidated Statement of Income for the quarters and
six months ended June 30, 1996 and 1995 . . . . . . 3
Consolidated Balance Sheet as of June 30, 1996,
December 31, 1995 and June 30, 1995 . . . . . . . . 4
Consolidated Statement of Cash Flow for the six months
ended June 30, 1996 and 1995 . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . 6
Management's Analysis of Operations and
Financial Condition . . . . . . . . . . . . . . . . 7-8
PART II - Other Information
Item 1 - Legal Proceedings . . . . . . . . . . . . . . . 8
Item 2 - Changes in Securities . . . . . . . . . . . . . 9
Item 4 - Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . 9
Item 6 - Exhibits and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . 10
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 11<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
Quarter Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 713,698 $ 727,519 $ 1,338,504 $ 1,401,788
---------- ---------- ---------- ----------
Operating expenses
Cost of sales 534,591 547,336 1,006,590 1,043,331
Selling, general and administrative 81,319 85,500 154,554 162,903
Depreciation 22,668 24,519 44,379 49,170
---------- ---------- ---------- ----------
638,578 657,355 1,205,523 1,255,404
Operating income 75,120 70,164 132,981 146,384
Interest income 7,671 8,432 15,011 15,102
Interest expense (34,949) (41,452) (70,116) (82,869)
Other income, net 247 551 441 977
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 48,089 37,695 78,317 79,594
Income taxes (5,000) (5,600) (11,000) (13,900)
Income from continuing operations 43,089 32,095 67,317 65,694
Discontinued operations -- 2,035 -- 6,064
Income before extraordinary item 43,089 34,130 67,317 71,758
Extraordinary loss from debt refinancing (5,556) (4,713) (5,556) (4,713)
Net income $ 37,533 $ 29,417 $ 61,761 $ 67,045
========== ========== ========== ==========
Weighted average number of common
shares outstanding (see Exhibit 11) 55,984 53,907 55,952 53,694
========== ========== ========== ==========
Earnings per common share:
Primary - Continuing operations $ .73 $ .55 $ 1.13 $ 1.15
- Discontinued operations -- .04 -- .11
- Extraordinary item (.10) (.08) (.10) (.09)
---------- ---------- ---------- ----------
- Net income $ .63 $ .51 $ 1.03 $ 1.17
========== ========== ========== ==========
Fully diluted - Continuing operations $ .68 $ .52 $ 1.06 $ 1.07
- Discontinued operations -- .03 -- .10
- Extraordinary item (.09) (.07) (.09) (.08)
---------- ---------- ---------- ----------
- Net income $ .59 $ .48 $ .97 $ 1.09
========== ========== ========== ==========
Dividends per common share $ .05 $ .05 $ .10 $ .10
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION> CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands, except share amounts)
June 30, 1996 December 31, 1995 June 30, 1995
<S> <C> <C> <C>
ASSETS
Current assets
Cash and equivalents $ 205,338 $ 236,675 $ 227,787
Marketable securities 66,865 34,743 --
Trade receivables (less allowances
of $11,105, $11,310 and $14,842) 218,451 184,364 233,633
Other receivables, net 87,023 89,848 89,492
Inventories 251,280 293,379 287,358
Other current assets 30,767 37,827 33,808
---------- ---------- ----------
Total current assets 859,724 876,836 872,078
Restricted cash 39,520 39,520 77,530
Net assets of discontinued operations -- -- 56,785
Property, plant and equipment, net 1,158,226 1,182,144 1,340,630
Investments and other assets 352,049 356,805 326,105
Intangibles, net 166,150 168,228 155,942
---------- ---------- ----------
Total assets $ 2,575,669 $ 2,623,533 $ 2,829,070
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 91,565 $ 119,456 $ 115,392
Long-term debt due within one year 53,762 52,877 76,679
Accounts payable 224,959 206,717 239,052
Accrued liabilities 108,425 130,893 128,130
---------- ---------- ----------
Total current liabilities 478,711 509,943 559,253
Long-term debt of parent company 780,663 840,925 840,644
Long-term debt of subsidiaries 394,515 401,121 532,031
Accrued pension and other employee benefits 86,420 85,514 74,286
Other liabilities 107,952 113,823 114,317
---------- ---------- ----------
Total liabilities 1,848,261 1,951,326 2,120,531
---------- ---------- ----------
Shareholders' equity
Preferred and preference stock 138,369 138,369 190,639
Capital stock, $.33 par value (55,561,291,
54,769,140 and 50,384,019 shares) 18,520 18,256 16,795
Capital surplus 583,861 581,019 513,398
Retained earnings (deficit) (13,342) (65,437) 2,831
Minimum pension liability adjustment -- -- (15,124)
---------- ---------- ----------
Total shareholders' equity 727,408 672,207 708,539
---------- ---------- ----------
Total liabilities and shareholders' equity $ 2,575,669 $ 2,623,533 $ 2,829,070
========== ========== ==========
</TABLE> See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
(In thousands)
Six Months Ended June 30,
1996 1995
<S> <C> <C>
Cash provided (used) by:
Operations
Income from continuing operations $ 67,317 $ 65,694
Depreciation and amortization 48,141 52,144
Write-down of Costa Rican banana
producing assets 8,900 --
Changes in current assets and liabilities 12,678 (4,626)
Other (1,803) (1,881)
---------- ----------
Cash flow from operations 135,233 111,331
---------- ----------
Investing
Capital expenditures (32,652) (29,767)
Restricted cash deposits -- (2,500)
Proceeds from sales of transportation
assets and other divestitures 5,350 12,208
Increase in marketable securities (39,235) --
Other 1,373 3,344
---------- ----------
Cash flow from investing (65,164) (16,715)
---------- ----------
Financing
Debt transactions
Issuances of long-term debt 23,738 196,712
Repayments of long-term debt (94,219) (209,132)
Decrease in notes and loans payable (25,497) (7,726)
Stock transactions
Issuances of capital stock 4,238 942
Dividends (9,666) (9,142)
---------- ----------
Cash flow from financing (101,406) (28,346)
---------- ----------
Discontinued operations -- (4,006)
---------- ----------
Increase (decrease) in cash and equivalents (31,337) 62,264
Balance at beginning of period 236,675 165,523
---------- ----------
Balance at end of period $ 205,338 $ 227,787
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Interim results are subject to significant seasonal variations
and are not necessarily indicative of the results of operations
for a full fiscal year. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary for a fair statement of the results of the interim
periods shown have been made. See Notes to Consolidated
Financial Statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 for additional
information relating to the Company's financial statements.
In December 1995, the Company's remaining meat operations were
sold to Smithfield Foods, Inc. As a result, the Meat Division is
accounted for as a discontinued operation in 1995.
<TABLE>
<CAPTION>
Inventories consist of the following (in thousands):
June 30, December 31, June 30,
1996 1995 1995
<S> <C> <C> <C>
Bananas and other fresh
produce $ 34,670 $ 39,920 $ 36,056
Other food products 35,774 64,528 47,422
Growing crops 120,086 120,178 115,730
Materials and supplies 50,415 56,925 73,334
Other 10,335 11,828 14,816
$ 251,280 $293,379 $287,358
</TABLE>
In June 1996, Chiquita called for redemption at par and
defeased its $66 million outstanding 10 1/2% Subordinated
Debentures. This debt prepayment resulted in an extraordinary
charge of $5.6 million consisting primarily of a non-cash write-
off of unamortized discount. During the second quarter 1995, the
Company replaced $153 million of ship loans with loans having
longer maturities totaling $187 million, resulting in an
extraordinary loss of $4.7 million.
