SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File
December 31, 1995 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the I.R.S. Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each
Exchange On
Title of Each Class Which Registered
------------------------- -------------------------
Capital Stock ($.33 par value) New York, Pacific, Boston
$2.875 Non-Voting Cumulative Preferred
Stock, Series A New York
10-1/2% Subordinated Debentures due
August 1, 2004 New York, Pacific
Securities registered pursuant to Section 12(g) of the Act:
None
Other securities for which reports are submitted pursuant to
Section 15(d) of the Act:
9-1/8% Senior Notes due March 1, 2004
9-5/8% Senior Notes due January 15, 2004
11-1/2% Subordinated Notes due June 1, 2001
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 _____
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of March 1, 1996, there were 55,153,531 shares of Common
Stock outstanding. The aggregate market value of Common Stock
held by non-affiliates at March 1, 1996 was approximately $485
million.
Documents Incorporated by Reference
Portions of the Chiquita Brands International, Inc. 1995
Annual Report to Shareholders are incorporated by reference in
Parts I and II. Portions of the Chiquita Brands
International, Inc. Proxy Statement for the 1996 Annual
Meeting of Shareholders are incorporated by reference in Part
III.
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page
Part I
Item 1. Business 1
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote
of Security Holders 8
Executive Officers of the Registrant 8
Part II
Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters 9
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 9
Item 8. Financial Statements and Supplementary
Data 9
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 9
Part III
Item 10. Directors and Executive Officers of
the Registrant 10
Item 11. Executive Compensation 10
Item 12. Security Ownership of Certain
Beneficial Owners and Management 10
Item 13. Certain Relationships and Related
Transactions 10
Part IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 10
Signatures 12
<PAGE>
PART I
------------------------
ITEM 1 - BUSINESS
----------------------------------
GENERAL
-------------------------
Chiquita Brands International, Inc. ("Chiquita" or the
"Company") is a leading international marketer, producer and
distributor of bananas and other quality fresh and processed
food products sold under the Chiquita and other brand names.
In addition to bananas, these products include other tropical
fruit, such as mangoes, kiwi and citrus, and a wide variety of
other fresh produce. The Company's operations also include
fruit and vegetable juices and beverages; processed bananas
and other processed fruits and vegetables; fresh cut and
ready-to-eat salads; and edible oil-based consumer products.
With the completion of the sale of its meat business in
December 1995, the Company's continuing operations constitute
its only industry segment. See Note 2 to the Consolidated
Financial Statements included in the Company's 1995 Annual
Report to Shareholders, which is incorporated herein by
reference.
In recent years, the Company has capitalized on its
"Chiquita" and other premium brand names by building on its
worldwide leadership position in the marketing, distribution
and sourcing of bananas and by expanding its quality fresh
fruit and vegetable operations. Chiquita has benefited from
its multi-year investment spending program and its
restructuring and cost reduction efforts to significantly
reduce production, distribution and overhead costs. (See
"Distribution and Logistics" and "Sourcing" below and ITEM 2 -
PROPERTIES.) Its restructuring and cost reduction efforts
also included measures to reorganize the Company's European
banana operations to adjust to a quota which effectively
restricts the volume of Latin American bananas imported into
the European Union, as well as to the banana Framework
Agreement which authorizes the imposition of additional
restrictive and discriminatory quotas and export licenses on
non-European banana marketing firms. (See RISKS OF
INTERNATIONAL OPERATIONS below.) In addition to the sale of
its meat business, in 1995 Chiquita completed additional steps
in its ongoing program to improve shareholder value. These
included sales of older ships, the sale of the Costa Rican
operations of its Numar edible oils group, the shut-down of a
portion of the Company's juice operations and the
reconfiguration of banana production assets. See
"Management's Analysis of Operations and Financial Condition"
and Notes 2 and 3 to the Consolidated Financial Statements
included in the Company's 1995 Annual Report to Shareholders.
No individual customer accounted for more than 10% of the
Company's consolidated net sales during any of the last three
years. See "Management's Analysis of Operations and Financial
<PAGE>
Condition," which is incorporated by reference in Item 7
herein from the Company's 1995 Annual Report to Shareholders,
for a discussion of factors affecting results of the Company's
operations for 1995, 1994 and 1993. Factors which may cause
fluctuations in the results of operations are also discussed
in the description of the Company's operations below.
Fresh Food Products
-----------------------------
The Company markets an extensive line of fresh fruits and
vegetables sold under the "Chiquita" and other brand names.
The core of Chiquita's fresh foods operations is the
marketing, distribution and sourcing of bananas. Sales of
bananas accounted for approximately 60% of consolidated net
sales in each of the last three years.
-1-
Chiquita believes it derives competitive benefits in the
marketing, distribution and sourcing of fresh foods through
its:
- Recognized brand names and reputation for quality;
- Strong market positions in Europe and North America, its
principal markets;
- Modern, cost-efficient fresh fruit transportation
system; and
- Industry leading position in terms of number and
geographic diversity of its sources of bananas, which
enhances its ability to provide customers with premium
quality products on a consistent basis.
Marketing. Chiquita markets bananas under brand names
including "Chiquita," "Chiquita Jr.," "Consul," "Amigo,"
"Chico" and "Bananos." In 1995, Chiquita sold approximately
one-half of its total banana volumes in Europe and over 40% of
its banana volumes in North America. As a result of a
decision in 1994 to significantly scale back "green" banana
trading operations in Japan, sales of bananas in the Far East
market are no longer a significant portion of the Company's
total banana net sales.
The Company has been able to obtain a premium price for its
bananas due to its reputation for quality and its innovative
marketing techniques, which include providing retail marketing
support services to its customers. Chiquita sells bananas
through its regional sales organizations and commissioned
agents throughout the world directly to wholesalers and retail
chains, which in turn ripen and resell or distribute the
fruit. The Company also sells bananas ripened in its own
facilities or under contractual ripening arrangements.
<PAGE>
Bananas are highly perishable and must be brought to market
and sold generally within 60 days after harvest. Therefore,
selling prices which importers receive for bananas depend on
the available supplies of bananas and other fruit in each
market, the relative quality, and wholesaler and retailer
acceptance of bananas offered by competing importers. Excess
supplies may result in increased price competition. Profit
margins on sales may also be significantly affected by
fluctuations in currency exchange rates. (See RISKS OF
INTERNATIONAL OPERATIONS below.)
Adverse weather such as major windstorms or floods in
banana growing areas may restrict worldwide supplies and
result in increased prices for bananas. However, competing
importers may be affected differently, depending upon their
ability to obtain adequate supplies from sources in other
geographic areas.
Banana marketing is highly competitive. In order to
compete successfully, Chiquita must be able to source bananas
of uniformly high quality and distribute them in worldwide
markets on a timely basis. A limited number of competitors
account for most of the banana imports throughout the world.
The Company believes it sells more bananas than any of its
competitors, accounting for approximately one-fourth of all
bananas imported into its principal markets. While smaller
companies, including growers' cooperatives, are a competitive
factor, Chiquita's principal competitors are a limited number
of large international companies.
Although production of bananas tends to be relatively
stable throughout the year, competition in the sale of bananas
comes not only from bananas sold by others, but also from
other fresh fruit which may be seasonal in nature. The
resulting seasonal variations in demand cause banana pricing
to be seasonal, with the first six months of the calendar year
being the stronger period.
Through a network of fresh fruit and vegetable operations
in Europe, North America and the Pacific Rim, Chiquita sells
and distributes a variety of quality fruit and vegetable
products. These products include
-2-
quality fresh fruit such as apples, apricots, cherries,
grapes, peaches, pears, plums, strawberries and tomatoes sold
under the "Chiquita," "Frupac" and other brand names; and a
wide variety of fresh vegetables including asparagus, beans,
broccoli, carrots, celery, lettuce, onions and potatoes sold
under the "Premium" and various other brand names. Certain of
these operations involve both the production and marketing of
fresh fruits and vegetables while others involve only
marketing. These businesses compete against numerous other
<PAGE>
regional fresh fruit and vegetable producers and distributors.
No single competitor has a dominant market share in this
industry due to the regionalized nature of these businesses.
Distribution and Logistics. Transportation expenses
comprise approximately one-fourth of the total costs incurred
by Chiquita in its sale of tropical fruit. Chiquita ships its
tropical fruit in vessels owned or chartered by the Company.
All of Chiquita's tropical fruit shipments into the North
American market are delivered using pallets or containers that
minimize damage to the product by eliminating the need to
handle individual boxes. As a result of a multi-year
investment program, now completed, and the elimination of a
substantial amount of chartered ship capacity under Chiquita's
restructuring program, Chiquita now owns or controls under
long-term lease approximately 80% of its aggregate shipping
capacity. The remaining capacity is operated under
contractual arrangements having terms of less than two years.
(See also ITEM 2 - PROPERTIES below and Notes 5 and 6 to the
Consolidated Financial Statements.) Chiquita also operates
loading and unloading facilities which it owns or leases in
Central and South America and various ports of destination.
Sourcing. Chiquita has a greater number and geographic
diversity of sources of bananas than any of its competitors.
During 1995, approximately one-third of all bananas sold by
Chiquita were sourced from Panama. Bananas are sourced from
numerous other countries, including Colombia, Costa Rica,
Ecuador, Guatemala and Honduras which comprised 6% to 23%
(depending on the country) of bananas sold by Chiquita during
1995.
In 1995, approximately two-thirds of the bananas sourced by
Chiquita were produced by subsidiaries and the remainder were
purchased under purchase fruit arrangements from suppliers.
Under certain of the purchase fruit arrangements, which
require less initial capital investment by the Company than
owned production facilities, Chiquita furnishes financial and
technical assistance to its suppliers to support the
production and preparation of bananas for shipment. No single
supplier provided a significant portion of the bananas sold by
Chiquita in 1995.
Bananas are vulnerable to adverse local weather conditions,
which are quite common but difficult to predict, and to crop
disease. These factors, which may result in lower sales
volume and increased costs, may also restrict worldwide
supplies and result in increased prices for bananas. However,
competitors may be affected differently depending upon their
ability to obtain adequate supplies from sources in other
geographic areas. Chiquita's overall risk from these factors,
as well as from political changes in countries where bananas
are grown, is reduced by the low concentration of its banana
production in individual producing locations.
<PAGE>
Labor cost, which is a significant portion of the cost of
producing bananas, varies depending on the country of origin.
Since bananas are shipped in cardboard boxes, paper cost is
also significant.
The geographically diverse sources of other fresh fruits
and vegetables primarily involve formal and informal purchase
arrangements with numerous unrelated producers and importers.
None of these arrangements is individually significant to the
Company's operations.
-3-
Processed Food Products
----------------------------------------
Chiquita's processed food products include fruit and
vegetable juices sold primarily in the United States;
processed fruit and vegetables, including processed bananas,
sold worldwide under the "Chiquita," "Friday" and other
brands; fresh cut and ready-to-eat salads sold in the United
States under the "Club Chef" and "Naked Foods" brands; and
other consumer products (primarily edible oils) sold in
Honduras under the "Numar" and other brand names.
Chiquita branded fruit juices include a full line of
tropical blends which are manufactured by others to Chiquita's
specifications and sold in shelf-stable, refrigerated and
frozen varieties. Shelf stable individual servings come in
three blends, "Caribbean Splash," "Tropical Paradise" and
"Calypso Breeze," and are sold through club stores and mass
merchandisers throughout most of the United States. In
December 1995, the Company ceased direct marketing efforts of
its refrigerated and frozen product lines and licensed these
lines to a national fruit juice producer. In addition to the
three tropical blends above, the refrigerated and frozen lines
include "Cranberry Seabreeze," "Raspberry Passion," "Hawaiian
Sunrise" and "Orange Banana." The Company also produces and
markets natural fresh fruit and vegetable juices sold under
the "Chiquita," "Ferraro's Earth Juice" and "Naked Juice"
brands.
Chiquita's processed banana products include banana puree,
sliced bananas and other specialty products which are produced
by the Company and sold to producers of baby food, fruit
beverages, baked goods and fruit-based products, to
wholesalers of bakery and dairy food products, and to selected
licensees including Beech-Nut and General Mills.
Friday Canning Corporation ("Friday") is one of the largest
private-label vegetable processors in the United States.
Friday markets a full line of over twenty-five types of
processed vegetables to retail and food service customers
throughout the U.S. and other countries. Friday competes
directly with a few major producers of both branded and
private-label canned vegetables, as well as indirectly with
<PAGE>
numerous marketers of frozen and fresh vegetable products.
The vegetable processing industry is affected by the
availability of produce, which can vary due to local weather
conditions.
In December 1995, the Company sold the Costa Rican
operations of its Numar Group to a group consisting primarily
of Costa Rican and Panamanian investors. The Company's
remaining consumer products operations in Central America are
conducted through a 50%-owned joint venture which owns the
Numar Group's former Honduran edible oils business. The joint
venture sells its products under the "Numar," "Clover" and
other brand names and competes principally against a number of
small local firms and subsidiaries of multinational
corporations.
RISKS OF INTERNATIONAL OPERATIONS
-------------------------------------------------
Information about the Company's operations by geographic
area is included in Note 13 to the Consolidated Financial
Statements included in the Company's 1995 Annual Report to
Shareholders and is incorporated herein by reference.
On July 1, 1993, the European Union ("EU") implemented a
new quota effectively restricting the volume of Latin American
bananas imported into the EU. Implementation of the quota had
the effect of decreasing the Company's volume and market share
in Europe. The quota is administered through a licensing
system and grants preferred status to producers and importers
within the EU and its former colonies, while imposing quotas
and tariffs on bananas imported from other sources, including
Latin America, Chiquita's primary source of fruit. Since
imposition of the EU quota regime, prices within the EU have
increased to a higher
-4-
level than the levels prevailing prior to the quota. Banana
prices in other worldwide markets, however, have been lower
than in years prior to the EU quota, as the displaced EU
volume has entered those markets. In two separate rulings,
General Agreement on Tariffs and Trade ("GATT") panels found
this banana policy to be illegal. In March 1994, four of the
countries which had filed GATT actions against the EU banana
policy (Costa Rica, Colombia, Nicaragua and Venezuela) reached
a settlement with the EU by signing a "Framework Agreement."
The Framework Agreement authorizes the imposition of
additional restrictive and discriminatory quotas and export
licenses on U.S. banana marketing firms, while leaving EU
firms exempt. Costa Rica and Colombia implemented this
agreement in 1995, significantly increasing the Company s cost
to export bananas from these sources. Three additional
European countries (Sweden, Finland and Austria) joined the EU
<PAGE>
effective January 1, 1995. These countries, which had
substantially unrestricted banana markets in which the Company
supplied a significant portion of the bananas, are in the
process of transition to the restrictive EU quota and
licensing environment. The timing and exact nature of any
adjustments in the quota and licensing regulations that will
be made for these new EU members have not yet been determined.
Implementation of the quota regime continues to evolve and
there can be no assurance that the EU banana regulation will
not change further.
In September 1994, Chiquita and the Hawaii Banana Industry
Association made a joint filing with the Office of the U.S.
Trade Representative ("USTR") under Section 301 of the U.S.
Trade Act of 1974, charging that the EU quota and licensing
regime and the Framework Agreement are unreasonable,
discriminatory, and a burden and restriction on U.S. commerce.
In response to this petition, the U.S. Government initiated
formal investigations of the EU banana import policy and of
the Colombian and Costa Rican Framework Agreement export
policies. In January 1995, the U.S. Government announced a
preliminary finding against the EU banana import policy and in
September 1995, based on information obtained in the USTR's
investigation under Section 301, the United States, joined by
Guatemala, Honduras and Mexico, commenced a new international
trade challenge against the EU regime using the procedures of
the World Trade Organization ("WTO"). In January 1996, the
USTR announced that it had found the banana Framework
Agreement export policies of Costa Rica and Colombia to be
unfair. The USTR further announced it was not imposing
sanctions at that time, pending further consultations with
those countries to eliminate harm to U.S. commerce. In
February 1996, Ecuador, the world's largest exporter of
bananas, joined the United States, Guatemala, Honduras and
Mexico in challenging the EU regime under the WTO. Both the
WTO and Section 301 authorize retaliatory measures, such as
tariffs or withdrawal of trade concessions, against the
offending countries. However, there can be no assurance as to
the results of the WTO and Section 301 proceedings, the nature
and extent of actions that may be taken by the United States
or other adversely affected countries, or the impact on the EU
quota regime or the Framework Agreement.
Certain of the Company's operations are heavily dependent
upon products grown and purchased in Central and South
America. These activities, a significant factor in the
economies of many of the countries where the Company produces
and purchases bananas and other agricultural and consumer
products, are subject to risks that are inherent in operating
in such countries, including government regulation, currency
restrictions and other restraints, risks of expropriation and
burdensome taxes. There is also a risk that legal or
regulatory requirements will be changed or that administrative
policies will change. Certain of these activities are
<PAGE>
substantially dependent upon leases and other agreements with
the governments of these countries.
The Company leases all the agricultural land it uses in
Panama from the Republic of Panama under lease and operating
agreements which automatically renew each year unless canceled
by either party on four years' prior notice. In the event of
termination of the agreements, the government of Panama, which
previously purchased such agricultural lands from the Company,
has the right to purchase other Panamanian assets of the
Company at specified values which approximate carrying value
but may be less than market value.
-5-
Certain facilities in Honduras previously owned by the
Company were transferred in prior years to the government of
Honduras with provision for their subsequent use by the
Company. Such facilities include a railroad which the Company
operates under a lease with the government of Honduras which
expires on December 31, 1998.
The Company's operations worldwide and the products it
sells are subject to numerous governmental regulations and
inspections by environmental, food safety and health
authorities. These regulations directly affect day-to-day
operations. Although the Company believes it is substantially
in compliance with such regulations, actions by regulators
have in the past required, and in the future may require,
operational modifications or capital improvements at various
locations or the payment of fines and penalties, or both.
The Company's operations are conducted in many areas of the
world and involve transactions in a variety of currencies.
Results of its operations may be significantly affected by
fluctuations of currency exchange rates. Such fluctuations
affect the Company's banana operations because many of its
costs are incurred in currencies different from those that are
received from the sale of bananas in non-U.S. markets, and
there is normally a time lag between the incurrence of such
costs and collection of the related sales proceeds. The
Company's policy is to exchange local currencies for dollars
immediately upon receipt, thus reducing exchange risk. The
Company also engages from time to time in various hedging
activities to further minimize potential losses on cash flows
originating in currencies other than the U.S. dollar. See
Notes 1 and 8 to the Consolidated Financial Statements and
"Management's Analysis of Operations and Financial Condition"
included in the Company's 1995 Annual Report to Shareholders
for information with respect to currency exchange.
<PAGE>
LABOR RELATIONS
-----------------------------------------
The Company employs a total of approximately 36,000
associates. Approximately 32,000 of these associates are
employed in Central and South America, including 28,000
workers covered by 85 labor contracts. One of these contracts
covering approximately 5,000 workers in La Lima, Honduras
expired April 1, 1995. The affected employees have continued
to work since the expiration of the contract. Negotiations on
a new contract with the workers' union are scheduled to begin
in June 1996. Other labor contracts expire from 1996 to 1999,
with approximately 45 of these contracts covering
approximately 4,000 employees expiring in 1996. Strikes or
other labor-related actions are often encountered upon
expiration of labor contracts and also frequently occur during
the term of the contracts.
ITEM 2 - PROPERTIES
---------------------------
The Company owns approximately 90,000 acres and leases
approximately 40,000 acres of improved land, principally in
Costa Rica, Panama and Honduras. Substantially all of this
land is used for the cultivation of bananas and support
activities, including the maintenance of floodways. The
Company also owns power plants, packing stations, warehouses,
irrigation systems and loading and unloading facilities used
in connection with its operations.