In accordance with its long-standing policy to periodically
hedge transactions denominated in foreign currencies, at June 30,
1996, the Company had option contracts which ensure conversion of
approximately $200 million of foreign sales through 1996 and
approximately $100 million of foreign sales in the first half of
1997 at rates not higher than 1.49 Deutsche marks per dollar or
lower than 1.40 Deutsche marks per dollar. The carrying value of
these option contracts, and their fair value based on quoted
market prices, were not significant at June 30, 1996.<PAGE>
In July and August 1996, the Company sold 2,300,000 shares of
$3.75 Convertible Preferred Stock and $150 million principal
amount of 10 1/4% Senior Notes due 2006 for net proceeds of
approximately $255 million. In July 1996, using proceeds from
the offerings, the Company called for redemption and defeased its
$220 million outstanding 11 1/2% Subordinated Notes at a
redemption premium of 5.7% of the principal amount.<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
MANAGEMENT'S ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales for the quarter and first half ended June 30, 1996
decreased 1.9% and 4.5% from the same periods last year primarily
as a result of the sale of Numar Costa Rica.
Operating income for the quarter was $75 million in 1996
compared to $70 million in 1995. The elimination of earnings
from the divested Numar operation was more than offset by an
improvement in banana operating results, which benefited from
higher prices and further improvements in delivered product
costs.
First half operating income in 1996 was $133 million after $12
million of first quarter write-downs and costs resulting from
damage to the Company's banana producing assets caused by
industry-wide flooding in Costa Rica. Operating income for the
first half of 1995 was $146 million. 1996 first half banana
operating results, excluding the flood related charges, improved
sufficiently to offset the elimination of Numar earnings.
Improvements in delivered product cost and second quarter banana
prices more than offset the effect of lower European Union banana
prices early in the year which resulted primarily from the
overissuance of special import licenses to European-based banana
companies in late 1995.
Net interest expense for the second quarter and first half of
1996 decreased by $6 million and $13 million from the prior year
levels as a result of sales of non-core assets in 1995 as well as
the Company's refinancing and deleveraging program.
The Company's effective tax rate is affected by the level and
mix of income between various domestic and foreign jurisdictions
in which the Company operates.
FINANCIAL CONDITION
Cash flow from operations increased to $135 million in the
first half of 1996 from $111 million in the prior year period and
was used primarily for repayments of debt. As a result of sales
of non-core assets and debt repayments, net debt (total debt less
cash and securities) has decreased by $251 million since June 30,
1995 to $1.0 billion at June 30, 1996. After giving effect to
the Company's securities offerings and prepayment of its $220
million outstanding 11 1/2% Subordinated Notes completed
subsequent to June 30, 1996 (see "Notes to Consolidated Financial
Statements"), net debt at June 30, 1996 adjusted on this pro
forma basis decreased to $915 million.<PAGE>
OTHER
Reference is made to Part I, Item 1 - "Business-Risks of
International Operations" in the Company's 1995 Form 10-K and
"Management's Analysis of Operations and Financial Condition" in
the Company's 1995 Annual Report to Shareholders and the
discussion of the European Union ("EU") banana quota and
licensing regime and the Framework Agreement and the pending
international challenges to this EU regime. In July 1996, the EU
adopted an interim measure that increased its annual banana quota
for 1996 to adjust for the entry of Sweden, Finland and Austria
into the EU but made its preferential licensing system applicable
to the increase. Prior to their entry into the EU, these
countries had unregulated banana markets in which the Company
supplied a significant portion of the bananas. Implementation of
the quota and licensing regime continues to evolve and there can
be no assurance that the EU banana regulations will not change
further.
In connection with the international trade action pending in
the World Trade Organization ("WTO") filed by the United States,
Ecuador, Guatemala, Honduras and Mexico challenging the EU banana
quota and licensing regime and the Framework Agreement, the WTO
panel that will hear the case has been selected and a timetable
established which calls on the panel to issue its ruling by
January 28, 1997. Following any ruling by the WTO panel, certain
appeal procedures are available that could extend by a few months
the time before the ruling is final. Thereafter, the parties
have a "reasonable" period of time to implement the ruling.
There can be no assurance as to the results of the WTO
proceeding.
Part II - Other Information
Item 1 - Legal Proceedings
In 1993, Great White Fleet Ltd., the Company's shipping
subsidiary ("GWF"), redelivered three cargo ships to RSG
Reefer Services GmbH ("RSG"), in reliance on the force majeure
provisions of the applicable contract of affreightment with
RSG, due to the imposition of the European Union banana quota
and licensing regime. In 1994, RSG commenced an arbitration
proceeding in London, England disputing the occurrence of a
force majeure event and seeking damages from GWF. A hearing
on the merits was held in May and June 1996 during which RSG
claimed it suffered damages in the range of $16 to $20
million. The parties are awaiting the arbitrators' decision.
Although the outcome of this proceeding cannot be predicted,
the Company's management believes, based on advice of counsel,
that GWF was contractually entitled to redeliver the ships and
that RSG's damage claim is exaggerated.<PAGE>
Reference is made to Part I, Item 3 - "Legal Proceedings"
in the Company's 1995 Form 10-K and the discussion of the
cases pending in various courts alleging injuries as a result
of exposure to DBCP, an agricultural chemical. Five new
lawsuits, each involving one plaintiff, were filed in May 1996
in Mississippi state court against the manufacturer and banana
producer defendants that are defendants in the other cases.
Each case was removed to the United States District Court for
the Southern District of Mississippi, Southern Division, where
the defendants' motions to dismiss on grounds of lack of
personal jurisdiction and plaintiffs' motions to remand the
cases to state court are pending. The Company continues to
vigorously defend itself in these cases. The Company believes
it has a number of meritorious defenses in these cases,
including that at all times during which it used DBCP
commercially, the product was registered for use by the United
States Environmental Protection Agency. In addition, the
Company ceased using the product on a commercial basis in
1977, promptly after learning that health hazards might exist.
Item 2 - Changes in Securities
In July and August 1996, the Company issued 2,300,000
shares of $3.75 Non-Voting Cumulative Preferred Stock, Series
B ("Series B Shares"). The Series B Shares are non-voting;
have a liquidation preference of $50.00 per share; are
entitled to receive preferred annual dividends of $3.75 per
share; after October 7, 1996, are convertible into 3.3333
shares of the Company's Capital Stock, par value $.33 per
share ("Common Stock"), at the option of the holder; and,
after September 9, 1999, are convertible into Common Stock at
specified conversion rates at the option of the Company. The
Series B Shares are not redeemable and there is no redemption
or sinking fund obligation with respect to the Series B
Shares.
As to dividends and upon liquidation, the Series B Shares
rank prior to the Common Stock and pari passu with the
Company's shares of $2.875 Non-Voting Cumulative Preferred
Stock, Series A ("Series A Shares"). In addition, if the
Company fails to pay six or more quarterly dividends on Series
B Shares, holders of Series B Shares, voting as a separate
class together with holders of Series A Shares, will have the
right to elect two additional directors to continue in office
until the dividend arrearages are eliminated.
On July 26, 1996, the Company also issued $150 million of
10 1/4% Senior Notes due 2006 ("Senior Notes"). The Senior
Notes are general unsecured obligations of the Company and
rank pari passu with the Company's existing and future senior
unsecured indebtedness, and senior to the Company's existing
and future subordinated indebtedness. The terms of the Senior
Notes contain restrictions on the payment of dividends and
other distributions on, and repurchases and redemptions of,<PAGE>
the Company's capital stock similar to those of other debt
agreements of the Company. At June 30, 1996, approximately
$220 million was available for these payments under the most
restrictive of these agreements.
Item 4 - Submission of Matters to a Vote of Security Holders
In connection with the election of seven directors of the
Company, proxies were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934 and the following
votes were cast at the Company's Annual Meeting of
Shareholders held on May 8, 1996:
Name Votes For Votes Withheld
Carl H. Lindner 43,241,192 199,218
Keith E. Lindner 43,295,240 145,170
Fred J. Runk 43,298,749 141,661
Jean Head Sisco 43,304,009 136,401
William W. Verity 43,230,296 210,114
Oliver W. Waddell 43,290,578 149,832
Ronald F. Walker 43,303,492 136,918
Proxies representing 11,735,026 shares were not voted.<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
Page
Number(s)
(a) Exhibit 3(a)- Certificate of Amendment to the Company's
Second Restated Certificate of Incorporation establishing
the terms of the Series B Preferred Stock . . . . . . . . . . **
Exhibit 4 - Indenture dated as of February 15, 1994
between the Company and The Fifth Third Bank, Trustee, with
respect to Senior Debt Securities, under which the Company's
9 1/8% Senior Notes due 2004 and the Company's 10 1/4% Senior
Notes due 2006 have been issued (incorporated by reference to
Exhibit 4(c) of Registration Statement 333-00789), as
supplemented by the First Supplemental Indenture dated as of
June 15, 1994 (incorporated by reference to Exhibit 6(a)99(c)
of the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994) and by the Second Supplemental Indenture
dated as of July 15, 1996 (attached hereto); and as further
supplemented by the Certificate of the Vice President and
Controller of the Company establishing the terms of the 9 1/8%
Senior Notes (incorporated by reference to Exhibit 7(c)(3) of
the Company's Current Report on Form 8-K dated February 8, 1994)
and by the Terms of 10 1/4% Senior Notes approved by the
Executive Committee of the Board of Directors of the Company
(incorporated by reference to Exhibit 7(c)99.6 of the Company's
Current Report on Form 8-K dated July 22, 1996) . . . . . . . **
Exhibit 11 - Computation of Earnings Per Common Share . . . . 12-13
Exhibit 27 - Financial Data Schedule . . . . . . . . . . . . **
**Copy omitted from this Quarterly Report on Form 10-Q. Copy included
in report filed electronically with the Securities and Exchange
Commission.
(b) The following report on Form 8-K was filed by the Company during the
quarter ended June 30, 1996:
April 30, 1996 - to report the Company's announcement of results of
operations for the quarter ended March 31, 1996.
In addition, a report on Form 8-K dated July 22, 1996 was filed by
the Company to report the terms of the offerings of the Series B
Shares and the 10 1/4% Senior Notes.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/ William A. Tsacalis
William A. Tsacalis
Vice President and Controller
(Chief Accounting Officer)
August 9, 1996<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
A. Primary earnings per common share
Income from continuing operations $ 43,089 $ 32,095 $ 67,317 $ 65,694
Dividends on Series A Preferred Stock (2,066) (2,066) (4,133) (4,133)
---------- ---------- ---------- ----------
Income from continuing operations
attributable to common shares 41,023 30,029 63,184 61,561
Discontinued operations -- 2,035 -- 6,064
---------- ---------- ---------- ----------
Income attributable to common shares
before extraordinary item 41,023 32,064 63,184 67,625
Extraordinary loss from debt refinancing (5,556) (4,713) (5,556) (4,713)
---------- ---------- ---------- ----------
Net income attributable to common shares $ 35,467 $ 27,351 $ 57,628 $ 62,912
========== ========== ========== ==========
Shares used in calculation of per share data:
Weighted average common and equivalent
Series C preference shares outstanding 55,408 53,512 55,249 53,279
Less restricted common shares (278) (419) (294) (405)
Dilutive effect of assumed exercise of
stock options and warrants 854 814 997 820
---------- ---------- ---------- ----------
55,984 53,907 55,952 53,694
========== ========== ========== ==========
Primary earnings per common share:
Continuing operations $ .73 $ .55 $ 1.13 $ 1.15
Discontinued operations -- .04 -- .11
Extraordinary item (.10) (.08) (.10) (.09)
---------- ---------- ---------- ----------
Net income $ .63 $ .51 $ 1.03 $ 1.17
========== ========== ========== ==========
/TABLE
<PAGE>
Exhibit 11 (continued)
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
B. Fully diluted earnings per common share
Income from continuing operations $ 43,089 $ 32,095 $ 67,317 $ 65,694
Discontinued operations -- 2,035 -- 6,064
-------- -------- -------- --------
Income before extraordinary item 43,089 34,130 67,317 71,758
Extraordinary loss from debt refinancing (5,556) (4,713) (5,556) (4,713)
--------- -------- -------- --------
Net income $ 37,533 $ 29,417 $ 61,761 $ 67,045
========= ======== ======== ========
Shares used in calculation of per share data:
Weighted average common and equivalent
Series C preference shares outstanding 55,408 53,512 55,249 53,279
Less restricted common shares (278) (399) (284) (384)
Dilutive effect of assumed conversion of
Series A Preferred Stock 7,566 7,566 7,566 7,566
Dilutive effect of assumed exercise of
options and warrants 854 1,036 1,158 938
-------- -------- -------- --------
63,550 61,715 63,689 61,399
======== ======== ======== ========
Fully diluted earnings per common share:
Continuing operations $ .68 $ .52 $ 1.06 $ 1.07
Discontinued operations -- .03 -- .10
Extraordinary item (.09) (.07) (.09) (.08)
-------- -------- -------- --------
Net income $ .59 $ .48 $ .97 $ 1.09
======== ======== ======== ========
/TABLE
<PAGE>
EXHIBIT 3(a)
As filed July 24, 1996 with Lorna R. Hooks,
Secretary of State of the State of New Jersey
CERTIFICATE OF AMENDMENT
TO THE
SECOND 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) and 14A:9-1, the
undersigned corporation, Chiquita Brands International, Inc. (the
"Corporation"), executes the following Certificate of Amendment
to its Second Restated Certificate of Incorporation (the
"Certificate of Incorporation").
1. The name of the corporation is Chiquita Brands
International, Inc.
2. The following resolution, deleting the designation of a
class of securities, was duly adopted by the Board of
Directors of the Corporation by unanimous written consent as
of the 15th day of July, 1996, pursuant to the authority
vested in the Board of Directors by the Certificate of
Incorporation:
WHEREAS, none of the Corporation's Mandatorily
Exchangeable Cumulative Preference Stock, Series
C (the "Series C Stock"), is currently
outstanding and none may be issued in the future
because all of such shares have converted in
accordance with the terms of the Series C Stock
to Capital Stock, par value $0.33 per share
("Common Stock"); therefore, the Board of
Directors desires to delete the classification
and terms of the Series C Stock from the
Corporation's Second Restated Certificate of
Incorporation.