The Company owns or controls under long-term bareboat
charters 16 ocean-going refrigerated vessels and has 4
additional such vessels under time charters, primarily for
transporting tropical fruit sold by the Company. From time to
time, excess capacity may be chartered or subchartered to
others. In addition, the Company enters into spot charters
and contracts of affreightment as necessary to supplement its
transportation resources. The Company also owns or leases
other related equipment, including refrigerated container
units, used to transport fresh food. The owned ships are
pledged as collateral for related financings.
-6-
Properties used by the Company's processed foods operations
include processing facilities in Costa Rica and Honduras, and
vegetable canning facilities in Wisconsin. Other operating
units of the Company own, lease and operate properties,
principally in the United States and Central and South
America. The Company leases the space for its headquarters in
Cincinnati, Ohio.
<PAGE>
For further information with respect to the Company's
physical properties, see the descriptions under ITEM 1 -
BUSINESS - GENERAL above, and Notes 5 and 6 to the
Consolidated Financial Statements included in the Company's
1995 Annual Report to Shareholders.
ITEM 3 - LEGAL PROCEEDINGS
---------------------------------------------------
A number of legal actions are pending against the Company,
including those described below. Although some of these
cases, including the DBCP cases described below, are in very
preliminary stages, based on information currently available
to it and advice of counsel, management does not believe such
litigation will, individually or in the aggregate, have a
material adverse effect on the financial statements of the
Company.
Several suits are pending in different jurisdictions
against the manufacturers of an agricultural chemical called
DBCP and against the Company and other banana producing
companies which used DBCP primarily in the 1970's. Most of
the plaintiffs are foreign citizens who claim to have been
employees of banana companies and allege sterility and other
injuries as a result of exposure to DBCP. Plaintiffs' alleged
damage claims have yet to be quantified.
Several of these lawsuits were filed in Texas state court
in 1993. These cases originally represented claims on behalf
of approximately 25,000 individuals, of whom approximately
4,000 purported to have claims against the Company. All but
one of the cases involving Chiquita were removed to the U.S.
District Court for the Southern District of Texas and, in
October 1995, dismissed on the grounds that courts in the
plaintiffs' home countries (limited to Costa Rica, Panama and
the Philippines in the case of suits involving the Company)
were more appropriate forums for pursuing their claims. The
plaintiffs, which include approximately 3,650 alleging claims
against Chiquita, have appealed these dismissals to the U.S.
Court of Appeals for the Fifth Circuit. The other case
involving Chiquita is still pending in Texas state court,
where procedural issues are being addressed. This case,
Narciso Borja, et al. v. Dow Chemical Company, et al.
(District Court of Dallas County), involves approximately
2,000 plaintiffs, including approximately 350 who claim that
the Company has liability for their alleged injuries.
A similar suit was filed in 1995 in Louisiana state court
by approximately 4,000 plaintiffs. The Company does not have
information concerning how many of these plaintiffs allege
that the Company has liability for their injuries, but the
same manufacturer and banana producer defendants have been
sued in this case. This case, Lucas Pastor Canales Martinez,
et al. v. Dow Chemical Company, et al., has been removed to
<PAGE>
U.S. District Court for the Eastern District of Louisiana,
where defendants motion to dismiss in favor of more
appropriate forums and plaintiffs' motion to remand to state
court are pending.
As a result of the dismissals of the Texas suits described
above, similar suits against the Company and its subsidiaries
have been filed in Costa Rica, Panama and the Philippines (in
addition to previously filed actions in Costa Rica and
Panama). Cases involving approximately 5,000 plaintiffs who
purport to have claims against the Company are currently
pending in those countries.
The Company believes it has a number of meritorious
defenses in all of the foregoing DBCP cases, including that at
all times during which it used DBCP commercially, the product
was registered for use by the
-7-
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.
The Wisconsin Department of Justice has brought three
actions against Friday Canning Corporation ("Friday"), a
wholly owned subsidiary of the Company, asserting violations
of certain Wisconsin environmental laws at Friday canning
facilities located in Wisconsin. The actions were filed in
Circuit Courts in Fond du Lac and Columbia Counties in
September 1995 and Greenlake County in January 1996. The
actions seek unspecified civil penalties and other relief for
alleged violations of state-issued wastewater discharge
permits and of laws governing such discharges.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------------------------------------------------------------
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------
Carl H. Lindner (age 76) - Mr. Lindner has been Chairman of
the Board of Directors and Chief Executive Officer of the
Company since 1984. He is also Chairman of the Board and
Chief Executive Officer of American Financial Group, Inc.
("AFG"), a holding company formed in April 1995 which, through
its subsidiaries, is engaged principally in specialty and
multi-line property and casualty insurance businesses and in
the sale of tax-deferred annuities. For over 35 years, Mr.
Lindner has been Chairman of the Board and Chief Executive
Officer of American Financial Corporation, which became an AFG
subsidiary in 1995.
<PAGE>
Keith E. Lindner (age 36) - Mr. Lindner has been President
and Chief Operating Officer of the Company since 1989 and
President of its Chiquita Brands, Inc. subsidiary since 1986.
He was Senior Executive Vice President of the Company from
1986 until 1989. Mr. Lindner is also a Vice Chairman of AFG.
Steven G. Warshaw (age 42) - Mr. Warshaw has been the
Company's Executive Vice President and Chief Administrative
Officer since 1990 and was named Chief Financial Officer of
the Company in 1994. Mr. Warshaw has served in various
capacities since 1986.
Robert F. Kistinger (age 43) - Mr. Kistinger was named
Senior Executive Vice President of the Company's Chiquita
Banana Group in 1994. He was Executive Vice President,
Operations for the Company's Chiquita Tropical Products
Division from 1989 to 1994 and has served in various
capacities since 1980.
Robert W. Olson (age 50) - Mr. Olson was elected Vice
President, General Counsel and Secretary of the Company in
August 1995. From 1987 to 1995, he served as Senior Vice
President, General Counsel and Secretary of American Premier
Underwriters, Inc. (formerly named The Penn Central
Corporation), an affiliate of AFG. He was Senior Vice
President and Secretary of AFG from April 1995 until he joined
the Company.
Jos P. Stalenhoef (age 54) - Mr. Stalenhoef was named
President, Chiquita Banana-North American Division in 1994.
He was Senior Vice President, North America, Chiquita Tropical
Products Division from 1989 to 1994 and has served in various
capacities since 1988.
William A. Tsacalis (age 52) - Mr. Tsacalis has been Vice
President and Controller of the Company since 1987. He was
Controller from 1984 to 1987 and has served in various
capacities since 1980.
Carl H. Lindner provides broad policy determination and
guidance to operating management, which is headed by Keith E.
Lindner, but devotes substantial portions of his time to the
affairs of AFG and its subsidiaries.
-8-
PART II
-------------------
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
-------------------------------------------------------------
The number of shareholders at March 1, 1996 and the markets
for the Company's capital stock are set forth on page 24 of
the Company's 1995 Annual Report to Shareholders under
<PAGE>
"Investor Information." Price ranges of the Company's capital
stock and dividends declared thereon are set forth in Note 15
to the Consolidated Financial Statements included in the 1995
Annual Report to Shareholders. Restrictions on the Company's
ability to declare and pay dividends are described in Note 7
to the Consolidated Financial Statements included in the 1995
Annual Report to Shareholders. All such information is
incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
-------------------------------------------------------------
This information is included in the table entitled
"Selected Financial Data" on page 6 of the Company's 1995
Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------
This information is included under the caption
"Management's Analysis of Operations and Financial Condition"
included on pages 7 through 9 of the Company's 1995 Annual
Report to Shareholders and is incorporated herein by
reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------------------------
The Consolidated Financial Statements of Chiquita Brands
International, Inc. and its subsidiaries included on pages 10
through 22 of the Company's 1995 Annual Report to
Shareholders, and "Quarterly Financial Data" which is set
forth in Note 15 to such Consolidated Financial Statements,
are incorporated herein by reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
-------------------------------------------------------------
None.
-9-
PART III
-----------------------
Except for information relating to the Company's executive
officers set forth in Part I above, the information required
by the following Items will be included in Chiquita's
definitive Proxy Statement which will be filed with the
Securities and Exchange Commission in connection with the 1996
Annual Meeting of Shareholders and is incorporated herein by
reference.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION
-------------------------------------------------------------
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
-------------------------------------------------------------
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------------
PART IV
-----------------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
-------------------------------------------------------------
(a) 1. Financial Statements. The following consolidated
financial statements of the Company and the Report of
Independent Auditors are included in the Company's
1995 Annual Report to Shareholders and are
incorporated by reference in Part II, Item 8:
<TABLE>
<CAPTION>
Page of
Annual Report
<S> <C>
Report of Independent Auditors 5
Consolidated Statement of Income for 1995,
1994 and 1993 10
Consolidated Balance Sheet at December 31,
1995 and 1994 11
Consolidated Statement of Shareholders'
Equity for 1995, 1994 and 1993 12
Consolidated Statement of Cash Flow
for 1995, 1994 and 1993 13
Notes to Consolidated Financial
Statements 14
</TABLE>
2. Financial Statement Schedule. Financial Statement
Schedule II - Allowance for Doubtful Accounts
Receivable is included on page 14 of this Annual
Report on Form 10-K. All other schedules are not
required under the related instructions or are
inapplicable and, therefore, have been omitted.
3. Exhibits. See Index of Exhibits (page 15) for
a listing of all exhibits filed with this Annual
Report on Form 10-K.
<PAGE>
(b) The following report on Form 8-K was filed during the
quarter ended December 31, 1995:
December 20, 1995 - to report the Company's sale of
its Meat Division to Smithfield Foods, Inc. and to
provide required unaudited pro forma condensed
consolidated financial statements excluding the Meat
Division.
-10-
<PAGE>
(This page left blank intentionally.)
-11-
<PAGE>
SIGNATURES
- - --------------------------
Pursuant to the requirements of Section 13 or 15(d) 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 on March 25, 1996.
CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ Carl H. Lindner
Carl H. Lindner
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities
indicated below on March 25, 1996:
/s/ Carl H. Lindner Chairman of the Board and
Carl H. Lindner Chief Executive Officer
/s/ Keith E. Lindner Director; President and Chief
Keith E. Lindner Operating Officer
/s/ Fred J. Runk Director
Fred J. Runk
Jean H. Sisco* Director
Jean H. Sisco
William W. Verity* Director
William W. Verity
Oliver W. Waddell* Director
Oliver W. Waddell
-12-
<PAGE>
/s/ Ronald F. Walker Director
Ronald F. Walker
/s/ Steven G. Warshaw Executive Vice President,
Steven G. Warshaw Chief Administrative Officer and
Chief Financial Officer
/s/ William A. Tsacalis Vice President and Controller
William A. Tsacalis (Chief Accounting Officer)
* By /s/ William A. Tsacalis
Attorney-in-Fact**
** By authority of powers of attorney filed with this annual
report on Form 10-K.
-13-
<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
(In thousands)
Year Ended December 31,
1995 1994 1993
--------- -------- -------
<S> <C> <C> <C>
Balance at beginning of period $13,060 $12,393 $11,040
--------- -------- -------
Additions:
Charged to costs and expenses 4,303 6,966 4,797
-------- -------- -------
Deductions:
Write-offs 5,703 6,330 3,220
Other, net 350 (31) 224
-------- -------- -------
6,053 6,299 3,444
-------- -------- -------
Balance at end of period $11,310 $13,060 $12,393
======== ======== =======
</TABLE>
-14-
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
Index of Exhibits
Exhibit
Number Description
*3-a Second Restated Certificate of Incorporation, filed as
Exhibit 3(a) to Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994
*3-b By-Laws, filed as Exhibit 3-b to Annual Report on Form
10-K for the year ended December 31, 1992
4 Registrant has no outstanding debt issues exceeding
10% of the assets of Registrant and its consolidated
subsidiaries. The Registrant will furnish to the
Securities and Exchange Commission, upon request,
copies of all agreements and instruments defining the
rights of security holders for debt issues not
exceeding 10% of the assets of Registrant and its
consolidated subsidiaries.
*10-a Lease of Lands and Operating Contract between United
Brands Company, Chiriqui Land Company, Compania
Procesadora de Frutas and the Republic of Panama,
dated January 8, 1976, effective January 1, 1976,
filed as Exhibit 10-a to Annual Report on Form 10-K
for the year ended December 31, 1993
10-b Agreement dated January 11, 1996 effective January 1,
1996 between Tela Railroad Company and the Honduran
National Railroad
*10-c Stock Purchase Agreement dated December 20, 1995
between Smithfield Foods, Inc. ( Smithfield ) and the
Company filed as Exhibit 7.1 to Schedule 13D dated
December 20, 1995 filed by the Company and certain
other persons with respect to Smithfield common stock
Executive Compensation Plans
10-d 1986 Stock Option and Incentive Plan, as amended
*10-e Individual Stock Option Plan and Agreement, filed as
Exhibit 4 to Registration Statement on Form S-8 No.
33-25950 dated December 7, 1988
10-f Amended and Restated Deferred Compensation Plan
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends
13 Chiquita Brands International, Inc. 1995 Annual Report
to Shareholders (pages 5 through 22 and page 24)
21 Subsidiaries of Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedule
99 Annual Report on Form 11-K for the Chiquita Savings
and Investment Plan for 1995 will be filed by
amendment on or before June 28, 1996.
* Incorporated by reference.
<PAGE> -15-
Exhibit 10-b
PRIVATE LEASE CONTRACT FOR A RAILROAD COMPLEX, BETWEEN
FERROCARRIL NACIONAL DE HONDURAS /Honduran National Railroad/
AND TELA RAILROAD COMPANY. We, Norberto Torres, of legal age,
married, a civil engineer, a Honduran, domiciled in this city,
acting in my capacity of General Manager and, as such, as
Administrative, Legal and Extrajudicial Representative of
Ferrocarril Nacional de Honduras, an autonomous entity of the
state of Honduras with legal status, its own assets and
indefinite term, created by Decree Number Forty-Eight, issued
by the National Congress on the thirtieth day of April,
nineteen hundred fifty-eight, whose Article Thirty-three sets
forth that this institution shall be represented by its
General Manager, with sufficient powers for this type of acts;
and in accordance with the Certification of the Sole Point of
Minutes Number 543, of the meeting of the Board of Directors
of said Autonomous Entity, dated the twenty-eighth day of
February, nineteen hundred ninety-four, which shows the
election of the declarant, Mr. Norberto Torres, as General
Manager of Ferrocarril Nacional de Honduras, who occupies said
function and is authorized to execute this contract, as arises
from the Certification of the Sole Point of the special
meeting of the Board of Directors No. 548 of the fourth day of
January, nineteen hundred ninety-six. For the purposes of this
contract, Ferrocarril Nacional de Honduras shall be
hereinafter referred to as "THE LESSOR," and, as party of the
other part, Mr. Arnoldo Manuel Palma Isaacs, of legal age,
married, a business agent, of Panamanian nationality, with
legal residence in Honduras and domiciled in the city of La
Lima, Department of Cortes, in transit in this city, who
appears as General Representative of Tela Railroad Company, a
joint stock company incorporated and existing pursuant to the
laws of the State of Delaware, United States of America,
located in the city of Wilmington in said State, which was
acknowledged as a legal entity, and authorized to do business
in the Republic of Honduras, under decision issued by the
Executive Power through the Ministry of Government, Justice
and Health on the twentieth day of February, nineteen hundred
thirteen. For the purposes of this contract, Tela Railroad
Company shall be hereinafter referred to as "THE LESSEE." The
declarant, Mr. Arnoldo Manuel Palma Isaacs, proves the
capacity in which he appears with the public instrument of
substitution of general power of attorney, authorized in the
city of La Lima, Department of Cortes, by Notary Pompilio
Amador, and registered under number twenty-five (25) of Volume
forty-four (44) of the Commercial Register of San Pedro Sula.
Said instrument of general power of attorney grants sufficient
powers for the representative to sign all types of
instruments, contracts and agreements. And, after I verified
that the declarants are in full enjoyment of their civil
rights, they freely and spontaneously declared: FIRST: "THE
LESSOR" and "THE LESSEE" declare that: On the twenty-ninth day
of December, nineteen hundred ninety-four, under private<PAGE>
document accepted and signed by both parties, they executed an
Agreement for Temporary Lease of a Railroad Complex, for
theterm of one year, counted from the first day of January,
nineteen hundred ninety-five; On this date, and in the absence
of any non-compliance or outstanding debts of the parties
under the lease contract which expired on December 31,
nineteen hundred ninety-four, they terminate, by mutual
agreement, the aforementioned Lease of the Railroad Complex
and, pursuant to Clauses 3 and 4 of the Agreement, and item F)
of the Second Clause of the aforementioned Lease Contract,
"THE LESSEE" returns to "THE LESSOR" the assets of the
Railroad Complex, railroad lines, yards, branch lines, tracts,
sections, bridges, rights-of-way, equipment and installations
set forth in the contract expired in December 1994, and the
respective inventories, and "THE LESSOR" receives them to its
full satisfaction. SECOND. "THE LESSOR" declares that: It is
the legitimate owner of the following assets: A) Railroad line
connecting and passing through the following points: 1. From
the Town Hall to the city of El Progreso, on a distance of
eighty-four kilometers and six hundred eighty thousands of a
kilometer (84.68 km), including its yards, branch lines,
tracts, sections, bridges, and also the railroad yard of Tela.
2. From the city of La Lima to Baracoa, on a distance of one
hundred thirteen kilometers and nine hundred twenty thousands
of a kilometer (113.920 km), including its yards, branch
lines, tracts, sections, and bridges; with a total of one
hundred ninety-eight kilometers and six hundred thousands of a
kilometer (198.600 km), including the yard lines found in
Puerto Cortes. Both lines, their branch lines and sections,
are on the respective dormers, embankments, bridges, and their
respective right-of-way. B. "THE LESSOR" also owns the rest of
the principal lines, branch lines, tracts, and railroad
structures connected with those described above, as well as
all railroad lines and railroad yards of the country. C) Other
railroad assets described in the enclosed inventory, which is
also signed by the contracting parties and is an integral part
hereof. THIRD. "THE LESSOR" continues and declares that the
assets described in the Second Clause, items A and C, above,
are leased to "THE LESSOR" and also constitute an easement for
transit to the installations of the railroad complex described
in paragraph b) of the Second Clause, under the following
conditions: a) In transport operations for its business, "THE
LESSEE" shall be entitled to use and operate exclusively all
the assets of the Railroad Complex described in items A and C
of the Second Clause of this instrument; however, concerning
transit by the railroad lines described in item A of said
Clause, "THE LESSEE" shall have preferred use and operation at
its discretion, through its control office, in the facilities
described under item B of the Second Clause. "THE LESSEE"
shall be entitled to share the easement with "THE LESSOR" or
with third parties, to which the latter grants right-of-way
after compliance with the formalities set forth herein. In
order to avoid delaying the operations of both parties,
transit by the facilities described in item B, second clause,
<PAGE>
shall be regulated by "THE LESSOR" through its control office,
and must give preference to the banana transport traffic of
"THE LESSEE," its affiliates, and other producers, since this
is a perishable product. B) "THE LESSEE" shall pay an annual
rent for the lease and easement set forth in this clause, in
the amount of TWO HUNDRED SEVENTY-FIVE THOUSAND U.S. DOLLARS
(US$ 275,000.00). The agreed annual rent shall be paid at the
offices of Ferrocarril Nacional de Honduras in San Pedro Sula,
Department of Cortes, in Lempiras at the valid rate of
exchange established, or by consultation with the Central Bank
of Honduras within the first five business days of each month,
in equal monthly installments paid in advance. In the first
year of the lease, "THE LESSEE" shall pay in advance,
according to a disbursement schedule to be presented to the
Board of Directors, an amount of up to SIXTY THOUSAND U.S.