RESOLVED, that the Corporation's Second Restated
Certificate of Incorporation is hereby amended to
delete the designation of the class of securities
titled Mandatorily Exchangeable Cumulative
Preference Stock, Series C, and eliminate
Subsection E. of Section IV of the Second<PAGE>
Restated Certificate of Incorporation titled "Special
Provisions Applicable to the Series C Preference Stock"
and the proper officers of the Corporation are authorized
to execute and file, as necessary, any documents or
certificates with the Secretary of State of New Jersey to
effect such amendment.
3. The following resolutions, establishing and designating a
new 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 22nd day of July, 1996, 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 by
resolution of the Board of Directors authorizing
the Executive Committee to exercise the authority
of the Board of Directors, and pursuant to the
Corporation's Second Restated Certificate of
Incorporation, the Executive Committee hereby
classifies Two Million, Three Hundred Thousand
(2,300,000) shares of the Corporation's Non-
Voting Cumulative Preferred Stock, par value
$1.00 per share, as a new series designated
"$3.75 Convertible Preferred Stock, Series B"
(the "Series B Preferred Stock").
RESOLVED, that the terms and conditions of the
Series B Preferred Stock, including its rights,
preferences, privileges, voting powers,
restrictions, qualifications, limitations, and
other terms and conditions shall be as set forth
in Exhibit 1 attached hereto.
RESOLVED, that the Corporation's Second Restated
Certificate of Incorporation is hereby amended as
follows:
(a) Section IV of such certificate is
amended to add a new Subsection E titled
"Special Provisions Applicable to Series
B Preferred Stock," in the form attached
hereto as Exhibit 1; and
(b) paragraph (g) of Subsection D
titled "Special Provisions Applicable to
Series A Preferred Stock" of Section IV
of the Second Restated Certificate of
Incorporation is amended to read in its
entirety as follows:<PAGE>
"(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 $3.75 Convertible
Preferred Stock, Series B, in respect of the
preference as to dividends and to payments upon
the Liquidation of the Corporation."
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 amendments.
4. The resolution set forth in numbered paragraph 2 was duly
adopted by the Board of Directors of the Corporation by
unanimous written consent as of the 15th day of July, 1996,
and the resolutions set forth in numbered paragraph 3 were
adopted by unanimous written consent of the Executive
Committee of the Board of Directors as of July 22, 1996.
5. 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 1 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
24th day of July, 1996.
CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/William A. Tsacalis
William A. Tsacalis
Vice President and Controller<PAGE>
EXHIBIT 1
SUBSECTION E. SPECIAL PROVISIONS APPLICABLE TO SERIES B
PREFERRED STOCK
There is hereby established a series of the Corporation's Non-
Voting Cumulative Preferred Stock, $1.00 par value, which shall
be designated "$3.75 Convertible Preferred Stock, Series B"
("Series B Preferred Stock") and shall consist of Two Million,
Three Hundred Thousand (2,300,000) shares, and no more. The
relative, participating, optional and other special rights and
the qualifications, limitations and restrictions of the Series B
Preferred Stock shall be as follows:
(a) Dividends.
(i) The holders of outstanding shares of the Series B
Preferred Stock shall be entitled to receive (subject to the
rights of holders of shares of $2.875 Non-Voting Cumulative
Preferred Stock, Series A, or any series of Non-Voting Cumulative
Preferred Stock or Series Preference Stock and/or any other class
or series of preferred or preference stock which the Corporation
may in the future issue which ranks senior to or on a parity with
the Series B 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 $0.9375 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 September 7, 1996; provided, however, that the
Preferential Dividend payable on September 7, 1996 (the "Initial
Preferential Dividend") with respect to any share of Series B
Preferred Stock outstanding on the record date for the Initial
Preferential Dividend shall be computed in accordance with
Subsection E(a)(iv). If September 7, 1996 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 B Preferred Stock shall accrue from the date of issuance
of the Series B 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. All payments of Preferential Dividends to holders
of Series B Preferred Stock shall be rounded up to the nearest
whole cent.<PAGE>
(ii) So long as any shares of Series B 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 any other stock of the
Corporation ranking junior to the Series B 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 the Series B 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 the
Series B 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 the Series B 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 B
Preferred Stock), or convert in part, but not in whole, into
shares of Capital Stock at the option of the Corporation
pursuant to Subsection E(c)(ii) outstanding shares of Series B
Preferred Stock, unless, in each case, the full Preferential
Dividends, if any, accumulated on all outstanding shares of
the Series B 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 B Preferred Stock, all
dividends and other distributions declared upon the Series B
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 B Preferred Stock
shall be declared pro rata so that the amount of dividends and
other distributions declared and paid per share on the Series
B 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 B Preferred Stock
and such other shares bear to each other. Holders of the
shares of Series B 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.<PAGE>
(iii) Any dividend payment made on shares of Series B
Preferred Stock shall first be credited against the earliest
accumulated unpaid dividend due with respect to shares of Series
B 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 four 90-day quarters or
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
B 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 or preference stock which the
Corporation may issue in the future which ranks prior to the
Series B 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 B 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 B Preferred Stock and any other shares of the
Corporation ranking as to any such distribution on a parity with
the Series B Preferred Stock are not paid in full, the holders of
shares of Series B 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 B 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 E(b).
(c) Conversions.<PAGE>
(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
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 B Preferred Stock
remains outstanding and holders of Series B 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 B Preferred
Stock (at the option of the Corporation pursuant to clause (ii)
of this Subsection E(c) or at the option of the holder pursuant
to clause (iii) of this Subsection E(c), whichever is greater)
immediately prior to the effectiveness of the Merger or
Consolidation, each outstanding share of Series B 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 B Preferred Stock (at the option of the
Corporation pursuant to clause (ii) of this Subsection E(c) or at
the option of the holder pursuant to clause (iii) of this
Subsection E(c), whichever is greater), plus the right to receive
an amount of cash equal to the accumulated unpaid dividends on
such share of Series B Preferred Stock to and including the
immediately preceding Preferential Dividend Payment Date.
(ii) Conversion at the Option of the Corporation. At any
time and from time to time on and after September 10, 1999, and
upon notice given as provided herein, the Corporation may
convert, in whole or in part, the outstanding shares of Series B
Preferred Stock; provided, however, that prior to September 10,
2003, the Corporation may exercise its right to convert only if
the "Current Market Price" (as defined in Subsection E(c)(viii))
of the Capital Stock on the "Notice Date" (as defined in
Subsection E(c)(viii)) with respect to such conversion shall not
be less than $7.00 per share, subject to adjustment as provided
below (the "Strike Price"). On the date fixed for conversion,
each outstanding share of Series B Preferred Stock to be
converted pursuant to this Subsection E(c)(ii) shall convert
into:
(A) the lesser of (x) that number of shares of Capital
Stock as shall equal the applicable amount set forth in the
table below divided by the Current Market Price (as defined
in Subsection E(c)(viii)) per share of Capital Stock on the
date of conversion:<PAGE>
<TABLE>
<CAPTION>
If converted during Current Market Value
the 12-month period of Common Stock
beginning September 10: to be issued
<S> <C>
1999 $51.50
2000 $50.75
2001 and thereafter $50.00
</TABLE>
or (y) 10 shares of Capital Stock, subject to adjustment as
provided below ("the Maximum Conversion Rate"); plus
(B) the right to receive an amount of cash equal to the
accumulated unpaid dividends on such share of Series B
Preferred Stock to and including the immediately preceding
Preferential Dividend Payment Date; plus
(C) 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 E(a)(iv); provided, however, that no amount
shall be due and payable pursuant to this clause (C) 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 and the Strike Price shall each be
proportionately adjusted when, as and if the Conversion Rate
shall be adjusted pursuant to Subsection E(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 B Preferred
Stock, each holder of Series B Preferred Stock shall have the
right to convert, in whole or in part, the outstanding shares of
Series B Preferred Stock; provided, however, that if the shares
of Series B 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 B 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 date upon which the certificates
representing shares of Series B Preferred Stock are surrendered
for conversion, plus the right to receive an amount of cash equal
to the accumulated unpaid dividends on such share of Series B
Preferred Stock to be converted to and including the immediately
preceding Preferential Dividend Payment Date. In order to
convert shares of Series B Preferred Stock into Capital Stock the
holder thereof shall surrender, at the<PAGE>
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 B 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 B 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
E(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 B Preferred Stock
into shares of Capital Stock pursuant to Subsection E(c)(iii)
shall be initially 3.3333 shares of Capital Stock for each share
of Series B Preferred Stock; provided, however, that such
Conversion Rate shall be subject to adjustment from time to time
as provided below in this Subsection E(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 B Preferred Stock and in which such
holders shall receive, with respect to each share of
Series B Preferred Stock, the same number of shares of
Capital Stock as shall be distributed with<PAGE>
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 E(c)(ii) or at the option of the holder
pursuant to Subsection E(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 issue rights or warrants to
all holders of its outstanding shares of Capital Stock
entitling them to subscribe for or purchase shares of
Capital Stock at a price per share less than the Current
Market Price on the record date fixed for determination
of stockholders entitled to receive such rights or
warrants (in each case other than instances when such
rights or warrants are also issued to holders of shares
of Series B Preferred Stock in which such holders shall
receive, with respect to each share of Series B Preferred
Stock, the same rights or warrants as shall be issued
with respect to the maximum number of shares of Capital
Stock into which each share of Preferred Stock shall then
be convertible at the option of the Corporation pursuant
to Subsection E(c)(ii) or at the option of the holder
pursuant to Subsection E(c)(iii), whichever is greater),
then the Conversion Rate shall be adjusted by multiplying
the Conversion Rate in effect at the opening of business
on the date after such record date by a fraction, of
which the numerator shall be the number of shares of
Capital Stock outstanding at the close of business on
such record date plus the total number of additional
shares<PAGE>
of Capital Stock issuable upon exercise of such rights or
warrants, and of which the denominator shall be the
number of shares of Capital Stock outstanding on the
close of business on such record date plus the number of
shares that the aggregate exercise price of the total
number of rights or warrants so issued would purchase at
such Current Market Price. Such adjustment shall become
effective immediately after the opening of business on
the day following the record date fixed for determination
of stockholders entitled to receive such rights or
warrants. To the extent that shares of Capital Stock are
not delivered after the expiration or termination of such
rights or warrants, the Conversion Rate shall be
readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of
only the number of shares of Capital Stock actually
delivered. In the event that such rights or warrants are
not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in
effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights
or warrants entitle the holders to subscribe for or
purchase shares of Capital Stock at less than such
Current Market Price, and in determining the aggregate
exercise price of such rights or warrants, there shall
be taken into account any consideration received for such
rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of
Directors.
(C) If the Corporation shall pay a dividend or
make a distribution to all holders of its Capital Stock
of evidences of its indebtedness or other assets
(including securities of the Corporation but excluding
dividends or other distributions paid exclusively in
cash, and excluding any portion of distributions and
dividends to the extent referred to in clauses (A) or (B)
above), (in each case other than a dividend or
distribution which is also paid or made to holders of
Series B Preferred Stock in which such holders shall
receive, with respect to each share of Series B Preferred
Stock, the same evidences of indebtedness or other assets
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 the
option of the Corporation pursuant to Subsection E(c)(ii)
or at the option of the holder pursuant to Subsection
E(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<PAGE>
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 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.
(D) If the Corporation shall pay a dividend or make
a distribution consisting exclusively of cash (excluding
any cash portion of distributions referred to in
Subsection E(c)(iv)(C)) (collectively, "All-Cash
Distributions") to all holders of Capital Stock, then,
to the extent such All-Cash Distribution, combined with
(A) all other All-Cash Distributions made within the
preceding 12 months in respect of which no adjustment has
been made, plus (B) any cash and the fair market value of
other consideration payable in respect of any Corporation
Tender Offer (as defined in Subsection E(c)(viii))
concluded within the preceding 12 months in respect of
which no adjustment has been made, exceed ten percent
(10%) of the product of (x) the Current Market Price of
the Capital Stock, times (y) the number of issued and
outstanding shares of Capital Stock (assuming the
conversion into Capital Stock of each outstanding
security or debt instrument which is by its terms
convertible into Capital Stock at the option of the
holder, without the payment of additional consideration
therefor, regardless of whether or not such security or
debt instrument shall be so convertible on such date),
each as measured on the record date for such All-Cash
Distribution (such excess being herein called the "Excess
Distribution"), then the Conversion Rate shall be
adjusted by multiplying the Conversion Rate in effect
immediately prior to the date of such All-Cash
Distribution by a fraction, of which the numerator shall
be the Current Market Price of the Capital Stock, and of
which the denominator shall be the Current Market Price
of the Capital Stock less the quotient of the Excess
Distribution divided by the number of issued and
outstanding shares of Capital Stock (measured as
described in clause "(y)" above), each as measured on the
record date. 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<PAGE>
All-Cash Distribution (provided, however, that no such
adjustment shall be made in respect of any All-Cash
Distribution described in this Subsection which was also
paid or made to holders of shares of Series B Preferred
Stock in which such holders shall receive, with respect
to each share of Series B Preferred Stock, the same All-
Cash Distribution as shall be paid or made with respect
to the maximum number of shares of Capital Stock into
which each share of Series B Preferred Stock shall be
convertible at the option of the Corporation pursuant to
Subsection E(c)(ii) or at the option of the holder
pursuant to Subsection E(c)(iii), whichever is greater).