DOLLARS (US$ 60,000.00), in the equivalent in Lempiras
thereof, to be disbursed and deposited in a special account
with the Central Bank of Honduras in the name of Ferrocarril
Nacional de Honduras, the funds whereof shall be used for the
rehabilitation of the equipment and railroad, so that it may
operate as an independent, self-financing enterprise; FORTY-
FIVE THOUSAND U.S. DOLLARS (US$ 45,000.00) in the equivalent
in Lempiras thereof, shall be paid to Ferrocarril Nacional de
Honduras at its offices in San Pedro Sula, when signing the
contract. The balance of the rent for the first year, i.e. ONE
HUNDRED SEVENTY THOUSAND U.S. DOLLARS (US$ 170,000.00) shall
be paid to Ferrocarril Nacional de Honduras in equal monthly
installments, paid in advance, without need for collection
formalities or any requirement, in the Lempiras equivalent
thereof, at the valid rate of exchange established, or by
consultation with the Central Bank of Honduras. In subsequent
years, the annual rent shall be paid as follows: The
equivalent of TWO HUNDRED FIFTEEN THOUSAND U.S. DOLLARS
annually (US$ 215,000.00/YEAR) shall be paid in equal monthly
installments paid in advance to Ferrocarril Nacional de
Honduras, and the equivalent of SIXTY THOUSAND U.S. DOLLARS
annually (US$ 60,000.00/YEAR) shall be disbursed to the order
of Ferrocarril Nacional de Honduras, to be deposited in a
special account with the Central Bank of Honduras, which fund
shall be used for the rehabilitation of the equipment and
railroad lines. c) This Contract of Lease and Easement is
executed under the method of automatic extensions for a period
of three years beginning as of the first day of January,
nineteen hundred ninety-six, whereas automatic extension is
understood as the maintenance of the same validity term of the
contract at the end of each operative year without need for a
new contract or agreement of the parties. However, this lease
may become with limited term if either party so notifies the
other in writing, in which case its term shall be three (3)
years beginning as of the first day of January of the year
following said notification. ch) If, due to reasons of
economic competition in railroad operations, equipment or
system obsolescence, severe deterioration of the tracks,
requirement for a new transport method, and other similar
<PAGE>
situations, "THE LESSEE" cannot continue to use the railroad,
it may notify in writing about its wish not to continue the
lease and easement, in which case they shall expire on
December 31 of the year following the notification. d) Under
normal conditions, the parties shall not be entitled to
request, nor to obtain, a reduction of the rates and periods,
nor immediate termination of the contract, with the following
exceptions: due to events of force majeure or act of nature
duly proven by a competent authority; due to government
political actions making necessary the reduction or
termination of the activities of "THE LESSEE" in the country,
due to operating conditions and provisions imposed by "THE
LESSOR," and making impossible or delaying the operations of
"THE LESSEE," or in the cases allowed by the law. e) During
the term of this contract, "THE LESSEE" must perform, for its
account and risk, the maintenance of the RAILROAD COMPLEX
leased by it, so as to conserve it in normal operating
condition, except for normal tear and wear arising from
legitimate use. Without prejudice to the above, "THE LESSOR"
shall timely formulate measures and indications to improve
said maintenance, and "THE LESSEE" shall be obligated to
comply with said indications, if they are technically and
economically reasonable. The maintenance referred to in this
clause shall be performed according to annual schedules agreed
upon by both parties, and periodically and discretionally
supervised by "THE LESSOR." These schedules shall be reviewed
by both parties, as the need arises. Furthermore, they agree
that the maintenance and repair of the lines from Puerto
Cortes to Baracoa and Tela - 45 1/2, on which a transit
easement is instituted, shall be the responsibility of "THE
LESSEE" concerning execution and cost, provided the need for
such works arises from the use of these lines and tracts by
"THE LESSEE." To guarantee the physical preservation of the
leased RAILROAD COMPLEX, "THE LESSEE" shall protect the
related lines with fire and/or lightning insurance, against
material damages caused by earthquake, hurricane, typhoon,
tornado, cyclone, wind, storm and/or hailstorm, and material
damages due to flood and/or tidal wave. Said insurance shall
be paid by "THE LESSEE," and must be in force for the entire
term of the lease and its extensions. f) At the end of this
Lease Contract and its extensions set forth in this clause, or
upon its termination due to any legal contractual cause, "THE
LESSEE" shall return the RAILROAD COMPLEX to "THE LESSOR" in
normal operating condition, except for normal tear and wear
arising from legitimate use. The determination of the normal
operating condition and of the normal tear and wear caused by
legitimate use of the RAILROAD COMPLEX, and its repair
expenses, shall be evaluated by "THE LESSOR" and, in the event
of disagreement with "THE LESSEE," the difference shall be
submitted to decision by two (2) experts appointed one by each
party; if the experts do not agree, the parties, by mutual
consensus, shall appoint a third arbitrator, appointed by
mutual consent by the two experts of the parties. The
arbitrator shall decide with the other two, and shall issue
<PAGE>
the verdict by resolution with simple majority. If the first
two do not agree on the appointment of the third, the parties
shall be free to resort to competent judicial authorities in
order to enforce their rights. Between the onset of the
disagreement between the two appointed experts and the final
decision with the intervention of the third expert, no more
than sixty business days may lapse; experts' costs shall be
paid by the parties. g) During the term of this Lease
Contract, "THE LESSEE" shall be entitled to fully or partially
modify, for its own account and risk, the current system of
railroad transport of bananas, after decision and written
agreement with "THE LESSOR." It shall be understood that "THE
LESSOR" agrees with the modification in the following cases:
1) In the event of modification of the hauling system, due to
a change in fruit transport method. In this case, the
materials remaining after making the modification shall be
delivered to "THE LESSOR." 2) In the event of change in the
size of the pallets, motivated by a change in the size of the
containers. 3) In the event of change in the engines of the
locomotives, tending to improve or extend their useful life.
4) Any other change in the system of the equipment and
installations designed to facilitate or improve fruit
transport by railroad. It is understood that these changes may
not, in any case, impair the structure of the equipment and
installations, according to the written opinion of the
technicians of both parties. h) "THE LESSOR," as owner of the
leased RAILROAD COMPLEX, shall be entitled to transit,
regulated by the control office of "THE LESSEE," with its
equipment and personnel, by the rail road lines, branch lines
and tracts included in the leased RAILROAD COMPLEX. Transit by
third parties authorized by "THE LESSOR" to operate on the
leased lines and lines under easement maintained by "THE
LESSEE" shall take place after agreement, without prejudice to
"THE LESSEE'"s right to request special conditions for this
service. i) "THE LESSOR" shall be liable for the cost of
damages, interference and losses caused by its operations on
the leased lines. j) At the end of this Contract and its
extensions, "THE LESSOR" shall have preferred right to
purchase all or part of the spare parts found warehouses,
which "THE LESSEE" wishes to sell, and which are necessary for
the operation of the RAILROAD COMPLEX; such purchase shall be
made at the book value of "THE LESSEE" in Honduras; k) "THE
LESSEE" shall have the right to assign this Lease and Easement
Contract, or to sublease the RAILROAD COMPLEX, totally or
partially, to the individual or corporation it deems
convenient, and which was previously accepted and approved for
this purpose by F.N.C. de H. In these cases, the assignee or
sublessee shall assume the same obligations, and shall have
the same rights held by "THE LESSEE." FOURTH. In turn, "THE
LESSEE" declares that: It accepts the lease and easements of
the RAILROAD COMPLEX granted by "THE LESSOR," under the terms,
periods and conditions set forth, and pledges to pay and
comply punctually with the obligations undertaken hereunder.
FIFTH. "THE LESSOR" declares that: It grants easement to "THE
<PAGE>
LESSEE," so that the latter may maintain and use, in crossed
and parallel lines, in the leased easement, and in that
returned, the roads, channels, irrigation ditches, telephone
and electricity lines, water and oil pipelines, irrigation and
drain systems, cableway systems for the transport of bananas
to packing stations, whereby "THE LESSEE" must take all
necessary steps so that, in the enjoyment of this easement,
and especially in the returned one, no damage is caused to the
use of crossed and parallel lines by "THE LESSOR. "THE LESSOR"
acknowledges that "THE LESSEE" has built, and currently
maintains, in various locations, within the easement
corresponding to the leased railroad lines, and in the
easement of the returned railroad lines, installations such
as: telephone and electricity lines, fruit packing stations,
irrigation pumps, roads, cultivations, channels, irrigation
ditches, water and oil pipeline systems, irrigation and drain
systems, and fruit transport by cableway, and buildings all
these installations are related to its agricultural
activities. Consequently, it grants it the right, as long as
these installations are maintained operational, to continue to
occupy said easement with such installations. After agreement
with "THE LESSOR," "THE LESSEE" may build new installations of
this type, related to its agricultural activities, within the
aforementioned easements. Furthermore, "THE LESSOR" grants to
"THE LESSEE" the right to continue using for its land
vehicles, as long as these installations are maintained
operational, the railroad bridges habilitated in the leased
Railroad Complex and in the returned one. The maintenance and,
if applicable, the rehabilitation and reconstruction of these
bridges, if they are used and required by "THE LESSEE" for its
land operations, shall be for the account of "THE LESSEE." All
easements and rights granted by "THE LESSOR" to "THE LESSEE"
in this Fifth Clause, shall be at no cost for the latter, and,
at the end of this Contract or of its extensions, they may be
renewed under the same conditions, after agreement between the
parties. SIXTH: "THE LESSEE" declares that: It accepts the
easements and rights granted by "THE LESSOR" in the previous
Clauses, and for the appropriate legal purposes, we sign this
Lease Contract, while the respective Public Instrument is
being drawn up under the same terms and conditions. In the
city of La Lima, Department of Cortes, on the eleventh day of
January, nineteen hundred ninety-six.
/Seal and signature/ /Signature/
NORBERTO TORRES ARNOLDO MANUEL PALMA ISAACS
/Signature/ /Signature/
WITNESS WITNESS WITNESS<PAGE>
CERTIFICATE OF ACCURACY
Deniza Kudish hereby affirms that she is a professional
translator, domiciled at 305 W. 28th St., Apt. 18-G, New York,
New York 10001, and that she is thoroughly familiar with the
Spanish and English languages, and that she translated the
attached contract entered into between Tela Railroad Company
and Ferrocarril Nacional de Honduras [the Honduran National
Railroad] from the Spanish language into the English language,
and that the attached text is a true and correct translation
of the original, to the best of her knowledge and belief.
/signature/
Deniza Kudish
This 19th day of March, 1996<PAGE>
Exhibit 10-D
CHIQUITA BRANDS INTERNATIONAL, INC.
1986 STOCK OPTION AND INCENTIVE PLAN
(as amended and restated March 25, 1992, further
amended by the Board of Directors on February 9, 1994,
and on December 14, 1994)
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
1986 STOCK OPTION AND INCENTIVE PLAN
T A B L E O F C O N T E N T S
I. OBJECTIVES 1
II. DEFINITIONS 1
III. ADMINISTRATION 3
3.1 The Committee 3
3.2 Awards 3
3.3 Guidelines 4
3.4 Delegation of Authority 4
3.5 Decisions Final 4
IV. SHARES SUBJECT TO PLAN 4
4.1 Shares 4
4.2 Adjustment Provisions 4
4.3 Dissolution or Liquidation 5
V. EFFECTIVE DATE OF AMENDED PLAN 5
VI. STOCK OPTIONS 5
6.1 Grants 5
6.2 Incentive Stock Options 5
6.3 Replacement Options 6
6.4 Terms of Options 6
6.5 Award of Options to Non-Employee Directors 7
VII. STOCK APPRECIATION RIGHTS 8
7.1 Grant 8
7.2 Term 8
7.3 Exercise 8
7.4 Payment 8
7.5 Non-Transferability and Termination 9
VIII. RESTRICTED AND UNRESTRICTED STOCK AWARDS 9
8.1 Grants of Restricted Stock Awards 9
8.2 Terms and Conditions of Restricted Awards 9
8.3 Unrestricted Stock Awards 9
IX. PERFORMANCE AWARDS 9
9.1 Performance Awards 9
9.2 Terms and Conditions of Performance Awards 10
X. NON-TRANSFERABILITY OF AWARDS 10
XI. TERMINATION OF AWARDS 10
11.1 Termination of Awards 10
11.2 Acceleration of Vesting and
Extension of Exercise Period
Upon Termination 11
XII. TERMINATION OR AMENDMENT OF THIS PLAN 11
12.1 Termination or Amendment 11
XIII. GENERAL PROVISIONS 12
13.1 No Right to Continued Employment 12
13.2 Other Plans 12
13.3 Withholding of Taxes 12
13.4 Reimbursement of Taxes 12
13.5 Governing Law 12
13.6 Liability 12
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
1986 STOCK OPTION AND INCENTIVE PLAN
(as amended and restated March 25, 1992, further
amended by the Board of Directors on February 9, 1994
and on December 14, 1994)
SECTION I.
OBJECTIVES
The objectives of this 1986 Stock Option and Incentive
Plan (the "Plan"), as amended and restated, are to enable
Chiquita Brands International, Inc. (the "Company") to compete
successfully in retaining and attracting key employees of
outstanding ability, to stimulate the efforts of such
employees toward the Company's objectives and to encourage the
identification of their interests with those of the Company's
shareholders.
SECTION II.
DEFINITIONS
For purposes of this Plan, the following terms shall have
the following meanings:
2.1 "Award" means any form of Stock Option, Stock
Appreciation Right, Restricted Stock Award, Unrestricted Stock
Award or Performance Award granted under this Plan.
2.2 "Award Agreement" means a written agreement
setting forth the terms of an Award.
2.3 "Award Date" or "Grant Date" means the date
designated by the Committee as the date upon which an Award is
granted.
2.4 "Award Period" or "Term" means the period
beginning on an Award Date and ending on the expiration date
of such Award.
2.5 "Board" means the Board of Directors of the
Company.
2.6 "Code" means the Internal Revenue Code of 1986, as
amended, or any successor legislation. Reference to any
particular section of the Code includes any successor
amendments or replacements of such section.
2.7 "Committee" means the committee appointed by the
Board and consisting of two or more Directors, none of whom
shall be eligible to receive any Award pursuant to this Plan
except as provided in Subsection 6.5. Members of the
Committee must qualify as Disinterested Persons within the
meaning of Rule 16b-3.
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2.8 "Common Stock" means the Company's Capital Stock,
$.33 par value.
2.9 "Disability" means a "permanent and total
disability" within the meaning of Section 22(e)(3) of the
Code.
2.10 "Disinterested Person" means a member of the Board
who was not, during the year prior to being appointed to the
Committee, or during the period of service as an administrator
of this Plan, granted or awarded equity securities pursuant to
the Plan or pursuant to any other plan of the Company, except
to the extent consistent with the disinterested plan
administration requirements under Rule 16b-3.
2.11 "Eligible Employee" means any person (other than
one who receives retirement benefits, consulting fees,
honorariums, and the like from the Company) (i) who performs
services for the Company or a Subsidiary, including any
individual who is an officer or director of the Company or a
Subsidiary; and (ii) is compensated on a regular basis by the
Company or a Subsidiary. Directors who are not full-time
employees of the Company or a Subsidiary are not eligible to
receive Awards under this Plan, except as set forth in
Subsection 6.5. Eligibility under this Plan shall be
determined by the Committee.
2.12 "Fair Market Value" means, as of any date, the
average of the highest and lowest quoted selling prices of a
Share as reported on the New York Stock Exchange Composite
Transactions list (or such other consolidated transaction
reporting system on which the Shares are primarily traded), or
if the Shares were not traded on such day, then the next
preceding day on which the Shares were traded, all as reported
by such source as the Committee may select. If the Shares are
not traded on a national securities exchange or other market
system, Fair Market Value shall be set under procedures
established by the Committee.
2.13 "Incentive Stock Option" means any Stock Option
awarded under Section VI of this Plan intended to be and
designated as an "Incentive Stock Option" within the meaning
of Section 422 of the Code or any successor provision.
2.14 "Non-Qualified Stock Option" means any Stock
Option awarded under Section VI of this Plan that is not an
Incentive Stock Option.
2.15 "Officer" means a person who is considered to be
an officer of the Company under Rule 16a-1(f).
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2.16 "Option Price" or "Exercise Price" means the price
per share at which Common Stock may be purchased upon the
exercise of an Option or an Award.
2.17 "Participant" means an Eligible Employee to whom
an Award has been made pursuant to this Plan.
2.18 "Replacement Option" means a Non-Qualified Stock
Option granted pursuant to Subsection 6.3, upon the exercise
of a Stock Option granted pursuant to this Plan where the
Option Price is paid with previously owned shares of Common
Stock.
2.19 "Restricted Stock" means those shares of Common
Stock issued pursuant to a Restricted Stock Award which are
subject to the restrictions set forth in the related Award
Agreement.
2.20 "Restricted Stock Award" means an award of a fixed
number of Shares to a Participant which is subject to
forfeiture provisions and other conditions set forth in the
Award Agreement.
2.21 "Retirement" means any termination of employment
or service on the Board (other than by death or Disability) by
an employee or a director who is at least 65 years of age or
55 years of age with at least 10 years of employment with or
service on the Board of the Company or a Subsidiary.
2.22 "Rule 16b-3" and "Rule 16a-1(f)" mean Securities
and Exchange Commission Regulations 240.16b-3 and 240.16a-
1(f) or any corresponding successor regulations.
2.23 "Share" means one share of the Company's Common
Stock.
2.24 "Stock Appreciation Right" or "SAR" means the
right to receive, for each unit of the SAR, cash and/or shares
of Common Stock equal in value to the excess of the Fair
Market Value of one Share on the date of exercise of the SAR
over the reference price per share of Common Stock established
on the date the SAR was granted.
2.25 "Stock Option" or "Option" means the right to
purchase shares of Common Stock (including a Replacement
Option) granted pursuant to Section VI of this Plan.
2.26 "Subsidiary" means any corporation, partnership,
joint venture, or other entity (i) of which the Company owns
or controls, directly or indirectly, 25% or more of the
outstanding voting stock (or comparable equity participation
and voting power) or (ii) which the Company otherwise controls
(by contract or any other means); except
<PAGE>
that when the term "Subsidiary" is used in the context of an
award of an Incentive Stock Option, the term shall have the
same meaning given to it in the Code. "Control" means the
power to direct or cause the direction of the management and
policies of a corporation or other entity.
2.27 "Transfer" means alienation, attachment, sale,
assignment, pledge, encumbrance, charge or other disposition;
and the terms "Transferred" or "Transferable" have
corresponding meanings.
SECTION III.
ADMINISTRATION
3.1 The Committee. This Plan shall be administered
and interpreted by the Committee.
3.2 Awards. The Committee shall have full authority
to grant, pursuant to the terms of this Plan, to Eligible
Employees: (i) Stock Options, (ii) Stock Appreciation Rights,
(iii) Restricted Stock, (iv) Unrestricted Stock and (v)
Performance Awards. In particular, the Committee shall have
the authority:
(a) to select the Eligible Employees to whom Awards
may be granted;
(b) to determine the types and combinations of Awards
to be granted to Eligible Employees;
(c) to determine the number of Shares or monetary
units which may be subject to each Award;
(d) to determine the terms and conditions, not
inconsistent with the terms of this Plan, of any
Award (including, but not limited to, any
restriction or limitation on transfer, any vesting
schedule or acceleration, or any forfeiture
provisions or waiver, regarding any Award) and the
related Shares, based on such factors as the
Committee shall determine; and
(e) to modify or waive any restrictions or limitations
contained in, and grant extensions to the terms of
or accelerate the vestings of, any outstanding
Awards as long as such modifications, waivers,
extensions or accelerations are not inconsistent
with the terms of this Plan, but no such changes
shall impair the rights of any Participant without
his or her consent.
<PAGE>
3.3 Guidelines. The Committee shall have the
authority to adopt, alter and repeal administrative rules,
guidelines and practices governing this Plan and perform all
acts, including the delegation of its administrative
responsibilities, as it deems advisable; to construe and
interpret the terms and provisions of this Plan and any Award
issued under this Plan; and to otherwise supervise the
administration of this Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in
this Plan or in any related Award Agreement in the manner and
to the extent it deems necessary to carry this Plan into
effect.