(E) If the Corporation shall make payment of any
cash or other consideration payable in respect of any
Corporation Tender Offer, then, to the extent such
Corporation Tender Offer involves payment of an aggregate
consideration that combined with (A) all All-Cash
Distributions made within the preceding 12 months in
respect of which no adjustment has been made, plus (B)
any cash and the fair market value of other consideration
payable in respect of any Corporation Tender Offer
concluded within the preceding 12 months in respect of
which no adjustment has been made, exceeds ten percent
(10%) of the product of (x) the Current Market Price of
the Capital Stock, times (y) the number of issued and
outstanding shares of Capital Stock (assuming the
conversion into Capital Stock of each outstanding
security or debt instrument which is by its terms
convertible into Capital Stock at the option of the
holder, without the payment of additional consideration
therefor, regardless of whether or not such security or
debt instrument shall be so convertible on such date),
each as measured on the expiration date of such
Corporation Tender Offer (such excess being herein called
the "Excess Consideration"), then the Conversion Rate
shall be adjusted by multiplying the Conversion Rate in
effect immediately prior to the expiration date of such
Corporation Tender Offer by a fraction, of which the
numerator shall be the Current Market Price of the
Capital Stock, and of which the denominator shall be the
Current Market Price of the Capital Stock less the
quotient of the Excess Consideration divided by the
number of issued and outstanding shares of Capital Stock
(measured as described in clause "(y)" above), each as
measured on such expiration date (provided, however, that
no such adjustment shall be made in respect of any
Corporation Tender Offer described in this Subsection
which was also made to holders of shares of Series B
Preferred Stock in which such holders shall receive, with
respect to each share of Series B Preferred Stock, the
same payment in respect of a Corporation Tender Offer
with<PAGE>
respect to the maximum number of shares of Capital Stock
into which each share of Series B Preferred Stock shall
then be convertible at the option of the Corporation
pursuant to Subsection E(c)(ii) or at the option of the
holder pursuant to Subsection E(c)(iii), whichever is
greater).
(F) From time to time, to the extent permitted by
law, the Corporation may make temporary upward
adjustments to the Conversion Rate by any amount for any
period of at least 20 days, in which case the Corporation
shall give not less than 15 nor more than 60 days' notice
of such adjustment, if the Board of Directors has made a
determination that such adjustment would be in the best
interests of the Corporation, which determination shall
be conclusive.
(G) Anything in this Subsection E(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
E(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 section 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 B
Preferred Stock, on the other hand, as such rights are
set forth in this Certificate of Incorporation.
(H) In any case in which this Subsection E(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 E(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:<PAGE>
(1) issuing to the holder of any shares of the
Series B Preferred Stock surrendered for conversion
the 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 E(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 E(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, the Maximum Conversion Rate and, if
applicable, the Strike Price, and 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 B Preferred Stock
and the Capital Stock; and
(B) mail a notice stating that the Conversion Rate,
the Maximum Conversion Rate and, if applicable, the
Strike Price have been adjusted, the facts requiring
such adjustment and upon which such adjustment is based
and setting forth the adjusted Conversion Rate. the
Maximum Conversion Rate and, if applicable, the Strike
Price to the holders of record of the outstanding shares
of the Series B Preferred Stock at or prior to the time
the Corporation mails a financial statement to its
shareholders covering the quarterly fiscal period during
which the facts requiring such adjustment occurred, but
in any event within 120 days after a fourth
quarter/fiscal year-end period or 60 days after the end
of any other quarterly fiscal period.
In addition to the foregoing, the Corporation will
calculate and provide notice to the transfer agent or agents for
the Series B Preferred Stock and the Capital Stock within 30 days
after (1) the date of initial issuance of the shares of Series B
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 B
Preferred Stock; provided that<PAGE>
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
B 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 B 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 B
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 E:
(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 "Corporation Tender Offer" shall mean a
tender offer (as such term has been defined by the
applicable rules, regulations and interpretations of the
Securities and Exchange Commission and by courts
interpreting the relevant provisions of the Securities
Exchange Act of 1934, as amended) by the Corporation and/or
any of its subsidiaries for Capital Stock.
(C) The term "Current Market Price" per share of
Capital Stock on any date shall mean the average of the
daily Market Prices for the fifteen consecutive Trading
Dates ending on the second Trading Date immediately
preceding such date (appropriately adjusted to take into
account the occurrence during such fifteen-day period, or
following such fifteen-day period and prior to such date, of
any event that results in an adjustment of the Conversion
Rate).
(D) The term "Market Price" for any day shall mean (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,<PAGE>
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 the 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 New York Stock
Exchange, Inc. (or any successor to such exchange) selected
by the Corporation.
(E) 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 B Preferred Stock, the
date of mailing of such notice to the holders of Series B
Preferred Stock.
(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<PAGE>
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 B Preferred Stock to holders of record of the Series B
Preferred Stock to be converted by mailing a notice of conversion
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 B 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 B 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 B 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 E(c)
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 Manhattan in
New York City, or which has an affiliate or<PAGE>
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 E(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 E(c)(ii)(C), if
applicable, on the shares to be converted as required by this
Subsection E(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 B 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 B 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 B 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 of Series B
Preferred Stock 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 B 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 of Series B Preferred Stock subject to
conversion shall cease to accrue after the date fixed for
conversion and all rights with respect to such 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 of Series B Preferred Stock so to be
converted as provided above, then the holder or holders of such
shares of Series B 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<PAGE>
repaid and released to the Corporation. No holder of a
certificate of shares of Series B Preferred Stock shall be, or
have any rights as, a holder of the shares of Capital Stock
issuable in connection with the conversion thereof, including,
without limitation, voting rights or the right to receive any
dividend from the Corporation with respect to such shares of
Capital Stock, until surrender of such certificate 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 in respect of the number of whole shares of Capital Stock
issuable upon such surrender on or after the conversion date, but
which was not paid by reason of any earlier failure to surrender
certificates that represented shares of Series B Preferred Stock.
If fewer than all the outstanding shares of Series B 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 B Preferred Stock by lot, 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 B Preferred Stock.
(x) Corporation's Option to Pay Accumulated Unpaid
Dividends in Common Stock Upon Conversion on or after September
10, 1999. Notwithstanding anything to the contrary contained
herein, if the effective date of any conversion is on or after
September 10, 1999 and if on such date there are accumulated
unpaid dividends with respect to the Series B Preferred Stock to
be so 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 E(c)(ii)(C), 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 shares of Series B Preferred Stock, whether such
payment is made in cash or, pursuant to Subsection E(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 B 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 E(d). In addition to any
voting rights to which the holders of shares of Series B
Preferred Stock shall be entitled pursuant to applicable law,
whenever, at any time, Preferential Dividends payable on the<PAGE>
Series B Preferred Stock shall be in arrears with respect to six
(6) or more Preferential Dividend Payment Dates, whether or not
consecutive, the holders of shares of Series B 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 B
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 E(d). Upon the vesting of such voting right in the
holders of shares of Series B 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 B 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 and upon which like voting rights have been
conferred and are exercisable) as set forth herein. The right of
the holders of shares of Series B 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 B 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 B 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 B 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 B 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 B
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<PAGE>
respect of which such vacancy occurred. Whenever the special
voting powers vested in the holders of shares of Series B
Preferred Stock and 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 provided in
this Subsection E(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 E(d)(ii).
(iii) While any Series B 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 E(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 B
Preferred Stock (hereinafter in this Subsection (E)(d)(iii)
referred to as "Senior Stock"); provided, however, that no such
approval of holders of Series B 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 B Preferred
Stock.
(iv) With respect to any matter upon which
holders of shares of Series B Preferred Stock shall be entitled
to vote pursuant to this Subsection E(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 the shares of
Series B Preferred Stock held by such holder shall then be
convertible at the option of the Corporation pursuant to
Subsection E(c)(ii) or at the option of the holder pursuant to
Subsection (E)(c)(iii), whichever is greater, on the record date
for determining the shareholders of the Corporation entitled to
vote.<PAGE>
(e) Increase in Shares.