3.4 Delegation of Authority. The Committee may
delegate to one or more Officers of the Company the authority
of the Committee under Section 3.2 (except in respect of
Awards to Officers) and may delegate its administrative duties
to one or more individuals who are Officers or employees of
the Company.
3.5 Decisions Final. Any action, decision,
interpretation or determination by or at the direction of the
Committee concerning the application or administration of this
Plan shall be final and binding upon all persons and need not
be uniform with respect to its determination of recipients,
amount, timing, form, terms or provisions of Awards.
SECTION IV.
SHARES SUBJECT TO PLAN
4.1 Shares. Subject to adjustment as provided in
Subsection 4.2, the aggregate number of Shares which may be
issued under this Plan shall not exceed fifteen million
(15,000,000) Shares. If any Award granted under this Plan
shall expire, terminate or be canceled for any reason without
having been exercised in full, the number of unacquired Shares
subject to such Award shall again be available for future
grants; provided, however, that the reuse of such Shares is
not prohibited under Rule 16b-3.
4.2 Adjustment Provisions.
(a) If the Company shall at any time change the number
of issued Shares without new consideration to the
Company (such as by stock dividend, stock split,
recapitalization, reorganization, exchange of
shares, liquidation, combination or other change
in corporate structure affecting the Shares) or
make a distribution of cash or property which has
a substantial impact on the value of issued
Shares, the total number of Shares reserved for
issuance under the Plan shall be appropiately
adjusted and the number of Shares
<PAGE>
covered by each outstanding Award and the
reference price or Fair Market Value for each
outstanding Award shall be adjusted so that the
aggregate consideration payable to the Company and
the value of each such Award shall not be changed.
(b) Notwithstanding any other provision of the Plan,
and without affecting the number of Shares
reserved or available hereunder, the Committee may
authorize the issuance, continuation or assumption
of Awards or provide for other equitable
adjustments after changes in the Shares resulting
from any merger, consolidation, sale of assets,
acquisition of property or stock,
recapitalization, reorganization or similar
occurrence in which the Company is the continuing
or surviving corporation, upon such terms and
conditions as it may deem equitable and
appropriate.
4.3 Dissolution or Liquidation. In the event of the
dissolution or liquidation of the Company or any merger,
consolidation or combination in which the Company is not the
surviving corporation or in which the outstanding Shares of
the Company are converted into cash, other securities or other
property, each outstanding Award shall terminate as of a date
fixed by the Committee, provided that not less than 20 days'
written notice of the date of expiration shall be given to
each holder of an Award and each such holder shall have the
right during such period following notice to exercise the
Award as to all or any part of the Shares for which it is
exercisable at the time of such notice.
SECTION V.
EFFECTIVE DATE OF AMENDED PLAN
This Plan was amended and restated by the Board on March
25, 1992 and shall become effective, as amended, upon its
approval by the holders of a majority of the shares of Common
Stock represented, in person or by proxy, at the Company's
Annual Meeting of Shareholders on May 14, 1992. This Plan
shall continue in effect until December 31, 2015 unless
terminated sooner by the Board pursuant to Section XII.
SECTION VI.
STOCK OPTIONS
6.1 Grants. Stock options may be granted alone or in
addition to other Awards granted under this Plan. Each Option
granted shall be designated as either a Non-Qualified Stock
Option or an Incentive Stock Option and in each case such
<PAGE>
Option may or may not include Stock Appreciation Rights. One
or more Stock Options and/or Stock Appreciation Rights may be
granted to any Eligible Employee, except that no person shall
receive during any twelve month period Stock Options and Stock
Appreciation Rights covering more than 300,000 shares of
Common Stock.
6.2 Incentive Stock Options.
(a) Award Agreement. Any Award Agreement relating to
an Incentive Stock Option shall contain such terms
and conditions as are required for the Option to
be an "incentive stock option" as that term is
defined in Section 422 of the Code.
(b) Ten Percent Shareholder. An Incentive Stock
Option shall not be awarded to any person who, at
the time of the Award, owns Shares possessing more
than 10% of the total combined voting power of all
classes of stock of the Company or its
Subsidiaries.
(c) Qualification under the Code. Notwithstanding
anything in this Plan to the contrary, no term of
this Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor
shall any discretion or authority granted under
this Plan be exercised, so as to disqualify this
Plan under Section 422 of the Code, or, without
the consent of the Participants affected, to
disqualify any Incentive Stock Option under
Section 422 of the Code.
6.3 Replacement Options. The Committee may provide
either at the time of grant or subsequently that an Option
shall include the right to acquire a Replacement Option upon
the exercise of such Option (in whole or in part) prior to
Participant's termination of employment if the payment of the
Option Price is paid in Shares. In addition to any other
terms and conditions the Committee deems appropriate, the
Replacement Option shall be subject to the following terms:
(i) the number of Shares subject to the
Replacement Option shall not exceed the
number of whole Shares used to satisfy the
Option Price of the original Option and
the number of whole Shares, if any,
withheld by the Company as payment for
withholding taxes in accordance with
Subsection 13.3;
(ii) the Replacement Option Grant Date will be
the date of the exercise of the original
Option;
<PAGE>
(iii) the Option Price per share shall be the
Fair Market Value of a Share on the
Replacement Option Grant Date;
(iv) the Replacement Option shall be
exercisable no earlier than one year after
the Replacement Option Grant Date;
(v) the Term of the Replacement Option will
not extend beyond the Term of the original
Option; and
(vi) the Replacement Option shall be a
Non-Qualified Stock Option and shall
otherwise meet all conditions of this
Subsection 6.3.
The Committee may without the consent of the Participant
rescind the right to receive a Replacement Option at any time
prior to an Option being exercised.
6.4 Terms of Options. Except as otherwise required by
Subsections 6.2, 6.3 and 6.5, Options granted under this Plan
shall be subject to the following terms and conditions and
shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as
the Committee shall deem desirable:
(a) Option Price. The Option Price per share of
Common Stock purchasable under a Stock Option
shall be determined by the Committee at the time
of grant, except that no Incentive Stock Option
may be granted for an Option Price less than 100%
of Fair Market Value on the Grant Date.
(b) Option Term. The Term of each Stock Option shall
be fixed by the Committee, but no Incentive Stock
Option shall be exercisable more than ten years
after its Award Date, and no Non-Qualified Stock
Option shall be exercisable more than 20 years
after its Award Date.
(c) Exercisability. Stock Options shall be
exercisable at such time or times and subject to
such terms and conditions as shall be determined
by the Committee; provided, however, that Options
may not be exercised as to less than 100 Shares at
any time unless the number exercised is the total
number available for exercise at that time under
the terms of the Option.
(d) Method of Exercise. Stock Options may be
exercised in whole or in part at any time during
the Option Term, by giving written notice of
<PAGE>
exercise to the Company specifying the number of
Shares to be purchased. Such notice shall be
accompanied by payment in full of the Option Price
in such form as the Committee may accept. If and
to the extent determined by the Committee at or
after grant, payment in full or in part may also
be made in the form of Common Stock owned by the
Participant for at least six months prior to
exercise or by reduction in the number of Shares
issuable upon exercise based, in each case, on the
Fair Market Value of the Common Stock on the
payment date.
(e) Non-Transferability of Options. Stock Options
shall be Transferable only to the extent provided
in Section X of this Plan.
(f) Termination. Stock Options shall terminate in
accordance with Section XI of this Plan.
(g) Buyout and Settlement Provisions. The Committee
may at any time offer to buy out an Option
previously granted, based on such terms and
conditions as the Committee shall establish. The
Committee may also substitute new Stock Options
for previously granted Stock Options having higher
Option Prices than the new Stock Options being
substituted therefor.
6.5 Award of Options to Non-Employee Directors.
(a) Grants. The Company shall make the following
grants of Stock Options to non-employee directors
under this Plan:
(i) On the date on which a person who is not a
full-time employee of the Company or a
Subsidiary first becomes a director of the
Company (a "non-employee director"),
whether by election or appointment, that
non-employee director shall automatically
be granted Non-Qualified Stock Options for
10,000 Shares.
(ii) Each non-employee director who has served
on the Board at least six months shall
automatically receive a grant of Non-
Qualified Stock Options for 10,000 Shares.
The award shall be made on the same date
on which the Committee decides the total
number of stock options to be granted to
employees in connection with the Company's
annual total compensation review."
<PAGE>
(b) Terms and Conditions of Options Granted to Non-Employee
Directors.
(i) Term. The Term of all Options shall be
20 years from the Award Date of the
Option.
(ii) Option Price. The Option Price of all
Options shall be the Fair Market Value of
a Share on the Award Date.
(iii) Vesting. All Options shall vest over a
ten year period with 9% of the Option
Shares immediately exercisable on the
Award Date and an additional 9%
exercisable on each anniversary of the
Award Date thereafter until the tenth
anniversary when the remaining 10% of the
Option Shares shall be exercisable.
(iv) Method of Exercise. All Options shall be
exercisable in the manner provided in
Subsection 6.4(d) except that, without
further action by the Committee,
non-employee directors may make payment of
the Option Price by the delivery of Shares
owned by the director for at least six
months prior to exercise or by a reduction
in the number of Shares issuable upon such
exercise, and such directors may also use
the provisions of Subsection 13.3.
(v) Non-transferability and Termination. All
Options shall be Transferable only to the
extent provided in Section X of this Plan
and shall terminate in accordance with
Section XI of this Plan, except that the
timing provisions of Subsections 11.1(b)
and 11.1(c) may not be varied by Committee
determination.
(c) Amendment. Notwithstanding any other provision of
this Plan, the provisions of this Subsection 6.5
may not be amended by the Board more frequently
than once every six months other than to comply
with changes in the Code or the rules thereunder.
<PAGE>
SECTION VII.
STOCK APPRECIATION RIGHTS
7.1 Grant. A Stock Appreciation Right may be granted
either with or without reference to all or any part of a Stock
Option. A "Tandem SAR" means an SAR granted with reference to
a Stock Option (the "Reference Option"). A "Non-Tandem SAR"
means an SAR granted without reference to a Stock Option. If
the Reference Option is a Non-Qualified Stock Option, a Tandem
SAR may be granted at or after the date of the Reference
Option; if the Reference Option is an Incentive Stock Option,
the Grant Date of a Tandem SAR must be the same as the Grant
Date of the Reference Option. Any SAR shall have such terms
and conditions, not inconsistent with this Plan, as are
established by the Committee in connection with the Award.
7.2 Term. A Tandem SAR shall terminate and no longer
be exercisable upon the termination of its Reference Option.
A Non-Tandem SAR may have a term no longer than 20 years from
its Grant Date.
7.3 Exercise. A Tandem SAR may only be exercisable at
the times and, in whole or in part, to the extent that its
Reference Option is exercisable. The exercise of a Tandem SAR
shall automatically result in the surrender of the applicable
portion of its Reference Option. A Non-Tandem SAR shall be
exercisable in whole or in part as provided in its Award
Agreement. Written notice of any exercise must be given in
the form prescribed by the Committee.
7.4 Payment. For purposes of payment of an SAR, the
reference price per Share shall be the Option Price of the
Reference Option in the case of a Tandem SAR and shall be the
Fair Market Value of a Share on the Grant Date in the case of
a Non-Tandem SAR. The Committee shall determine the form of
payment.
7.5 Non-Transferability and Termination. Stock
Appreciation Rights shall be Transferable only to the extent
provided in Section X of this Plan and shall terminate in
accordance with Section XI of this Plan.
SECTION VIII.
RESTRICTED AND UNRESTRICTED STOCK AWARDS
8.1 Grants of Restricted Stock Awards. The Committee
may, in its discretion, grant one or more Restricted Stock
Awards to any Eligible Employee. Each Restricted Stock Award
shall specify the number of Shares to be issued to the
Participant, the date of such issuance, the price, if any, to
be paid for such Shares by the Participant and the
restrictions imposed on such Shares. The Committee may grant
<PAGE>
Awards of Restricted Stock subject to the attainment of
specified performance goals, continued employment or such
other limitations or restrictions as the Committee may
determine.
8.2 Terms and Conditions of Restricted Awards.
Restricted Stock Awards shall be subject to the following
provisions:
(a) Issuance of Shares. Shares of Restricted Stock
may be issued immediately upon grant or upon
vesting as determined by the Committee.
(b) Stock Powers and Custody. If shares of Restricted
Stock are issued immediately upon grant, the
Committee may require the Participant to deliver a
duly signed stock power, endorsed in blank,
relating to the Restricted Stock covered by such
an Award. The Committee may also require that the
stock certificates evidencing such shares be held
in custody by the Company until the restrictions
on them shall have lapsed.
(c) Shareholder Rights. Unless otherwise determined
by the Committee at the time of grant,
Participants receiving Restricted Stock Awards
shall not be entitled to dividend or voting rights
for the Restricted Shares until they are fully
vested.
8.3 Unrestricted Stock Awards. The Committee may make
awards of unrestricted Common Stock to key Eligible Employees
in recognition of outstanding achievements by such employees.
Unrestricted Shares issued on a bonus basis under this
Subsection 8.3 may be issued for no cash consideration. Each
certificate for unrestricted Common Stock shall be registered
in the name of the Participant and delivered immediately to
the Participant.
SECTION IX.
PERFORMANCE AWARDS
9.1 Performance Awards.
(a) Grant. The Committee may, in its discretion,
grant Performance Awards to Eligible Employees.
A Performance Award shall consist of the right to
receive either (i) Common Stock or cash of an
equivalent value, or a combination of both, at the
end of a specified Performance Period (defined
below) or (ii) a fixed dollar amount payable in
cash or Shares, or a combination of both, at the
end of a specified Performance
<PAGE>
Period. The Committee shall determine the
Eligible Employees to whom and the time or times
at which Performance Awards shall be granted, the
number of Shares or the amount of cash to be
awarded to any person, the duration of the period
(the "Performance Period") during which, and the
conditions under which, a Participant's
Performance Award will vest, and the other terms
and conditions of the Performance Award in
addition to those set forth in Subsection 9.2.
(b) Criteria for Award. The Committee may condition
the grant or vesting of a Performance Award upon
the attainment of specified performance goals; the
appreciation in the Fair Market Value, book value
or other measure of value of the Common Stock; the
performance of the Company based on earnings or
cash flow; or such other factors or criteria as
the Committee shall determine.
9.2 Terms and Conditions of Performance Awards.
Performance Awards granted pursuant to this Section IX shall
be subject to the following terms and conditions:
(a) Dividends. Unless otherwise determined by the
Committee at the time of the grant of the Award,
amounts equal to any dividends declared during the
Performance Period with respect to any Shares
covered by a Performance Award will not be paid to
the Participant.
(b) Payment. Subject to the provisions of the Award
Agreement and this Plan, at the expiration of the
Performance Period, share certificates, cash or
both (as the Committee may determine) shall be
delivered to the Participant, or his or her legal
representative or guardian, in a number or an
amount equal to the vested portion of the
Performance Award.
(c) Non-Transferability. Performance Awards shall not
be Transferable except in accordance with the
provisions of Section X of this Plan.
(d) Termination of Employment. Subject to the
applicable provisions of the Award Agreement and
this Plan, upon termination of a Participant's
employment with the Company or a Subsidiary for
any reason during the Performance Period for a
given Award, the Performance Award in question
will vest or be forfeited in accordance with the
terms and conditions established by the Committee.
<PAGE>
SECTION X.
NON-TRANSFERABILITY OF AWARDS
No Award or benefit payable under this Plan shall be
Transferable by the Participant during his or her lifetime and
may not be assigned, exchanged, pledged, transferred or
otherwise encumbered or disposed of except by a domestic
relations order pursuant to Section 414(p)(1)(B) of the Code,
or by will or the laws of descent and distribution. Awards
shall be exercisable during a Participant's lifetime only by
the Participant or by the Participant's guardian or legal
representative.
SECTION XI.
TERMINATION OF AWARDS
11.1 All Awards issued under this Plan shall terminate
as follows:
(a) Termination at Expiration of Term. During any
period of continuous employment with the Company
or a Subsidiary, an Award will be terminated only
if it is fully exercised or if it has expired by
its terms. For purposes of this Plan, any leave
of absence approved by the Company shall not be
deemed to be a termination of employment.
(b) Termination by Death, Disability or Retirement.
If a Participant's employment by the Company or a
Subsidiary terminates by reason of death,
Disability or Retirement, any Award held by such
Participant, unless otherwise determined by the
Committee at grant, shall be fully vested and may
thereafter be exercised by the Participant or by
the Participant's beneficiary or legal
representative, for a period of one year (or such
longer period as the Committee may specify at or
after grant) from the date of such death,
Disability or Retirement or until the expiration
of the stated term of such Award, whichever period
is shorter.
(c) Other Termination. Unless otherwise determined by
the Committee at or after grant, if a
Participant's employment by the Company or a
Subsidiary terminates for any reason other than
death, Disability or Retirement, the Award will
terminate on the earlier to occur of the stated
expiration date or 90 calendar days after
termination of employment. If a Participant dies
during the 90 day period following termination of
employment, any unexercised Award held by the
Participant shall be exercisable, to the full
<PAGE>
extent that such Award was exercisable at the time
of death, for a period of 90 calendar days from
the date of death or until the expiration of the
stated term of the Award, whichever occurs first.
11.2 Acceleration of Vesting and Extension of Exercise
Period Upon Termination.
(a) Notwithstanding anything contained in this Section
XI, upon the termination of employment of a
Participant who is not an Officer or Director of
the Company, for reasons other than death,
Disability or Retirement, either the Committee or
the President of the Company may, in its or his
sole discretion, accelerate the vesting of all or
part of any Awards held by such terminated
Participant so that such Awards are fully or
partially exercisable as of the date of
termination, and may also extend the permitted
exercise period of such Awards for up to five
years from the date of termination, but in no
event longer than the original expiration date of
such Award. In the case of a terminated
Participant who is an Officer, such discretion
shall be exercised, if at all, only by the
Committee.
(b) Except as provided in Subsection 4.2, in no event
will the continuation of the exercisability of an
Award beyond the date of termination of employment
allow the Eligible Employee, or his or her
beneficiaries or heirs, to accrue additional
rights under the Plan, or to purchase more Shares
through the exercise of an Award than could have
been purchased on the date that employment was
terminated.
SECTION XII.
TERMINATION OR AMENDMENT OF THIS PLAN
12.1 Termination or Amendment. The Board may at any
time, amend, in whole or in part, any or all of the provisions
of this Plan, or suspend or terminate it entirely; provided,
however, that, unless otherwise required by law, the rights of
a Participant with respect to any Awards granted prior to such
amendment, suspension or termination may not be impaired
without the consent of such Participant; and, provided
further, no amendment may be made, with or without shareholder
approval, which would cause this Plan to lose its exemption
under Rule 16b-3 and no amendment may be made without
shareholder approval which would increase the number of shares
available under this Plan.
<PAGE>
SECTION XIII.
GENERAL PROVISIONS
13.1 No Right to Continued Employment. Neither the
establishment of the Plan nor the granting of any Award
hereunder shall confer upon any Participant any right to
continue in the employ of the Company or any Subsidiary or
interfere in any way with the right of the Company or any
Subsidiary to terminate such employment at any time.
13.2 Other Plans. In no event shall the value of, or
income arising from, any Awards issued under this Plan be
treated as compensation for purposes of any pension, profit
sharing, life insurance, disability or other retirement or
welfare benefit plan now maintained or hereafter adopted by
the Company or any Subsidiary, unless such plan specifically
provides to the contrary.
13.3 Withholding of Taxes. The Company shall have the
right to deduct from any payment to be made pursuant to this
Plan, or to otherwise require, prior to the issuance or
delivery of any Shares or the payment of any cash to a
Participant, payment by the Participant of any Federal, state,
local or foreign taxes required by law to be withheld. The
Committee may permit any such withholding obligation to be
satisfied by reducing the number of Shares otherwise
deliverable or by accepting the delivery of previously owned
Shares. Any fraction of a Share required to satisfy such tax
obligations shall be disregarded and the amount due shall be
paid instead in cash by the Participant.
13.4 Reimbursement of Taxes. The Committee may provide
in its discretion that the Company may reimburse a Participant
for federal, state, local and foreign tax obligations incurred
as a result of the grant or exercise of an Award issued under
this Plan.
13.5 Governing Law. This Plan and actions taken in
connection with it shall be governed by the laws of the State
of New Jersey, without regard to the principles of conflict of
laws.
13.6 Liability. No employee of the Company nor member
of the Committee or the Board shall be liable for any action
or determination taken or made in good faith with respect to
the Plan or any Award granted hereunder and, to the fullest
extent permitted by law, all employees and members shall be
indemnified by the Company for any liability and expenses
which may occur through any claim or cause of action arising
under or in connection with this Plan or any Awards granted
under this Plan.
<PAGE>
Exhibit 10-F
AMENDED AND RESTATED
CHIQUITA BRANDS INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
Effective as of January 1, 1992
(as amended through May 30, 1995)
<PAGE>
Amended and Restated
Chiquita Brands International, Inc.
Deferred Compensation Plan
TABLE OF CONTENTS
Section Page
1.0 Establishment and Purpose . . . . . . . . . . . . . . . 1
2.0 Plan Objectives . . . . . . . . . . . . . . . . . . . . 1
3.0 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
4.0 Eligibility . . . . . . . . . . . . . . . . . . . . . . 3
5.0 Participation . . . . . . . . . . . . . . . . . . . . . 3
6.0 Deferred Compensation Account . . . . . . . . . . . . . 3
7.0 Deferral Sources and Matching Contributions . . . . . . 3
8.0 Deferral Term . . . . . . . . . . . . . . . . . . . . . 4
9.0 Investment Indices . . . . . . . . . . . . . . . . . . . 4
10.0 Payment Form and Method . . . . . . . . . . . . . . . . 5
11.0 Account Statement . . . . . . . . . . . . . . . . . . . 6
12.0 Account Distribution . . . . . . . . . . . . . . . . . . 6
13.0 Hardship Distributions . . . . . . . . . . . . . . . . . 7
14.0 Beneficiary Designation . . . . . . . . . . . . . . . . 7
15.0 General Provisions . . . . . . . . . . . . . . . . . . . 8
<PAGE>
Amended and Restated
Chiquita Brands International, Inc.
Deferred Compensation Plan
(as amended through May 30, 1995)
1.0 Establishment and Purpose
1.1 Effective January 1, 1992, Chiquita Brands
International, Inc., a New Jersey corporation, adopts
this Amended and Restated Chiquita Brands
International, Inc. Deferred Compensation Plan to
enable eligible Associates of the Company and its
subsidiaries and affiliates to elect deferral of
payment of their compensation.
2.0 Plan Objectives
2.1 The purpose of this Plan is to achieve the following
objectives:
(a) Maximize Chiquita Savings and Investment Plan
contributions;
(b) Receive full Company matching contributions on
Excess 401(k) Deferrals;
(c) Accumulate income for retirement; and
(d) Provide opportunity for financial growth.
3.0 Definitions
When used in this Plan, the following words and phrases
shall have the following meanings:
3.1 Account means the record maintained for each
Participant to which all deferrals, investment indices
and distributions are credited and debited for each
Plan Year.
3.2 Administrator means the Employee Benefits Committee
appointed by the Company's Board of Directors.
3.3 Annual Bonus means any direct lump-sum payment made in
addition to a Participant's Base Salary. Applicable
annual bonuses include (but are not limited to) the
Management Incentive Plan, Quality and Sales Incentive
Plan bonuses.
3.4 Associate means an employee of the Company.<PAGE>
3.5 Base Salary means base pay, excluding any bonuses,
commissions and other extraordinary payments.
3.6 Company means Chiquita Brands International, Inc. and
(unless the context indicates otherwise) its
subsidiaries and affiliates.
3.7 Compensation means Base Salary and Annual Bonus earned
for services rendered during a given Plan Year.
3.8 Disabled and Disability mean that a Participant, as a
result of accident or illness, is physically, mentally
or emotionally unable to perform the duties for which
the Participant is employed, and in the
Administrator's opinion is likely to remain so
Disabled for at least one year. The Administrator
shall make all determinations as to whether a
Participant is Disabled and shall use such evidence,
including independent medical reports and data, as the
Administrator deems necessary and desirable.
3.9 Excess 401(k) Deferral means the excess, if any, of
(i) the amount a Participant elects to defer under the
Chiquita Savings and Investment Plan, over (ii) the
limitation (as adjusted) on deferrals contained in
Section 402(g) of the Internal Revenue Code of 1986,
as amended.
3.10 Expiration Date means, with respect to each annual
deferral under Section 7.1, the earlier of (i) the
last day of the year to which a Participant elects to
defer Compensation pursuant to Section 8.1, or (ii)
the pay date for the payroll period in which a
Participant dies, becomes Disabled or terminates
employment with the Company.
3.11 Matching Contributions means, with respect to each
Participant in a Plan Year, Company contributions to
the Plan, in respect of the Participant's
contributions under Section 7.1, equal to the
difference, if any, between the following two amounts:
(i) the total of the Basic Matching Contribution,
Discretionary Matching Contribution and Stock
Incentive Matching Contribution (the "Contributions")
such Participant would have received for such Plan
Year under the Chiquita Savings and Investment Plan
(the "Savings Plan"), up to the 6% limit imposed by
the Savings Plan, if such Contributions were
determined without applying the limitations on
compensation and contributions in Sections 401(a)(17)
and 402(g) of the Internal Revenue Code of 1986, as
amended, and (ii) the actual Contributions on behalf<PAGE>
of such Participant under the Savings Plan for that
Plan Year.
3.12 Participant means an officer or other highly
compensated Associate who is selected or entitled to
participate and participates in the Plan for a
designated Plan Year.
3.13 Plan means this Amended and Restated Chiquita Brands
International, Inc. Deferred Compensation Plan.
3.14 Plan Year means the calendar year, January 1 through
December 31.
3.15 Prime Rate means the interest rate formally announced
by Provident Bank to be the lowest available at a
particular time to its most credit-worthy customers.
3.16 Stock means Chiquita Brands International, Inc.
Capital Stock, $.33 par value.
3.17 Stock Price means the average of the high and low
prices of the Stock on the New York Stock Exchange on
a given day.
4.0 Eligibility
4.1 Officers and other highly compensated Associates of
the Company will be eligible to become Participants in
the Plan either through annual invitation by the
President of the Company or through an employment
agreement approved by the President.
5.0 Participation
5.1 A Participant elects to participate in the Plan by
delivering to the Administrator, before the beginning
of each Plan Year, a properly completed enrollment
form.
5.2 The enrollment form shall conform to the terms and
conditions of the Plan.
6.0 Deferred Compensation Account
6.1 Each Plan Year a deferred compensation Account will be
established for each Participant.<PAGE>
6.2 All Compensation deferred by the Participant
(including all Excess 401(k) Deferrals), all increases
or decreases in the value of the Account resulting
from the investment index or indices chosen by the
Participant, all other amounts credited to the Account
pursuant to this Plan and all distributions from the
Account to the Participant or the Participant's
beneficiary(ies) or estate shall be reflected in the
Account.
6.3 All Accounts shall be maintained by the Administrator.
7.0 Deferral Sources and Matching Contributions
7.1 At the time of enrollment, a Participant must elect to
defer Compensation for services rendered in the next
Plan Year consisting, for the purposes of this Plan,
of one or more of the following three components:
Base Salary, Annual Bonus and Excess 401(k) Deferrals.
7.2 Any Base Salary deferral must be at least 10% of Base
Salary. Any Annual Bonus deferral must be at least
20% of each Annual Bonus or $10,000, whichever is
less.
7.3 Compensation deferred under this Plan and Excess
401(k) Deferrals shall be credited to the
Participant's Account on the date such amounts would
have otherwise been paid.
7.4 The deferral sources and amounts elected for a given
Plan Year are irrevocable.
7.5 If a Participant in this Plan has elected to
participate in the Savings Plan and has Excess 401(k)
Deferrals, the Company will make Matching
Contributions for that Participant in accordance with
Section 3.11.
8.0 Deferral Term
8.1 At the time a Participant elects to defer
Compensation, the Participant must also elect the term
for which such deferral is made (the "deferral term").
The deferral term for Base Salary or Annual Bonus
deferrals must be either a fixed number of years or
the date on which the Participant dies, becomes
Disabled or terminates employment with the Company for
any reason. The deferral term for all Excess 401(k)
Deferrals shall always end upon death, Disability or
termination of employment for any reason.<PAGE>
8.2 A deferral term that is for a fixed number of years
must be in full year increments.
8.3 The deferral terms for deferrals of Base Salary and
Annual Bonus may be elected separately and do not have
to be the same.
8.4 A deferral term, once elected, is irrevocable.
8.5 Should a Participant die, become Disabled or the
Participant's employment with the Company be
terminated for any reason before the Expiration Date
of a deferral term that is for a fixed number of
years, the Participant's Account will be distributed
as if the Participant had elected the death,
Disability or termination of employment deferral term.
9.0 Investment Indices
9.1 Upon enrollment for a given Plan Year, a Participant
must elect the manner in which the Participant's
deferrals made during that Plan Year are to be valued.
For each deferral source, as defined in Section 7.1, a
Participant may elect one or a proportional
combination of the following investment indices. The
exception to this is the Company's Matching
Contributions which shall always be valued using the
Stock Index.
9.1.1 Graduated Interest Index
(a) Prior to the Expiration Date, each deferral
amount shall be credited to the Account and
interest, accruing from the date on which any
amount is so credited to the Account, shall
be credited quarterly in accordance with the
Graduated Interest Rate Schedule for the
respective Plan Year.
9.1.2 Stock Index
(a) Prior to the Expiration Date, each deferral
and/or Company Matching Contribution shall be
credited to the Account. Each amount so
credited shall then be converted into units
equivalent to the number of shares of Stock
purchasable on the date on which the deferred
amount would otherwise have been paid, or the
date on which the Matching Contribution is
credited, based on the Stock Price for that
date.<PAGE>
(b) When a dividend is declared, the Account
shall be credited with an amount equivalent
to the dividend paid on the Stock. The total
dividend amount shall be calculated based on
the equivalent units in the Account on the
declaration date. The total dividend amount
shall then be converted into additional units
based on the Stock Price on the dividend
declaration date. Appropriate adjustments
shall also be made to the Account to reflect
any stock splits, stock dividends,
combinations or exchanges of shares or other
similar capital adjustments by the Company
relating to the Stock.
(c) The total value of the Account shall be based
on the Stock Price on any given date.
(d) In the event that the Stock ceases to be
traded on the New York Stock Exchange or the
Company is merged into or consolidated with
another entity, any Stock Index portion of a
Participant's Account shall be valued based
on the Stock Price on the last day the Stock
is actively traded on the New York Stock
Exchange. The resulting amount shall
thereafter be valued according to the
Graduated Interest Rate Schedule that
corresponds to the Plan Year in which the
principal amount was deferred. The deferral
term will remain as initially designated.
9.2 An investment index election for deferrals in a given
Plan Year is irrevocable.
10.0 Payment Form and Method
10.1 All payments from the Plan shall be made only in the
form of cash.
10.2 At the time of enrollment for a given Plan Year, a
Participant shall elect the method of payment desired
upon the Expiration Date of the deferral term(s)
elected.
10.3 A Participant may choose either a lump sum or an equal
monthly installment payment method for any deferrals
of Compensation earned during any Plan Year prior to
1996. Only lump sum payments will be available (and
installment payments will not be available) for any
deferrals of Compensation earned on or after January
1, 1996.<PAGE>
10.4 The payment method elected shall cover all deferral
terms, from all deferral sources, for the respective
Plan Year.
10.5 Should a Participant elect equal monthly installments,
the Participant must elect at the time of enrollment
the length of time over which installments are to be
received.
10.6 The payment method and the installment period elected
for deferrals in a given Plan Year are irrevocable.
11.0 Account Statement
11.1 Account statements will be sent periodically (at least
annually) to each Participant until the Participant's
Account has been completely distributed.
11.2 The Stock Price on the last business day of each
quarter will be used for valuing the units accrued
pursuant to Section 9.1.2 and valued using the Stock
Index method.
11.3 The appropriate Graduated Interest Rate Schedules will
be used for crediting the deferrals accrued pursuant
to Section 9.1.1 and valued using the Graduated
Interest Index method.
12.0 Account Distribution
12.1 Payment will begin on the first payroll day of the
month which first follows a 30-day processing period
beginning on the Expiration Date. For lump sum
payments no interest or credits will accrue during the
30-day processing period. For installment payments,
interest will accrue at the Prime Rate during the 30-
day processing period.
12.2 Applicable federal, state, local and foreign taxes
will be deducted from the gross amount of the payment.
12.3 Equal monthly installments shall be at least $1,000.
The Administrator, therefore, shall have the right to
reduce the length of the installment period to that
which provides an equal monthly installment of at
least $1,000.
12.4 The ongoing processing of an equal installment
distribution shall be as follows:<PAGE>
12.4.1 The Participant's Account shall no longer be
valued based on the Graduated Interest Index or
Stock Index.
12.4.2 Interest shall be credited quarterly throughout
the distribution period, based on the quarter-end
Prime Rate, for both Graduated Interest Index and
Stock Index balances.
12.4.3 The Administrator may accelerate payment of any
amount remaining in the Account to the extent
that the amounts being paid are not sufficiently
large enough to warrant the administrative
expense being incurred.
13.0 Hardship Distributions
13.1 Distribution of payments from a Participant's Account
prior to the Expiration Date shall be made only if the
Administrator, after consideration of a written
application by the Participant, determines that the
Participant has sustained financial hardship.
13.2 A Participant who is subject to the provisions of
Section 16 of the Securities Exchange Act of 1934 is
not eligible to receive a hardship distribution from
any funds that are valued using the Stock Index.
13.3 Any hardship distribution shall be withdrawn from the
Participant's Account starting with the most current
Plan Year, continuing in reverse chronological order.
13.4 Applicable federal, state, local and foreign taxes
will be deducted from the gross amount of the payment.
14.0 Beneficiary Designation
14.1 A Participant shall have the right to designate one or
more beneficiaries and to change any beneficiary
previously designated.
14.2 A Participant shall submit his or her beneficiary
designation in writing using the beneficiary
designation portion of the enrollment form. The
Participant shall deliver the completed form to the
Administrator.
14.3 The most recently dated and filed beneficiary
designation shall cancel all prior designations.<PAGE>
14.4 In the event of the Participant's death before or
after the commencement of payments from the Account,
the amount otherwise payable to the Participant shall
be paid to the designated beneficiary(ies) or, if no
beneficiary, to the estate, according to the
provisions of Section 12.0, as applicable.
15.0 General Provisions
15.1 Participant's Rights Unsecured. The right of any
Participant to receive payments under the provisions
of this Plan shall be an unsecured claim against the
general assets of the Company. It is not required or
intended that the amounts credited to the
Participant's Account be segregated on the books of
the Company or be held by the Company in trust for a
Participant and a Participant shall not have any claim
to or against a specific asset or assets of the
Company. All credits to an Account are for
bookkeeping purposes only.
15.2 Non-assignability. The right to receive payments
shall not be transferrable or assignable by a
Participant. Any attempted assignment or alienation
of payments shall be void and of no force or effect.
15.3 Administration. The Administrator shall have the
authority to adopt rules, regulations and procedures
for carrying out this Plan, and shall interpret,
construe and implement the provisions of the Plan
according to the laws of the State of Ohio.
15.4 Amendment and Termination. The Company expressly
reserves the sole and exclusive right to amend,
modify, or terminate this Plan at any time by action
of the Board of Directors of the Company or, to the
extent it has delegated such authority, by action of
the Employee Benefits Committee. Any amendment,
modification, or termination shall be in a writing
authorized by the Board of Directors or the Employee
Benefits Committee, as the case may be, and signed by
an officer of the Company. The Company's right of
amendment, modification, or termination shall not
require the assent, concurrence, or any other action
by any subsidiary or affiliate of the Company even
though actions by the Company may relate to persons
employed by a subsidiary or affiliate. However, no
amendment, modification or termination of this Plan
shall adversely affect any Participant's accrued
rights arising from any election to defer Compensation
made prior to such amendment, modification or
termination of the Plan.<PAGE>
15.5 Construction. The singular shall also include the
plural where appropriate.
15.6 Employment Rights. This Plan does not constitute a
contract of employment and participation in the Plan
will not give any Participant the right to be retained
in the employ of the Company.
15.7 Annual Bonus Rights. This Plan does not confer the
right for a Participant to receive an Annual Bonus.<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC. EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
Year Ended December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
A. Primary earnings (loss) per
common share:
- - ------------------------------
Income (loss) from continuing operations $27,969 $(84,311) $(51,081) $(221,708) $110,909
Dividends on Series A preferred stock (8,266) (7,232) -- -- --
-------- -------- -------- -------- --------
Income (loss) from continuing operations
attributable to common shares 19,703 (91,543) (51,081) (221,708) 110,909
Discontinued operations (11,197) 35,611 -- (62,332) 17,586
-------- -------- -------- -------- --------
Income (loss) attributable to common
shares before extraordinary item 8,506 (55,932) (51,081) (284,040) 128,495
Extraordinary loss from debt refinancing (7,560) (22,840) -- -- --
-------- -------- -------- -------- --------
Net income (loss) attributable
to common shares $946 $(78,772) $(51,081) $(284,040) $128,495
======== ======== ======== ======== ========
Shares used in calculation of per share data:
Weighted average common and equivalent
Series C preference shares outstanding 53,647 52,033 51,427 51,804 47,834
Less restricted common shares (387) -- -- -- --
Dilutive effect of assumed exercise
of stock options and warrants 410 -- -- -- 2,548
-------- -------- -------- -------- --------
53,670 52,033 51,427 51,804 50,382
======== ======== ======== ======== ========
Primary earnings (loss) per common share:
- Continuing operations $.37 $(1.76) $(.99) $(4.28) $2.20
- Discontinued operations (.21) .69 -- (1.20) .35
- Extraordinary item (.14) (.44) -- -- --
-------- -------- -------- -------- --------
- Net income (loss) $.02 $(1.51) $(.99) $(5.48) $2.55
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC. EXHIBIT 11 (cont.)