The number of shares of Series B 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 B Preferred Stock
shall hold such Series B Preferred Stock subject to the right of
the Corporation to effect a conversion in accordance with the
provisions of Subsection E(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 B Preferred Stock, only those shares
of Capital Stock and cash, if applicable, delivered as provided
in accordance with Subsection E(c) hereof.
(g) Equal Rank.
All shares of Series B Preferred Stock shall be
identical in all respects, and all shares of Series B Preferred
Stock shall be of equal rank with shares of $2.875 Non-Voting
Cumulative Preferred Stock, Series A, in respect of the
preference as to dividends and to payments upon the Liquidation
of the Corporation.<PAGE>
EXHIBIT 4
CHIQUITA BRANDS INTERNATIONAL, INC.
and
THE FIFTH THIRD BANK, Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of July 15, 1996
To
INDENTURE
Dated as of February 15, 1994
Amending the Indenture, dated as of February 15, 1994, as
previously supplemented with respect to the 9 1/8% Senior Notes
due 2004 issued thereunder by a Board Resolution dated
February 8, 1994 and by the First Supplemental Indenture dated as of
June 15, 1994.<PAGE>
SECOND SUPPLEMENTAL INDENTURE (the "Second Supplemental
Indenture"), dated as of July 15, 1996, between CHIQUITA BRANDS
INTERNATIONAL, INC., a New Jersey corporation (the "Company"), and THE FIFTH
THIRD BANK, an Ohio banking corporation, as Trustee (the "Trustee").
RECITALS
The Company and the Trustee are parties to an Indenture,
dated as of February 15, 1994, relating to the issuance from time to
time by the Company of its Senior Debt Securities on terms to be
specified at the time of issuance. The Indenture has been previously
supplemented (as so supplemented, the "Indenture") by (a) a Board of
Resolution dated February 8, 1994, pursuant to which the Company issued its 9
1/8% Senior Notes due 2004 in the aggregate principal amount of $175,000,000
(the "9 1/8% Senior Notes") and (b) the First Supplemental Indenture dated
as of June 15, 1994 relating to the 9 1/8% Senior Notes. The 9 1/8%
Senior Notes are the sole series of Debt Securities outstanding under the
Indenture. Capitalized terms used herein, not otherwise defined herein, shall
have the meanings assigned to them in the Indenture.
The Company has duly authorized the execution and
delivery of this Second Supplemental Indenture in order to provide for
the issuance of Global Securities in connection with future series of Debt
Securities, which may be issued under the Indenture, but not the 9 1/8%
Senior Notes.
The Company has requested the Trustee and the Trustee
has agreed to join with it in the execution and delivery of this Second
Supplemental Indenture.
Section 901 (4) of the Indenture provides that the
Company, acting pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into an indenture supplemental to
the Indenture to add to, change or eliminate any of the provisions of the
Indenture; provided, however, that any such additions, changes or
eliminations shall become effective only when there is no Debt Security
Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision
and as to which such supplemental indenture would apply.
The Company has determined that this Second Supplemental
Indenture complies with Section 901(4) and does not require the consent of
any Holders of Debt Securities. On the basis of the foregoing, the Trustee
has determined that this Second Supplemental Indenture is in form satisfactory
to it.
The Company has furnished the Trustee with an Opinion
of Counsel complying with the requirements of Section 903 of the
Indenture, stating that the execution of this Second Supplemental
Indenture is authorized or permitted by the Indenture, and has delivered to
the Trustee a Board Resolution authorizing the execution and delivery
of this Second Supplemental Indenture, together with such other documents
as may have been required by Section 102 of the Indenture.
All things necessary to make this Second Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid
amendment of and supplement to the Indenture have been done.
NOW, THEREFORE, it is agreed that the Indenture is amended
for the equal and proportionate benefit of all Holders of Debt Securities is
sued under the Indenture after the date hereof:
ARTICLE 1
AMENDMENTS TO THE INDENTURE
Section 1.1. Section 101 of the Indenture is hereby
amended by amending and adding the following definitions:<PAGE>
The definition of "Debt Securities" is amended to read in
its entirety as follows:
"Debt Securities" means securities, including Global
Securities (unless the context indicates otherwise), evidencing unsecured
indebtedness of the Company authenticated and delivered under this Indenture.
The following definition is added after the definition of
"Exchange Act":
"Global Security" means a Debt Security in global form
established pursuant to Section 203.
The following definition is added after the definition of
"Trust Indenture Act":
"U.S. Depositary" means a clearing agency registered
under the Exchange Act, or any successor thereto, which shall in either
case be designated by the Company pursuant to Section 301, until a
successor U.S. Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "U.S. Depositary" shall mean or
include each Person who is then a U.S. Depositary hereunder, and if at
any time there is more than one such Person, "U.S. Depositary" as used
with respect to the Debt Securities of any series shall mean the U.S.
Depositary with respect to the Debt Securities of that series.
Section 1.2. Article Two of the Indenture is hereby
amended by adding Section 203 as follows:
Section 203. Debt Securities in Global Form.
If any Debt Security of a series is issuable in global
form, such Debt Security may provide that it shall represent the aggregate
amount of Outstanding Debt Securities from time to time endorsed thereon
and may also provide that the aggregate amount of Outstanding Debt
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Global Security to reflect the amount,
or any increase or decrease in the amount, of Outstanding Debt Securities
represented thereby shall be made by the Trustee and in such manner as shall
be specified in such Global Security. Any instructions by the Company with
respect to a Global Security, after its initial issuance, shall be in writing
but need not comply with Section 102. Global Securities may be issued in
either temporary or permanent form.
None of the Company, the Trustee, any Paying Agent or the
Debt Security Registrar will have any responsibility or liability for any
aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any recordsrelating to such beneficial ownership
interests.
Section 1.3. Section 301 of the Indenture is hereby
amended by deleting the word "and" from the end of Section 301(14), by
renumbering Section 301(15) as Section 301(16), and by inserting new
Section 301(15) as follows:
(15) whether the Debt Securities of the series shall be
issued in whole or in part in the form of one or more Global Securities
and, in such case, the U.S. Depositary for such Global Security or
Securities; whether such global form shall be permanent or temporary;
the manner in which and the circumstances under which Global Securities
representing Debt Securities of the series may be exchanged for Debt
Securities in definitive form, if other than, or in addition to, the manner
and circumstances specified in Section 305 hereof; the extent to which,
or the manner in which, any interest payable on any Global Security on
an Interest Payment Date will be paid, if other than in the manner
provided in Section 307; the manner in which the principal of, or premium,
if any, on, any Global Security will be paid, if other than as
set forth elsewhere herein; and
2<PAGE>
Section 1.4. Section 303 of the Indenture is hereby
amended by adding the following paragraph at the end thereof:
If the Company shall establish pursuant to Section 301 that
the Debt Securities of a series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall
execute and the Trustee shall, in accordance with Section 303 and the
Company Order with respect to such series, authenticate and deliver one or
more Global Securities in temporary or permanent form that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of the Outstanding Debt Securities of such series to be
represented by one or more Global Securities, (ii) shall be registered in
the name of the U.S. Depositary for such Global Security or Securities or
the nominee of such depositary, and (iii) shall bear a legend
substantially to the following effect: "This Debt Security may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary, unless
and until this Debt Security is exchanged in whole or in part for
Debt Securities in definitive form" and such other legend as may be
required by the U.S. Depositary.