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
Year Ended December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
B. Fully diluted earnings
(loss) per common share:
- - -----------------------------
Income (loss) from continuing operations $27,969 $(84,311) $(51,081) $(221,708) $110,909
Dividends on Series A preferred stock (8,266) (7,232) -- -- --
Additional income as a result of assumed
conversion of convertible debentures -- -- -- -- 4,836
-------- -------- -------- -------- ----------
Income (loss) from continuing operations
attributable to common shares 19,703 (91,543) (51,081) (221,708) 115,745
Discontinued operations (11,197) 35,611 -- (62,332) 17,586
-------- -------- -------- -------- ---------
Income (loss) attributable to common
shares before extraordinary item 8,506 (55,932) (51,081) (284,040) 133,331
Extraordinary loss from debt refinancing (7,560) (22,840) -- -- --
-------- -------- -------- -------- ---------
Net income (loss) attributable to
common shares $946 $(78,772) $(51,081) $(284,040) $133,331
======== ======== ======== ======== ========
Shares used in calculation of
per share data:
Weighted average common and
equivalent Series C preference
shares outstanding 53,647 52,033 51,427 51,804 47,834
Less restricted common shares (355) -- -- -- --
Dilutive effect of assumed exercise
of options and warrants and
assumed conversion of convertible
subordinated debentures 469 -- -- -- 5,078
-------- -------- -------- -------- ---------
53,761 52,033 51,427 51,804 52,912
======== ======== ======== ======== ========
Fully diluted earnings (loss)
per common share:
- Continuing operations $.37 $(1.76) $(.99) $(4.28) $2.19
- Discontinued operations (.21) .69 -- (1.20) .33
- Extraordinary item (.14) (.44) -- -- --
-------- -------- -------- -------- ---------
- Net income (loss) $.02 $(1.51) $(.99) $(5.48) $2.52
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 12
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(In thousands, except ratio amounts)
Year Ended December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing operations
before income taxes $41,869 $(70,811) $(39,081)$(216,708) $160,009
Interest expense 163,513 167,464 169,789 155,036 88,406
Portion of rentals representing interest cost 43,464 45,097 58,499 85,810 74,070
Amortization of capitalized interest 4,158 4,043 3,745 3,010 1,900
Undistributed share of income of less-than-
fifty percent owned investees (2,963) (4,110) (1,429) (3,588) (4,352)
-------- -------- -------- -------- --------
$250,041 $141,683 $191,523 $23,560 $320,033
======== ======== ======== ======== ========
Fixed Charges:
Interest expense $163,513 $167,464 $169,789 $155,036 $88,406
Capitalized interest 700 3,900 8,000 21,400 23,000
Portion of rentals representing interest cost 43,464 45,097 58,499 85,810 74,070
-------- -------- -------- -------- --------
$207,677 $216,461 $236,288 $262,246 $185,476
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.20 (a) (a) (a) 1.73
======== ========
Earnings $250,041 $141,683 $191,523 $23,560 $320,033
======== ======== ======== ======== ========
Fixed charges $207,677 $216,461 $236,288 $262,246 $185,476
Preferred stock dividends 8,266 10,961 4,278 778 --
-------- -------- -------- -------- --------
$215,943 $227,422 $240,566 $263,024 $185,476
======== ======== ======== ======== ========
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.16 (b) (b) (b) 1.73
======== ========
</TABLE>
(a) Fixed charges exceeded earnings by $74,778 in 1994, $44,765 in 1993 and
$238,686 in 1992.
(b) Combined fixed charges and preferred stock dividends exceeded earnings by
$85,739 in 1994, $49,043 in 1993 and $239,464 in 1992.
<PAGE>
FINANCIAL REPORT EXHIBIT 13
Statement of Management Responsibility
The financial information presented in this Annual Report is
the responsibility of Chiquita Brands International, Inc.
management, who believes that it presents fairly its consolidated
financial position and results of operations in accordance with
generally accepted accounting principles.
The Company's system of internal accounting controls, which is
supported by formal financial and administrative policies, is
designed to provide reasonable assurance that the financial
records are reliable for preparation of financial statements and
that assets are safeguarded against losses from unauthorized use
or disposition. Management reviews, modifies and improves these
systems and controls as changes occur in business conditions and
operations. The Company's worldwide internal audit function
reviews the adequacy and effectiveness of controls and compliance
with policies.
The Audit Committee of the Board of Directors reviews the
Company's financial statements, accounting policies and internal
controls. In performing its reviews, the Committee meets with
the independent auditors, management and internal auditors
periodically to discuss these matters.
The Company engages Ernst & Young LLP, an independent auditing
firm, to audit its financial statements and express an opinion
thereon. The scope of the audit is set by Ernst & Young LLP who
have full and free access to all Company records and personnel in
conducting their audits. Representatives of Ernst & Young LLP
are free to meet with the Audit Committee, with or without
members of management present, to discuss their audit work and
any other matters they believe should be brought to the attention
of the Committee.
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors and Shareholders of
Chiquita Brands International, Inc.
We have audited the accompanying consolidated balance sheets
of Chiquita Brands International, Inc. and subsidiary companies
as of December 31, 1995 and 1994, and the related consolidated
statements of income, shareholders' equity and cash flow for each
of the three years in the period ended December 31, 1995. These
financial statements, appearing on pages 10 through 22, are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Chiquita Brands International, Inc. and
subsidiary companies at December 31, 1995 and 1994 and the
consolidated results of their operations and their cash flow for
each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Cincinnati, Ohio
February 26, 1996
-5-
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
Chiquita Brands International, Inc. and Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
(In thousands, except per share amounts) 1995 1994 1993 1992 1991
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FINANCIAL CONDITION
Working capital $366,893 $230,434 $266,793 $482,338 $960,093
Capital expenditures 64,640 136,981 196,554 472,273 395,641
Total assets 2,623,533 2,774,239 2,722,824 2,873,699 2,937,344
Capitalization
Short-term debt 172,333 221,051 192,207 229,286 187,821
Long-term debt 1,242,046 1,364,836 1,438,378 1,411,319 1,202,839
Shareholders' equity 672,207 644,809 584,069 667,962 967,925
================================================================================================
OPERATIONS
Net sales $2,565,992 $2,505,826 $2,532,925 $2,723,250 $2,604,128
Operating income (loss) * 175,770 71,185 103,848 (96,588) 197,818
Income (loss) from
continuing operations 27,969 (84,311) (51,081) (221,708) 110,909
Discontinued operations (11,197) 35,611 -- (62,332) 17,586
Income (loss) before
extraordinary item 16,772 (48,700) (51,081) (284,040) 128,495
Net income (loss)* 9,212 (71,540) (51,081) (284,040) 128,495
================================================================================================
SHARE DATA
Average number of common
shares outstanding 53,670 52,033 51,427 51,804 50,382
Earnings (loss) per common share:
Primary
- Continuing operations $.37 $(1.76) $(.99) $(4.28) $2.20
- Discontinued operations (.21) .69 -- (1.20) .35
- Extraordinary item (.14) (.44) -- -- --
- Net income (loss) .02 (1.51) (.99) (5.48) 2.55
Fully diluted
- Continuing operations .37 (1.76) (.99) (4.28) 2.19
- Discontinued operations (.21) .69 -- (1.20) .33
- Extraordinary item (.14) (.44) -- -- --
- Net income (loss) .02 (1.51) (.99) (5.48) 2.52
Dividends per common share .20 .20 .44 .66 .55
Market price per common share:
High 18.00 19.25 17.50 40.13 50.63
Low 12.25 11.25 10.13 15.75 29.63
End of year 13.75 13.63 11.50 17.25 40.00
===================================================================================================
* See "Management's Analysis of Operations and Financial Condition" and Notes to Consolidated Financial
Statements for a discussion of significant items included in operating income in 1995, 1994 and 1993.
</TABLE>
-6-
<PAGE>
Management's Analysis of Operations and Financial Condition
Chiquita Brands International, Inc. and Subsidiary Companies
Operations
Sales increased 2% in 1995 to approximately $2.6 billion
primarily as a result of higher fresh fruit prices. Operating
income for the year increased to $176 million from $71 million in
1994. Operating income includes:
- in 1995, a net gain of $19 million primarily resulting from
divestitures of operations and other actions taken as part
of the Company s ongoing program to improve shareholder
value. These divestitures and other actions included sales
of older ships, the sale of the Costa Rican operations of
Chiquita s Numar edible oils group, the shut-down of a
portion of the Company s juice operations and the
reconfiguration of banana production assets.
- in 1994, charges and losses of $67 million resulting
primarily from farm closings and write-downs of banana
cultivations following a strike in Honduras, and the
substantial reduction of the Company's Japanese "green"
banana trading operations.
In addition to the effects of the items described above, 1995
operating income increased from 1994 due to higher banana prices
outside the European Union ("EU"), the favorable effect of
changes in foreign exchange rates on European sales and earnings
improvements from other food products. These favorable effects
were partially offset by higher banana operating costs resulting
from the implementation of the banana Framework Agreement between
the EU, Colombia and Costa Rica, higher paper costs, and lower EU
banana prices late in the year. These lower EU prices, which
continued into early 1996, were brought about by the over
issuance of special import licenses to European-based banana
companies as relief for hurricane damage sustained in the
Caribbean.
Operating income for 1994 was $33 million lower than for 1993
primarily due to the charges and losses described above as well
as higher costs which were incurred to replace Honduran banana
volume that was curtailed following the strike.
Net interest expense decreased in both 1995 and 1994 as a
result of debt refinancing and reduction activities and, in 1995,
higher average yields on investments. Net income of $9 million
in 1995 and the net loss of $72 million in 1994 include
extraordinary charges of $8 million and $23 million,
respectively, resulting from refinancings and prepayments of
debt.
<PAGE>
Income taxes consist principally of foreign income taxes
currently paid or payable. No tax benefit was recorded for
unrealized U.S. net operating loss carryforwards or other
available tax credits.
In February 1996, heavy rainfall caused significant flooding
in Costa Rica. Banana industry cultivations in the region,
including Chiquita's, were damaged and banana industry production
in Costa Rica has been reduced. The Company estimates that less
than 5% of its total Latin American banana cultivations sustained
varying degrees of damage from the flooding.
International Operations
Chiquita's products are distributed in more than 40 countries.
Its international sales are made primarily in U.S. dollars and
major European currencies. The Company manages currency exchange
risks from sales originating in currencies other than the dollar
generally by exchanging local currencies for dollars immediately
upon receipt, and by engaging from time to time in various
hedging activities. Debt denominated in currencies other than
the U.S. dollar serves as a hedge of the net investments in those
respective countries. In addition, various hedging activities
are used to offset currency exchange movements on firm
commitments and other transactions where the potential for loss
exists. At December 31, 1995, the Company had foreign exchange
forward contracts and options to ensure conversion of
approximately $320 million of foreign sales in 1996 at a rate not
higher than 1.45 Deutsche marks per U.S. dollar. (See Note 8 of
the Consolidated Financial Statements for additional discussion
of the Company's hedging activities.)
-7-
On July 1, 1993, the EU implemented a new quota effectively
restricting the volume of Latin American bananas imported into
the EU, which had the effect of decreasing the Company's volume
and market share in Europe. The quota is administered through a
licensing system and grants preferred status to producers and
importers within the EU and its former colonies, while imposing
quotas and tariffs on bananas imported from other sources,
including Latin America, Chiquita's primary source of fruit.
Since imposition of the EU quota regime, prices within the EU
have increased to a higher level than the levels prevailing prior
to the quota. Banana prices in other worldwide markets, however,
have been lower than in years prior to the EU quota, as the
displaced EU volume has entered those markets. In two separate
rulings, General Agreement on Tariffs and Trade ("GATT") panels
found this banana policy to be illegal. In March 1994, four of
the countries which had filed GATT actions against the EU banana
policy (Costa Rica, Colombia, Nicaragua and Venezuela) reached a
settlement with the EU by signing a "Framework Agreement." The
Framework Agreement authorizes the imposition of additional
restrictive and discriminatory quotas and export licenses on U.S.
banana marketing firms, while leaving EU firms exempt. Costa
<PAGE>
Rica and Colombia implemented this agreement in 1995,
significantly increasing the Company's cost to export bananas
from these countries. Three additional European countries
(Sweden, Finland and Austria) joined the EU effective January 1,
1995. These countries, which had substantially unrestricted
banana markets in which the Company supplied a significant
portion of the bananas, are in the process of transition to the
restrictive EU quota and licensing environment. The timing and
exact nature of any adjustments in the quota and licensing
regulations that will be made for these new EU members have not
yet been determined. Implementation of the quota regime
continues to evolve, and there can be no assurance that the EU
banana regulation will not change further.
In September 1994, Chiquita and the Hawaii Banana Industry
Association made a joint filing with the Office of the U.S. Trade
Representative ("USTR") under Section 301 of the U.S. Trade Act
of 1974, charging that the EU quota and licensing regime and the
Framework Agreement are unreasonable, discriminatory, and a
burden and restriction on U.S. commerce. In response to this
petition, the U.S. Government initiated formal investigations of
the EU banana import policy and of the Colombian and Costa Rican
Framework Agreement export policies. In January 1995, the U.S.
Government announced a preliminary finding against the EU banana
import policy and in September 1995, based on information
obtained in the USTR's investigation under Section 301, the
United States, joined by Guatemala, Honduras and Mexico,
commenced a new international trade challenge against the EU
regime using the procedures of the World Trade Organization
("WTO"). In January 1996, the USTR announced that it had found
the banana Framework Agreement export policies of Costa Rica and
Colombia to be unfair. The USTR further announced it was not
imposing sanctions at that time, pending further consultations
with those countries to eliminate harm to U.S. commerce. In
early February 1996, Ecuador, the world s largest exporter of
bananas, joined the United States, Guatemala, Honduras and Mexico
in challenging the EU regime under the WTO. Both the WTO and
Section 301 authorize retaliatory measures, such as tariffs or
withdrawal of trade concessions, against the offending countries.
However, there can be no assurance as to the results of the WTO
and Section 301 proceedings, the nature and extent of actions
that may be taken by the United States or other adversely
affected countries, or the impact on the EU quota regime or the
Framework Agreement.
Discontinued Meat Operations
As described in Note 2 to the Consolidated Financial
Statements, the Company completed the sale of its meat operations
in December 1995 and has accounted for it as a discontinued
operation.
-8-
<PAGE>
Financial Condition
Cash flow from operations was $90 million, $73 million and $47
million in 1995, 1994 and 1993, respectively. At December 31,
1995, Chiquita had $311 million of cash and marketable
securities, including $40 million of restricted cash on deposit.
Capital expenditures were $65 million in 1995, $137 million in
1994 and $197 million in 1993, including $72 million in 1994 and
$144 million in 1993 of investment spending primarily for
transportation system improvements and fresh fruit production
capacity. During 1994, the Company completed its multi-year
investment spending program with the delivery of the last two
ships under construction. This program was the primary reason
for approximately $260 million in long-term subsidiary borrowings
during 1994 and 1993. As a result of this program, the Company s
free cash flow (the excess of earnings before depreciation and
amortization over capital expenditures) is greater than its
results of operations.
In accordance with its strategic program to improve
shareholder value by strengthening its balance sheet, enhancing
short-term liquidity, reducing overall borrowing costs and
positioning the Company for future cost reduction and
deleveraging opportunities, Chiquita:
- Sold its remaining meat operations to Smithfield Foods, Inc.
in December 1995 for approximately $60 million, including
$25 million in cash and 1.1 million shares of Smithfield
common stock. Smithfield's common stock is traded publicly
on NASDAQ. In 1994, the Company sold its specialty meat
operations for $53 million in cash and used the proceeds
primarily to reduce short-term borrowings of the Meat
Division.
- Sold the Costa Rican operations of its Numar edible oils
group in December 1995 for approximately $100 million,
including $50 million in cash and $50 million in secured
notes receivable.
- Sold older ships in 1995 for $90 million in cash and used
approximately $50 million of the proceeds to prepay the
related debt.
- Sold and leased back shipping containers in 1995 and 1994
which generated gross proceeds of $40 million and $32
million, respectively. Approximately $27 million and $20
million of related 9.8% debt was retired in 1995 and 1994,
respectively.
- Replaced $153 million of shipping related loans in 1995 with
loans having longer maturities totaling $187 million and
negotiated the extension of the maturities on another $23
million ship loan.
<PAGE>
- Used $36 million of restricted cash to repay related
subsidiary debt in December 1995.
- Raised approximately $310 million in a 1994 public offering
of 9 1/8% senior notes and preferred stock. The Company
used the proceeds of these offerings to redeem or repay
subordinated and subsidiary debt, including 11 7/8%
subordinated debentures, and 10 1/2% and 10 1/4%
subordinated debentures which carried effective interest
rates of 12.1% and 13.7%, respectively.
- Reduced the annual dividend rate on its capital stock in
mid-1993 from $.68 per share to $.20 per share.
-9-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
Chiquita Brands International, Inc. and Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
Year Ended December 31,
(In thousands, except per share amounts) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $2,565,992 $2,505,826 $2,532,925
- - ------------------------------------------------------------------------------------------------------------
Operating expenses
Cost of sales 1,958,063 1,996,179 1,993,552
Selling, general and administrative expenses 333,537 331,498 332,934
Depreciation 98,622 106,964 102,591
- - ------------------------------------------------------------------------------------------------------------
2,390,222 2,434,641 2,429,077
- - ------------------------------------------------------------------------------------------------------------
Operating income 175,770 71,185 103,848
Interest income 28,157 22,902 20,377
Interest expense (163,513) (167,464) (169,789)
Other income, net 1,455 2,566 6,483
- - ------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations
before income taxes 41,869 (70,811) (39,081)
Income taxes (13,900) (13,500) (12,000)
- - ------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations 27,969 (84,311) (51,081)
Discontinued operations (11,197) 35,611 --
- - ------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary item 16,772 (48,700) (51,081)
Extraordinary loss from debt refinancing (7,560) (22,840) --
- - ------------------------------------------------------------------------------------------------------------
Net income (loss) $9,212 $(71,540) $(51,081)
Less dividends on Series A preferred stock (8,266) (7,232) --
- - ------------------------------------------------------------------------------------------------------------
Net income (loss) attributable to common shares $946 $(78,772) $(51,081)
Per common share - primary and fully diluted
- Continuing operations $.37 $(1.76) $(.99)
- Discontinued operations (.21) .69 --
- Extraordinary item (.14) (.44) --
- Net income (loss) .02 (1.51) (.99)
=============================================================================================================
Weighted average number of common
shares outstanding 53,670 52,033 51,427
=============================================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
Chiquita Brands International, Inc. and Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
December 31,
(In thousands, except share amounts) 1995 1994
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and equivalents $236,675 $165,523
Marketable securities 34,743 --
Trade receivables, less allowances of $11,310 and $13,060, respectively 184,364 205,194
Other receivables, net 89,848 92,725
Inventories 293,379 308,549
Other current assets 37,827 32,334
- - ------------------------------------------------------------------------------------------------------------
Total current assets 876,836 804,325
Restricted cash 39,520 75,030
Net assets of discontinued operations -- 46,718
Property, plant and equipment, net 1,182,144 1,387,132
Investments and other assets 356,805 301,776
Intangibles, net 168,228 159,258
- - ------------------------------------------------------------------------------------------------------------
Total assets $2,623,533 $2,774,239
============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and loans payable $119,456 $130,040
Long-term debt due within one year 52,877 91,011
Accounts payable 206,717 232,535
Accrued liabilities 130,893 120,305
- - ------------------------------------------------------------------------------------------------------------
Total current liabilities 509,943 573,891
Long-term debt of parent company 840,925 840,377
Long-term debt of subsidiaries 401,121 524,459
Accrued pension and other employee benefits 85,514 74,855
Other liabilities 113,823 115,848
- - ------------------------------------------------------------------------------------------------------------
Total liabilities 1,951,326 2,129,430
============================================================================================================
Shareholders' equity
Preferred and preference stock 138,369 190,639
Capital stock, $.33 par value (54,769,140 and
49,300,881 shares outstanding, respectively) 18,256 16,434
Capital surplus 581,019 505,800
Accumulated deficit (65,437) (52,940)
Minimum pension liability adjustment -- (15,124)
- - ------------------------------------------------------------------------------------------------------------
Total shareholders' equity 672,207 644,809
============================================================================================================
Total liabilities and shareholders' equity $2,623,533 $2,774,239
============================================================================================================
<PAGE>
See Notes to Consolidated Financial Statements.
</TABLE>
-11-
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Chiquita Brands International, Inc. and Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
Minimum
Preferred pension Total
and Retained liability share-
preference Capital earnings adjust- holders
stock Capital stock surplus (deficit) ment equity
- - ------------------------------------------------------------------------------------------------------------
(In thousands, except share amounts) Shares Par value
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992 $52,270 48,163,560 $16,055 $490,369 $116,193 $(6,925) $667,962
Capital stock repurchased -- (30,000) (10) (102) (325) -- (437)
Stock options exercised -- 17,120 6 168 -- -- 174
Other shares issued -- 168,000 55 1,738 -- -- 1,793
Change in minimum pension
liability adjustment -- -- -- -- -- (11,004) (11,004)
Net loss -- -- -- -- (51,081) -- (51,081)
Dividends
Capital stock -- -- -- -- (21,191) -- (21,191)
Preference stock -- 191,673 64 2,067 (4,278) -- (2,147)
- - ------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 $52,270 48,510,353 $16,170 $494,240 $ 39,318 $(17,929) $584,069
Stock options exercised -- 118,133 40 1,325 -- -- 1,365
Series A preferred stock issued 138,369 -- -- -- -- -- 138,369
Other shares issued -- 358,244 119 6,075 -- -- 6,194
Change in minimum pension
liability adjustment -- -- -- -- -- 2,805 2,805
Net loss -- -- -- -- (71,540) -- (71,540)
Dividends
Capital stock -- -- -- -- (9,757) -- (9,757)
Preferred and preference stock -- 314,151 105 4,160 (10,961) -- (6,696)
- - ------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 $190,639 49,300,881 $16,434 $505,800 $(52,940) $(15,124) $644,809
Stock options exercised -- 331,691 110 3,249 -- -- 3,359
Capital stock issued in exchange
for Series C preference stock (52,270) 3,241,546 1,081 51,189 -- -- --
Other shares issued -- 1,661,658 553 17,659 -- -- 18,212
Change in minimum pension
liability adjustment -- -- -- -- -- 15,124 15,124
Net income -- -- -- -- 9,212 -- 9,212
Dividends
Capital stock -- -- -- -- (10,236) -- (10,236)
Preferred and preference stock -- 233,364 78 3,122 (11,473) -- (8,273)
- - ------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 $138,369 54,769,140 $18,256 $581,019 $(65,437) $ -- $672,207
============================================================================================================
See Notes to Consolidated Financial Statements.
<PAGE>
</TABLE> -12-
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOW
Chiquita Brands International, Inc. and Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
Year Ended December 31,
(In thousands 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided (used) by:
Operations
Income (loss) from continuing operations $27,969 $(84,311) $(51,081)
Depreciation and amortization 104,581 113,080 109,711
Gain on sales of transportation assets and other divestitures(32,100) -- --
Write-downs of farms and cultivations -- 24,600 --
Changes in current assets and liabilities
Receivables 16,194 (19,418) (7,571)
Inventories 10,054 (14,275) 40,535
Accounts payable (29,838) 26,083 (16,405)
Other current assets and liabilities (3,643) 19,454 (28,871)
Other (2,906) 7,600 895
- - ------------------------------------------------------------------------------------------------------------
Cash flow from operations 90,311 72,813 47,213
- - ------------------------------------------------------------------------------------------------------------
Investing
Capital expenditures (64,640) (136,981) (196,554)
Restricted cash deposits 35,510 (24,010) (51,020)
Long-term investments (814) (7,717) (49,466)
Decrease in marketable securities -- -- 25,212
Proceeds from sales of transportation assets
and other divestitures 166,835 41,705 22,000
Other (4,188) (6,518) 11,828
- - ------------------------------------------------------------------------------------------------------------
Cash flow from investing 132,703 (133,521) (238,000)
- - ------------------------------------------------------------------------------------------------------------
Financing
Debt transactions
Issuances of long-term debt 214,171 278,388 151,160
Repayments of long-term debt (361,906) (369,666) (132,839)
Increase (decrease) in notes and loans payable (10,236) 21,911 (25,621)
Stock transactions
Issuance of preferred stock -- 138,369 --
Issuances of capital stock 3,413 5,006 1,417
Dividends (18,509) (16,453) (23,338)
- - ------------------------------------------------------------------------------------------------------------
Cash flow from financing (173,067) 57,555 (29,221)
- - ------------------------------------------------------------------------------------------------------------
Discontinued Operations 21,205 17,450 (16,735)
- - ------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and equivalents 71,152 14,297 (236,743)
Balance at beginning of year 165,523 151,226 387,969
- - ------------------------------------------------------------------------------------------------------------
Balance at end of year $236,675 $165,523 $151,226
<PAGE>
=============================================================================================================
See Notes to Consolidated Financial Statements.
</TABLE>
-13-
Notes to Consolidated Financial Statements
Chiquita Brands International, Inc. and Subsidiary Companies
Note 1 -- Summary of Significant Accounting Policies
American Financial Group, Inc. and its subsidiaries ("AFG")
owned approximately 44% of the outstanding capital stock of
Chiquita Brands International, Inc. ("Chiquita" or the "Company")
as of December 31, 1995.
Consolidation
The consolidated financial statements include the accounts of
the Company and its majority-owned subsidiaries, other than the
Meat Division which was sold in December 1995 and is accounted
for as a discontinued operation (see Note 2). The accompanying
notes present amounts related only to continuing operations,
unless otherwise indicated. Intercompany balances and
transactions have been eliminated.
Investments representing minority interests are accounted for
by the equity method when Chiquita has the ability to exercise
significant influence in the investees' operations; otherwise,
they are accounted for at cost. At December 31, 1995 and 1994,
investments in food-related companies of $79 million and $66
million, respectively, were accounted for using the equity
method. The excess ($16 million) of the carrying value over
Chiquita's share of the fair value of the investees' net assets
at the date of acquisition is being amortized over periods
ranging from 10 to 40 years.
Use of Estimates
The financial statements have been prepared in conformity with
generally accepted accounting principles, which require
management to make estimates and assumptions that affect the
amounts and disclosures reported in the financial statements and
accompanying notes.
Cash and Equivalents
Cash and equivalents include all unrestricted cash and highly
liquid investments with a maturity when purchased of three months
or less.
Marketable Securities
Marketable securities consist of common stock categorized as
available-for-sale (see Note 2).
<PAGE>
Inventories
Inventories are valued at the lower of cost or market. Cost
for growing crops and certain banana inventories is determined
principally on the "last-in, first-out" (LIFO) basis. Cost for
other inventory categories is determined principally on the
"first-in, first-out" (FIFO) or average cost basis.
Intangibles
Intangibles consist of goodwill and trademarks which are being
amortized over 40 years. Accumulated amortization was $39.3
million and $34.0 million at December 31, 1995 and 1994,
respectively. The carrying value of intangibles is evaluated
periodically in relation to the operating performance and future
cash flows of the underlying businesses.
Income Taxes
Deferred income taxes are recognized at currently enacted tax
rates for temporary differences between the financial reporting
and income tax bases of assets and liabilities. Deferred taxes
are not provided on the undistributed earnings of subsidiaries
operating outside the U.S. that have been or are intended to be
permanently reinvested.
Foreign Exchange
Chiquita utilizes the U.S. dollar as its functional currency.
Net foreign exchange gains, which amounted to approximately $7.2
million, $11.0 million and $7.5 million in 1995, 1994 and 1993,
respectively, are included in income.
The Company has a long-standing policy of periodically
entering into foreign exchange forward contracts and purchasing
foreign currency options to hedge transactions denominated in
foreign currencies in order to protect the Company from the risk
that the eventual dollar cash flows of the transactions will be
adversely affected by changes in exchange rates. Gains and
losses on forward contracts used to hedge firm commitments and on
purchased options are deferred and included in the measurement of
the underlying transactions. Gains and losses on forward
contracts used to hedge other transactions are included in income
on a current basis.
Earnings Per Share
Primary earnings per share is calculated on the basis of the
weighted average number of shares of common stock and equivalent
Series C preference stock outstanding during the year, reduced by
restricted
-14-
shares related to unearned compensation, and increased by the
dilutive effect, if any, of assumed conversion of stock options.
Fully diluted earnings per share also includes the dilutive
effect, if any, of assumed conversion of Series A preferred stock
and convertible subordinated debentures.
<PAGE>
Note 2 -- Discontinued Operations
Pursuant to a plan of disposal for all remaining Meat Division
operations, the Company completed the sale of a major fresh pork
processing facility in December 1992. During 1994, the
Division's specialty meat operations were sold for approximately
$53 million in cash resulting in a gain of $10.2 million. In
December 1995, the remaining meat operations were sold to
Smithfield Foods, Inc. for approximately $60 million, including
$25 million in cash and approximately 1.1 million shares (6%) of
Smithfield s outstanding common stock. Smithfield assumed all
Meat Division liabilities, including those related to pension
obligations.
Meat Division operating results included in Chiquita s
Consolidated Statement of Income as Discontinued operations are
as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $1,460,608 $1,455,894 $1,549,712
- - ------------------------------------------------------------------------------------------------------------
Income from operations 3,351 25,455 --
Gain on sale 576 10,156 --
Minimum pension liability adjustment (15,124) -- --
- - ------------------------------------------------------------------------------------------------------------
Discontinued operations $(11,197) $35,611 $--
============================================================================================================
</TABLE>
The $15.1 million minimum pension liability adjustment
recognized in 1995 was previously charged directly to
shareholders' equity.
Note 3 -- Other Divestitures
During 1995, the Company completed certain divestitures and
took other actions as part of its ongoing program to improve
shareholder value. These actions, which included sales of older
ships, the sale of the Costa Rican operations of Chiquita's Numar
edible oils group, the shut-down of a portion of the Company's
juice operations and the reconfiguration of banana production
assets, resulted in a net gain of $19 million. Cash proceeds
aggregated $167 million. Additional proceeds of $50 million,
consisting of secured notes, are collectible over the next five
years.
<PAGE>
<TABLE>
<CAPTION>
Note 4 -- Inventories
Inventories consist of the following:
- - ------------------------------------------------------------------------------------------------------------
December 31,
(In thousands) 1995 1994
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bananas and other fresh produce $39,920 $42,444
Other food products 64,528 68,713
Growing crops 120,178 115,177
Materials and supplies 56,925 68,062
Other 11,828 14,153
- - ------------------------------------------------------------------------------------------------------------
$293,379 $308,549
============================================================================================================
</TABLE>
The carrying value of inventories valued by the LIFO method
was $128 million at December 31, 1995 and $126 million at
December 31, 1994. If inventories were stated at current costs,
total inventory values would have been approximately $28 million
and $30 million higher than reported at December 31, 1995 and
1994, respectively.
<TABLE>
<CAPTION>
Note 5 -- Property, Plant and Equipment, Net
Property, plant and equipment consist of the following:
- - ------------------------------------------------------------------------------------------------------------
December 31, Depreciable
(In thousands) 1995 1994 Lives (Years)
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Land $88,963 $107,579
Buildings and improvements 190,980 205,735 7 to 40
Machinery and equipment 387,376 399,437 3 to 30
Ships and containers 662,967 796,906 5 to 20
Cultivations 291,326 317,233 3 to 30
Other 71,517 78,352 3 to 40
- - ------------------------------------------------------------------------------------------------------------
1,693,129 1,905,242
Accumulated depreciation (510,985) (518,110)
- - ------------------------------------------------------------------------------------------------------------
$1,182,144 $1,387,132
============================================================================================================
</TABLE>
-15-
Property, plant and equipment are stated at cost and, except
for land and certain improvements, are depreciated on a straight-
line basis over their estimated useful lives. The Company
capitalized interest costs of $1 million in 1995, $4 million in
1994 and $8 million in 1993.
<PAGE>
In March 1995, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 121
Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of effective for 1996. Although the
new rule is under study, the Company does not expect it to have a
material effect on its financial statements.
<TABLE>
<CAPTION>
Note 6 -- Leases
Total rental expense consists of the following:
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross rentals - ships and containers $94,829 $101,207 $142,969
- other 35,562 34,084 32,528
- - ------------------------------------------------------------------------------------------------------------
130,391 135,291 175,497
Less sublease rentals (17,310) (4,740) (7,189)
- - ------------------------------------------------------------------------------------------------------------
$113,081 $130,551 $168,308
=============================================================================================================
</TABLE>
Future minimum rental payments required under operating leases
having initial or remaining non-cancelable lease terms in excess
of one year at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
Gross Rentals
- - ------------------------------------------------------------------------------------------------------------
(In thousands) Ships and containers Other Total
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1996 $46,698 $20,607 $67,305
1997 27,258 18,574 45,832
1998 26,932 13,917 40,849
1999 30,191 9,658 39,849
2000 25,174 4,164 29,338
Later years 51,124 6,009 57,133
=============================================================================================================
</TABLE>
Portions of the minimum rental payments for ships constitute
reimbursement for ship operating costs paid for by the lessor.
Aggregate future minimum rental payments to be received from non-
cancelable subleases at December 31, 1995, principally for office
space and ships, are $37 million.
<PAGE>
<TABLE>
<CAPTION>
Note 7 -- Debt
Long-term debt consists of the following:
- - ------------------------------------------------------------------------------------------------------------
(In thousands) December 31,
Parent Company 1995 1994
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
9 1/8% senior notes, due 2004 $175,000 $175,000
9 5/8% senior notes, due 2004, less unamortized discount
of $2,439 and $2,632 (imputed interest rate of 9.8%) 247,561 247,368
7% subordinated debentures, due 2001, convertible
into capital stock at $43 per share 138,000 138,000
10 1/2% subordinated debentures, due 2004, less unamortized
discount of $5,464 and $5,839 (imputed interest rate of 12.1%) 60,355 59,980
11 1/2% subordinated notes, due 2001 220,000 220,000
Other notes and loans 28 47
Less current maturities (19) (18)
- - ------------------------------------------------------------------------------------------------------------
Long-term debt of parent company $840,925 $840,377
============================================================================================================
Subsidiary Companies
- - ------------------------------------------------------------------------------------------------------------
Loans payable secured by ships and containers, due in
installments from 1996 to 2009, bearing interest at
effective rates averaging 8.6% (8.8% at December 31, 1994) $295,074 $368,146
Caribbean Basin Projects Financing Authority (CBI Industrial
Revenue Bonds 1993 Series A) loan, due 1998, bearing
interest at a variable rate of 4.8% (4.4% at December 31, 1994) 38,000 38,000
Overseas Private Investment Corporation loans, due in installments
through 2002, bearing interest at rates averaging 9% 15,621 17,774
Loans and notes payable in foreign currencies maturing through 2008,
bearing interest at rates averaging 19% (22% at December 31, 1994) 34,076 50,846
Other loans and notes payable maturing through 2012,
bearing interest at rates averaging 9% 71,208 140,686
Less current maturities (52,858) (90,993)
- - ------------------------------------------------------------------------------------------------------------
Long-term debt of subsidiaries $401,121 $524,459
============================================================================================================
</TABLE>
<PAGE>
Certain of the subordinated debentures have sinking fund
requirements and are callable at the Company's option at prices
ranging from par to premiums of 1.9% to 5.7% over par at various
dates through 1998. Certain of the Company's debt agreements
contain restrictions on the payment of cash dividends. At
December 31, 1995, approximately $160 million was available for
dividend payments under the most restrictive of these agreements.
During the second quarter of 1995, the Company replaced $153
million of ship loans with loans having
-16-
longer maturities totaling $187 million resulting in an
extraordinary loss of $4.7 million. In 1995, the Company sold
and leased back $40 million of container equipment and used $27
million of the sale proceeds to prepay related debt, resulting in
an extraordinary loss of $2.9 million.
In February 1994, the Company issued $175 million principal
amount of 9 1/8% senior notes due 2004. The proceeds from this
issuance, together with the proceeds from the sale of preferred
stock (see Note 11), were used to redeem or repay higher rate
subordinated and subsidiary debt. These prepayments resulted in
an extraordinary loss of $22.8 million consisting principally of
write-offs of unamortized discounts and $5 million of call
premiums.
At December 31, 1995, $68 million of the carrying amount of
loans secured by ships and containers had interest rates fixed at
an average of 8% by the terms of the loans or by the operation of
interest rate swap agreements (see Note 8). The overall
effective interest rate on ship and container loans includes the
amortization of deferred hedging gains and losses from interest
rate futures contracts. No such contracts were outstanding at
December 31, 1995 or 1994.
Cash payments relating to interest expense were $156.0
million, $158.7 million and $159.4 million in 1995, 1994 and
1993, respectively.
Maturities and sinking fund requirements on long-term debt
during the next five years, after application of previously
reacquired debentures to meet sinking fund requirements, are:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
Parent Subsidiary
(In thousands) Company Companies Total
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1996 $19 $52,858 $52,877
1997 9 61,000 61,009
1998 -- 96,872 96,872
1999 -- 35,671 35,671
2000 -- 37,176 37,176
============================================================================================================
</TABLE>
<PAGE>
The Company maintains lines of credit with various domestic
and foreign banks for borrowing funds on a short-term basis and
has short-term working capital loans with domestic and foreign
banks. At December 31, 1995, the weighted average interest rate
for all short-term notes and loans payable was 10.6% (11.7% at
December 31, 1994).
Note 8 -- Hedging Transactions
At December 31, 1995, the Company had foreign exchange forward
contracts to ensure conversion of approximately $20 million of
foreign sales commitments for 1996 at an average exchange rate of
1.36 Deutsche marks per U.S. dollar. The fair value of these
contracts, based on quoted market prices, was not significant.
The Company also had option contracts which ensure conversion
through 1996 of approximately $70 million of foreign sales at a
rate not higher than 1.44 Deutsche marks per U.S. dollar and
approximately $230 million of foreign sales at a rate not higher
than 1.45 Deutsche marks per U.S. dollar or lower than 1.32
Deutsche marks per U.S. dollar. The carrying value of these
option contracts, and the fair value based on quoted market
prices, was not significant.
Chiquita has interest rate swap agreements to fix the rate of
interest on approximately $49 million of its variable rate ship
and container loans maturing between 1998 and 2001. The Company
has entered into currency and interest rate swap agreements which
have the effect of converting $54 million of ship loans
denominated in pounds sterling into U.S. dollar loans with
variable interest rates that become fixed at 7.7% beginning in
1997. The Company s swap agreements have maturities ranging from
1998 to 2005.
The carrying values and estimated fair values of the Company's
debt and associated swap agreements are summarized below:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
December 31,
1995 1994
- - ------------------------------------------------------------------------------------------------------------
Carrying Estimated Carrying Estimated
(In thousands) value fair value value fair value
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt $1,414,379 $1,442,900 $1,585,887 $1,531,400
Interest rate swap agreements -- 3,100 -- (300)
Foreign currency swap
agreements -- (3,000) -- 400
- - ------------------------------------------------------------------------------------------------------------
$1,414,379 $1,443,000 $1,585,887 $1,531,500
============================================================================================================
</TABLE>
Fair value for the Company's publicly traded debt is based on
quoted market prices. Fair value for other debt is estimated
based on the current rates offered to
-17-
<PAGE>
the Company for debt of similar maturities. The fair values of
interest rate and foreign currency swap agreements are estimated
based on the cost to terminate the agreements.
The Company is exposed to credit loss in the event of
nonperformance by counterparties on foreign exchange forward
contracts, interest rate swap agreements and currency swap
agreements. However, because the Company's hedging activities
are transacted only with highly rated institutions, Chiquita does
not anticipate nonperformance by any of these counterparties.
The amount of any credit exposure is limited to unrealized gains
on such contracts and swaps.
Note 9 -- Pension and Severance Benefits
The Company and its subsidiaries have several defined benefit
and contribution pension plans covering approximately 5,000
domestic and foreign employees. Approximately 31,000 employees
are covered by Central and South American severance plans.
Pension plans covering eligible salaried employees and Central
and South American severance plans for all employees call for
benefits to be based upon years of service and compensation
rates.
<PAGE>
<TABLE>
<CAPTION>
Pension and severance expense consists of the following:
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Defined benefit and severance plans:
Service cost -- benefits earned
during the period $5,664 $5,383 $5,885
Interest cost on projected benefit obligation 8,622 8,412 8,423
Actual return on plan assets (2,505) (623) (2,215)
Net amortization and deferral 1,441 (1,181) (521)
- - ------------------------------------------------------------------------------------------------------------
13,222 11,991 11,572
Defined contribution plans 3,458 3,648 3,669
- - ------------------------------------------------------------------------------------------------------------
Total pension and severance expense $16,680 $15,639 $15,241
=============================================================================================================
</TABLE>
The projected benefit obligations were determined using
assumed discount rates of approximately 9 1/4% in 1995 and 1994
for unfunded Central and South American pension and severance
benefits and approximately 7 3/4% in 1995 and 7% in 1994 for all
other plan benefits. The assumed long-term rate of compensation
increase was between 5% and 6% in 1995 and 1994 and the assumed
long-term rate of return on plan assets was approximately 9% in
1995 and 1994.