Section 1.5. Section 305 of the Indenture is hereby
amended by adding the following paragraphs at the end thereof:
Notwithstanding any other provision of this Section,
unless and until it is exchanged in whole or in part for Debt Securities
in definitive form, a Global Security representing all or a portion of
the Debt Securities of a series may not be transferred except as a whole
by the U.S. Depositary for suchseries to a nominee of such U.S.
Depositary or by a nominee of such U.S. Depositary to such depositary or
another nominee of such U.S. Depositary or by such U.S. Depositary or any
other such nominee to a successor U.S. Depositary for such series or a
nominee of such successor U.S. Depositary.
If at any time the U.S. Depositary for the Debt Securities
of a series notifies the Company that it is unwilling or unable to continue
as U.S. Depositary for the Debt Securities of such series or if at any time
the U.S. Depositary for Debt Securities of such series shall no longer
be a clearing agency registered and in good standing under the Exchange Act
or other applicable statute or regulation, the Company shall appoint a
successor U.S. Depositary with respect to the Debt Securities of such series.
If a successor U.S. Depositary for the Debt Securities of such series is
not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Debt Securities of such series,
will authenticate and deliver, Debt Securities of such series in definitive
form in an aggregate principal amount equal to the principal amount of the
Global Security or Securities representing such series in exchange for such
Global Security or Securities.
The Company may at any time and in its sole discretion
determine that the Debt Securities of any series issued in the form of one
or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Debt Securities of such series, will authenticate and
deliver, Debt Securities of such series in definitive form and in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such series in exchange for such Global
Security or Securities.
If the Debt Securities of any series shall have been
issued in the form of one or more Global Securities and if an Event of
Default with respect to the Debt Securities of such series shall have
occurred and be continuing, the Company will promptly execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Debt Securities of such series, will authenticate and
deliver Debt Securities of such series in definitive form and in an aggregate
principal amount equal to the
3<PAGE>
principal amount of the Global Security or Securities representing such
series in exchange for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with
respect to the Debt Securities of a series, the U.S. Depositary for such
series of Debt Securities may surrender a Global Security for such
series of Debt Securities in exchange in whole or in part for Debt
Securities of such series of like tenor and terms and in definitive form
on such terms as are acceptable to the Company and such U.S. Depositary.
Thereupon, the Company shall execute and the Trustee shall authenticate and
deliver, without charge:
(i) to each Person specified by the U.S.
Depositary a new Debt Security or Securities of the same
series, of like tenor and terms and of any authorized
denomination as requested by such Person in an aggregate
principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and
(ii) to the U. S. Depositary a new Global
Security in a denomination equal to the difference, if
any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of the Debt
Securities delivered to Holders thereof.
Upon the exchange of a Global Security for Debt Securities
in definitive form, such Global Security shall be canceled by the
Trustee. Definitive Debt Securities issued in exchange for a Global
Security pursuant to this Section shall be registered in such names and in
such authorized denominations as the U.S. Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such definitive Debt Securities to the Persons in whose names
such Debt Securities are so registered.
ARTICLE 2
MISCELLANEOUS
Section 2.1. This Second Supplemental Indenture may
be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts together shall
constitute but one and the same instrument.
Section 2.2. All provisions of this Second Supplemental
Indenture shall be deemed to be incorporated in, and made part of, the
Indenture; and the Indenture, as supplemented by this Second
Supplemental Indenture, shall be read, taken and construed as one and the
same instrument.
Section 2.3. In case any provision in this Second
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
Section 2.4. Nothing in this Second Supplemental
Indenture, express or implied, shall give to any Person (other than the
parties hereto, any Debt Security Registrar, any Paying Agent, and
Authenticating Agent and their successors under the Indenture, and the
Holders of the Debt Securities), any benefit or any legal or equitable
right, remedy or claim under the Indenture.
Section 2.5. This Second Supplemental Indenture shall
be governed by and construed in accordance with the laws of the State of
New York.
4<PAGE>
IN WITNESS WHEREOF, the parties have caused this Second
Supplemental Indenture to be signed and acknowledged by their respective
officers thereunto duly authorized as of the day and year first above
written.
CHIQUITA BRANDS INTERNATIONAL, INC.
[Seal]
By: /s/Gerald R. Kondritzer
Title: Vice President and Treasurer
[Attest]
/s/Donna K. Leonard
Assistant General Counsel
and Assistant Secretary
[Seal] THE FIFTH THIRD BANK, Trustee
By:/s/Kerry R. Byrne
Title:Vice President
[Attest]
/s/Greg Hahn
5<PAGE>
STATE OF OHIO )
) S.S.:
COUNTY OF HAMILTON )
On the 24th day of July,1996, before me personally came Kerry R.
Byrne to me known, who being by me duly sworn, did depose and say that he
resides at 2341 East Hill Avenue, Cincinnati, Ohio 45208, that he is a Vice
President of THE FIFTH THIRD BANK, one of the corporations described in
and which executed the above instrument; that he knows the corporate seal
of said corporation; that one of the seals affixed to the said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed by
official seal the day and year in this certificate first above written.
/s/Traci L. Powers
Notary Public, State of Ohio
Commission Expires: Feb. 24, 1999
[Seal]
6<PAGE>
STATE OF OHIO )
) S.S.:
COUNTY OF HAMILTON )
On the 24th day of July, 1996, before me personally came Gerald R.
Kondritzer to me known, who being by me duly sworn, did depose and say that
he resides at 2324 Madison Road, Cincinnati, Ohio 45208, that he is a Vice
President and Treasurer of CHIQUITA BRANDS INTERNATIONAL, INC., one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that one of the seals
affixed to the said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that
he signed his name thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed by
official seal the day and year in this certificate first above written.
/s/Barbara M. Howland
Notary Public, State of Ohio
Commission Expires: July 19, 1998
[Seal]
7<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Chiquita
Brands International, Inc. Form 10-Q for the six months ended June 30, 1996 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 205,338
<SECURITIES> 66,865
<RECEIVABLES> 229,556
<ALLOWANCES> 11,105
<INVENTORY> 251,280
<CURRENT-ASSETS> 859,724
<PP&E> 1,704,465
<DEPRECIATION> 546,239
<TOTAL-ASSETS> 2,575,669
<CURRENT-LIABILITIES> 478,711
<BONDS> 1,175,178
0
138,369
<COMMON> 18,520
<OTHER-SE> 570,519
<TOTAL-LIABILITY-AND-EQUITY> 2,575,669
<SALES> 1,338,504
<TOTAL-REVENUES> 1,338,504
<CGS> 1,006,590
<TOTAL-COSTS> 1,006,590
<OTHER-EXPENSES> 44,379
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,116
<INCOME-PRETAX> 78,317
<INCOME-TAX> 11,000
<INCOME-CONTINUING> 67,317
<DISCONTINUED> 0
<EXTRAORDINARY> (5,556)
<CHANGES> 0
<NET-INCOME> 61,761
<EPS-PRIMARY> 1.03<F1>
<EPS-DILUTED> .97<F1>
<FN>
<F1>Amounts include an extraordinary loss of $.10 per share ($.09 per share
fully diluted) resulting from refinancing of debt in the second quarter.
</FN>
</TABLE>