Pensions are funded in accordance with the requirements of the
Employee Retirement Income Security Act or equivalent foreign
regulations. Plan assets consist primarily of corporate debt,
U.S. government and agency obligations and collective trust
funds. In accordance with local regulations, severance benefits
in Central and South America are generally not funded until
benefits are paid.
<PAGE>
The funded status of the Company's domestic and foreign
defined benefit pension and severance plans is as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
Plans for which Plans for which
Assets Exceed Accumulated Benefits
Accumulated Benefits Exceed Assets
at December 31, at December 31,
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1995 1994
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Plan assets at fair market value $6,723 $15,193 $16,836 $22,587
- - ------------------------------------------------------------------------------------------------------------
Present value of benefit obligations:
Vested 4,933 13,875 74,720 67,056
Nonvested 56 37 965 4,182
- - ------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation 4,989 13,912 75,685 71,238
Additional amounts related to
projected pay increases 2,094 854 19,286 18,333
- - ------------------------------------------------------------------------------------------------------------
Projected benefit obligation 7,083 14,766 94,971 89,571
- - ------------------------------------------------------------------------------------------------------------
Projected benefit obligation less than
(in excess of) plan assets (360) 427 (78,135) (66,984)
Projected benefit obligation not yet
recognized in the balance sheet:
Net actuarial (gain) loss 690 (414) 18,661 9,705
Prior service cost 224 -- 3,262 2,333
Obligation (asset) at transition,
net of amortization (39) (45) 5,109 6,295
Adjustment required to recognize
minimum liability -- -- (7,746) --
- - ------------------------------------------------------------------------------------------------------------
Net balance sheet asset (liability) $515 $(32) $(58,849)* $(48,651)*
=============================================================================================================
</TABLE>
*Includes $56 million in 1995 and $47 million in 1994 relating to
foreign pension and severance plans that are not required to be
funded until benefits are paid.
-18-
The adjustment required to recognize the minimum pension
liability is based on the excess of the accumulated benefit
obligation over the fair market value of assets of Central and
South American severance plans. This adjustment is offset by
recording an intangible asset.
<PAGE>
Note 10 -- Stock Options
Under its non-qualified 1986 Stock Option and Incentive Plan,
the Company may grant up to an aggregate of 15,000,000 shares of
capital stock in the form of stock options, stock appreciation
rights and stock awards. Under this plan, options have been
granted to directors, officers and other key employees to
purchase shares of the Company's capital stock at the fair market
value at the date of grant. The options may be exercised over a
period not in excess of 20 years.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
1995 1994
Option Option
Shares Price Shares Price
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Under option at beginning
of year 5,213,758 $5.75 - 34.44 5,451,768 $5.75 - 47.75
Options granted 1,764,460 12.31 - 15.88 287,165 11.44 - 17.06
Options exercised (331,691) 5.75 - 16.38 (118,133 )8.67 - 16.38
Options canceled or expired (653,555) 10.31 - 34.44 (407,042 )8.67 - 47.75
- - ------------------------------------------------------------------------------------------------------------
Under option at end of year 5,992,972 $8.67 - 34.44 5,213,758 $5.75 - 34.44
- - ------------------------------------------------------------------------------------------------------------
Options exercisable at end of year 2,439,015 2,234,823
- - ------------------------------------------------------------------------------------------------------------
Shares available for future grant 6,365,296 7,968,754
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
Stock options for 17,120 shares were exercised during 1993 at
prices ranging from $8.67 to $16.13 per share.
In October 1995, the FASB issued Statement of Financial
Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" ("SFAS No. 123") effective for 1996. The Company
intends to continue to use its current method of accounting for
stock-based compensation, as permitted by SFAS No. 123.
Therefore, the new rule will have no effect on the Company's
financial statements.
Note 11 -- Shareholders' Equity
At December 31, 1995, there were 150 million authorized shares
of capital stock. Of the shares authorized but unissued at
December 31, 1995, 14.8 million shares were reserved for issuance
under stock option and employee benefit plans, 3.2 million shares
were reserved for conversion of subordinated debentures, and 7.6
million shares were reserved for conversion of preferred stock at
the holders option. In addition, Chiquita has reserved 21.1
million shares for the maximum additional number of shares
potentially issuable upon conversion of preferred stock at the
Company's option after February 2001.
<PAGE>
During the fourth quarter of 1995, Chiquita issued 725,000
shares of capital stock in repayment of $11.2 million of
subsidiary debt.
In February 1994, the Company sold 2,875,000 shares of $2.875
Non-Voting Cumulative Preferred Stock, Series A, par value $1.00
per share (the "Series A Shares") for aggregate net proceeds of
$138 million. Each Series A Share has a liquidation preference
of $50.00 per share and is entitled to an annual cash dividend of
$2.875 per share. Each Series A Share is convertible into 2.6316
shares of capital stock at the holder's option or, in certain
circumstances beginning in February 1997, at the Company s
option. After February 2001, the Company may convert each Series
A Share into a number of capital shares (not exceeding 10 shares)
having a total market value of $50.00. Holders of Series A
Shares have the right to elect additional directors in addition
to the directors ordinarily elected by holders of capital stock
in certain circumstances where the Company fails to pay quarterly
dividends on the preferred stock. The Board of Directors has the
authority to fix the terms of 7,125,000 additional shares of Non-
Voting Cumulative Preferred Stock.
The Company has four million authorized shares of Cumulative
Preference Stock, one million of which were designated as Series
C Shares. In 1995, all outstanding shares of Mandatorily
Exchangeable Cumulative Preference Stock, Series C were converted
into capital stock.
-19-
<PAGE>
<TABLE>
<CAPTION>
Note 12 - Income Taxes
Income taxes consist of the following:
- - ------------------------------------------------------------------------------------------------------------
United States
(In thousands) Federal State Foreign Total
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Current tax expense $1,218 $1,011 $12,657 $14,886
Deferred tax benefit -- -- (986) (986)
- - ------------------------------------------------------------------------------------------------------------
$1,218 $1,011 $11,671 $13,900
============================================================================================================
1994
Current tax expense $-- $1,024 $11,566 $12,590
Deferred tax expense -- -- 910 910
- - ------------------------------------------------------------------------------------------------------------
$-- $1,024 $12,476 $13,500
============================================================================================================
1993
Current tax expense $-- $1,944 $13,247 $15,191
Deferred tax benefit -- -- (3,191) (3,191)
- - ------------------------------------------------------------------------------------------------------------
$-- $1,944 $10,056 $12,000
============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Income (loss) from continuing operations before income taxes consists of the following:
- - ------------------------------------------------------------------------------------------------------------
(In thousands)
Subject to tax in: 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $(17,735) $(111,776) $(94,314)
Foreign jurisdictions 59,604 40,965 55,233
- - ------------------------------------------------------------------------------------------------------------
$ 41,869 $ (70,811) $(39,081)
============================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income tax expense differs from income taxes computed at the U.S. federal statutory rate for the
following reasons:
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense (benefit) computed at U.S.
federal statutory rate $14,654 $(24,784) $(13,678)
U.S. alternative minimum tax, net of credit 821 -- --
State income taxes, net of federal benefit 657 666 1,264
U.S. losses for which no tax benefit has
been recognized -- 34,012 19,694
Foreign losses for which no tax benefit has
been recognized 21,563 19,406 13,166
Taxes on foreign operations at other than
U.S. rates (10,968) (19,914) (12,005)
Use of U.S. net operating loss carryforwards (11,959) -- --
Other (868) 4,114 3,559
- - ------------------------------------------------------------------------------------------------------------
Income tax expense $13,900 $ 13,500 $ 12,000
============================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The components of deferred income taxes included on the balance sheet at December 31, 1995 and 1994 are
as follows:
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax benefits
Employee benefits $24,003 $23,194
Accrued expenses 27,291 23,626
Discontinued operations -- 21,430
Other 16,932 15,832
- - ------------------------------------------------------------------------------------------------------------
68,226 84,082
Valuation allowance (2,600) (14,442)
- - ------------------------------------------------------------------------------------------------------------
65,626 69,640
- - ------------------------------------------------------------------------------------------------------------
Deferred tax liabilities
Depreciation and amortization (22,837) (22,016)
Growing crops (20,968) (20,968)
Long-term debt (11,583) (16,072)
Other (11,344) (14,032)
- - ------------------------------------------------------------------------------------------------------------
(66,732) (73,088)
- - ------------------------------------------------------------------------------------------------------------
Net deferred tax liability $ (1,106) $ (3,448)
=============================================================================================================
</TABLE>
Net deferred taxes do not reflect the benefit that would be
available to the Company from the use of its U.S. operating loss
carryforwards of $180 million, capital loss carryforwards of $37
million, alternative minimum tax credits of $6 million and
foreign tax credit carryforwards of $21 million. The operating
loss carryforwards expire in 2008 and 2009, the capital loss
carryforwards expire in 2000 and the foreign tax credit
carryforwards expire between now and 1999. Undistributed
earnings of foreign subsidiaries which have been, or are intended
to be, permanently reinvested in operating assets, if remitted,
are expected to result in little or no tax by operation of
relevant statutes and the carryforward attributes described
above.
Cash payments for income taxes, net of refunds, were $14.4
million in 1995, $12.1 million in 1994 and $17.0 million in 1993.
Note 13 -- Geographic Area Information
The Company is one of the world's leading marketers,
processors and producers of quality food products. The Company's
products are sold throughout the world and its principal
production and processing
-20-
<PAGE>
operations are conducted in Central, South and North America.
With the sale of its remaining Meat Division operations in
December 1995, the Company s continuing operations constitute a
single business segment.
Chiquita's earnings are heavily dependent upon products grown
and purchased in Central and South America. These activities, a
significant factor in the economies of the countries where
Chiquita produces bananas and related products, are subject to
the risks that are inherent in operating in such foreign
countries, including government regulation, currency restrictions
and other restraints, risk of expropriation and burdensome taxes.
Certain of these operations are substantially dependent upon
leases and other agreements with these governments.
The Company is also subject to a variety of governmental
regulations in certain countries where it markets bananas,
including import quotas and tariffs, currency exchange controls
and taxes.
<PAGE>
<TABLE>
<CAPTION>
INFORMATION BY GEOGRAPHIC AREA
- - ------------------------------------------------------------------------------------------------------------
(In thousands) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales to unaffiliated customers
North America $1,261,422 $1,224,114 $1,238,678
Central and South America 177,419 179,726 184,060
Europe and other international 1,127,151 1,101,986 1,110,187
- - ------------------------------------------------------------------------------------------------------------
Consolidated net sales $2,565,992 $2,505,826 $2,532,925
- - ------------------------------------------------------------------------------------------------------------
Operating income
North America $31,203 $(8,370) $20,469
Central and South America 64,891 19,071 17,607
Europe and other international 93,102 73,746 78,691
Unallocated expenses (13,426) (13,262) (12,919)
- - ------------------------------------------------------------------------------------------------------------
Consolidated operating income $175,770 $71,185 $103,848
- - ------------------------------------------------------------------------------------------------------------
Identifiable assets
North America $439,385 $493,079 $509,760
Central and South America 835,851 864,232 912,321
Europe and other international 409,677 385,241 339,374
Shipping operations 575,761 671,756 656,816
Corporate assets 362,859 359,931 304,553
- - ------------------------------------------------------------------------------------------------------------
Consolidated assets $2,623,533 $2,774,239 $2,722,824
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
Net sales in the preceding table excludes intercompany sales
of bananas from Central and South America to different geographic
areas. These sales, which are eliminated in consolidation and
are measured at cost under the method used for internal
management financial reporting purposes, were approximately $500
million in each of the last three years. Banana sales to
unaffiliated customers in Central and South America and other
intergeographic sales are not significant.
In 1995, divestitures of certain operations and other actions
(see Note 3) had the effect of increasing (decreasing) operating
income by geographic area as follows: North America, $(9)
million; Central and South America, $37 million; Europe and
other international, $(9) million. Operating income for 1994
includes charges and losses totaling $67 million primarily
resulting from farm closings and write-downs of banana
cultivations in Honduras and the substantial reduction of the
Company's Japanese "green" banana trading operations as follows:
North America, $(27) million; Europe and other international,
$(40) million.
<PAGE>
For purposes of reporting identifiable assets by geographic
area, cash and equivalents, marketable securities, restricted
cash, trademarks and the net assets of discontinued operations
are included in corporate assets. Minority equity investments
are included in the geographic area where their operations are
located.
Note 14 -- Litigation
A number of legal actions are pending against the Company.
Based on information currently available to the Company and
advice of counsel, management does not believe such litigation
will, individually or in the aggregate, have a material adverse
effect on the financial statements of the Company.
-21-
Note 15 -- Quarterly Financial Data (Unaudited)
The following quarterly financial data are unaudited, but in
the opinion of management include all necessary adjustments for a
fair presentation of the interim results, which are subject to
significant seasonal variations.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
1995
- - ------------------------------------------------------------------------------------------------------------
(In thousands, except per
share amounts) March 31 June 30 Sept. 30 Dec. 31
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $674,269 $727,519 $569,005 $595,199
Cost of sales (495,995) (547,336) (437,884) (476,848)
Operating income 76,220 70,164 25,341 4,045
Income (loss) from continuing operations 33,599 32,095 (8,278) (29,447)
Discontinued operations 4,029 2,035 (2,713) (14,548)
Income (loss) before extraordinary item 37,628 34,130 (10,991) (43,995)
Extraordinary loss from debt refinancing -- (4,713) -- (2,847)
Net income (loss) 37,628 29,417 (10,991) (46,842)
Fully diluted earnings (loss) per share
- Continuing operations .55 .52 (.19) (.58)
- Discontinued operations .07 .03 (.05) (.27)
- Extraordinary item -- (.07) -- (.06)
- Net income (loss) .62 .48 (.24) (.91)
Dividends per common share .05 .05 .05 .05
Capital stock market price
High 14.50 14.00 17.25 18.00
Low 12.25 12.63 13.63 13.38
=============================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1994
- - ------------------------------------------------------------------------------------------------------------
(In thousands, except per
share amounts) March 31 June 30 Sept. 30 Dec. 31
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $672,468 $660,710 $564,314 $608,334
Cost of sales (488,395) (477,319) (502,150) (528,315)
Operating income (loss) 81,183 70,133 (44,891) (35,240)
Income (loss) from continuing operations 35,534 30,945 (80,652) (70,138)
Discontinued operations -- -- -- 35,611
Extraordinary loss from debt refinancing (22,840) -- -- --
Net income (loss) 12,694 30,945 (80,652) (34,527)
Fully diluted earnings (loss) per share
- Continuing operations .62 .51 (1.59) (1.38)
- Discontinued operations -- -- -- .68
- Extraordinary item (.40) -- -- --
- Net income (loss) .22 .51 (1.59) (.70)
Dividends per common share .05 .05 .05 .05
Capital stock market price
High 19.25 17.63 17.00 16.50
Low 11.25 12.13 12.13 12.38
=============================================================================================================
</TABLE>
Operating income for the quarter ended September 30, 1995
includes a net gain of $5.8 million resulting primarily from the
sale of older ships. For the quarter ended December 31, 1995,
results include net gains of $13.5 million primarily resulting
from divestitures of operations and other actions taken as part
of the Company s ongoing program to improve shareholder value.
The operating loss for the quarter ended September 30, 1994
includes charges and losses totaling $57.2 million primarily
resulting from farm closings and write-downs of banana
cultivations in Honduras and the substantial reduction of the
Company's Japanese "green" banana trading operations. For the
quarter ended December 31, 1994, results include $10.3 million of
charges and losses primarily resulting from write-downs of ships
held for sale and losses from the scale-back of the Company's
Japanese "green" banana trading operations.
A separate computation of earnings per share is made for each
quarter presented. The dilutive effect on earnings per share
resulting from the assumed conversions of preferred stock and
convertible debt and exercise of stock options and warrants is
included in each quarter in which dilution occurs. The earnings
per share computation for the year is a separate annual
calculation. Accordingly, the sum of the quarterly earnings per
share amounts will not necessarily equal the earnings per share
for the year.
-22-
<PAGE>
<TABLE>
<CAPTION>
Investor Information
Chiquita Brands International, Inc.
- - ------------------------------------------------------------------------------------------------------------
<S> <C>
Stock Exchange Listings Trustees and Transfer Agents -
New York, Boston & Pacific Debentures/Notes
Stock Symbol 7% Convertible Subordinated Debentures due
CQB March 28, 2001
Trustee -
Shareholders of Record Chemical Bank
At March 1, 1996, there were 6,535 450 West 33rd Street
common shareholders of record. New York, New York 10001
Transfer Agent and Registrar - Transfer, Paying and Conversion Agents -
Capital Stock and $2.875 Non-Voting Chemical Bank - London, England
Cumulative Preferred Stock Series A Banque Paribas Luxembourg - Luxembourg
Chiquita Brands International, Inc. Banque Bruxelles Lambert S.A.-Brussels, Belgium
c/o Securities Transfer Company Bank Leu, Ltd.-Zurich, Switzerland
One East Fourth Street
Cincinnati, Ohio 45202 9 1/8% Senior Notes due March 1, 2004*
(513) 579-2414 9 5/8% Senior Notes due January 15, 2004*
(800) 368-3417 Trustee -
The Fifth Third Bank
Dividend Reinvestment 38 Fountain Square Plaza
Shareholders who hold at least 100 common Cincinnati, OH 45263
shares may increase their investment in
Chiquita shares through the Dividend 10 1/2% Subordinated Debentures due August 1, 2004*
Reinvestment Plan without payment of any 11 1/2% Subordinated Notes due June 1, 2001*
brokerage commission or service charge. Trustee-
Full details concerning the Plan may be Star Bank, N.A.
obtained from Corporate Affairs or the 425 Walnut Street
Transfer Agennt. Cincinnati, Ohio 45202
Annual Meeting *Chiquita Brands International, Inc., c/o Securities
May 8, 1996 Transfer Company, is transfer agent for these Notes
10 a.m. Eastern Daylight Time and Debentures
Omni Netherland Plaza
35 West Fifth Street
Cincinnati, Ohio 45202
Investor Inquiries
For other questions concerning your
investment in Chiquita, contact Vice
President, Corporate Affairs at (513)
784-6366.
</TABLE>
-24-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 21
CHIQUITA BRANDS INTERNATIONAL, INC.
SUBSIDIARIES
As of March 1, 1996, the major subsidiaries of the Company,
the jurisdiction in which organized and the percent of voting
securities owned by the immediate parent corporation were as
follows:
Voting Securities
Organized Owned by
Under Laws of Immediate Parent
--------------------- -------------------------
<S> <C> <C>
Chiquita Brands, Inc. Delaware 100%
American Produce Company Delaware 100%
Banana Supply Co., Inc. Florida 100%
California Day-Fresh Foods, Inc. California 100%
Caribbean Enterprises, Inc. Delaware 100%
Great White Fleet, Ltd. Bermuda 100%
BVS Ltd. Bermuda 100%
CDV Ltd. Bermuda 100%
CDY Ltd. Bermuda 100%
CRH Shipping Ltd. Bermuda 100%
Danfund Ltd. Bermuda 100%
Danop Ltd. Bermuda 100%
DSF, Ltd. Bermuda 100%
Elke Shipping Limited Bermuda 100%
GPH Ltd. Bermuda 100%
NCV Ltd. Bermuda 100%
Norvel Ltd. Bermuda 100%
Chiquita Brands Company, North America Delaware 100%
CB Containers, Inc. Delaware 100%
OV Containers, Inc. Delaware 100%
Chiquita Citrus Packers, Inc. Delaware 80%
Chiquita Europe B.V. Netherlands 100%
Chiquita Banana Company B.V. Netherlands 100%
Chiquita Italia, S.p.A. Italy 100%
Chiquita Finland Oy Finland 100%
Chiquita Norge AS Norway 100%
Chiquita Packaged Foods B.V. Netherlands 100%
Chiquita Sweden AB Sweden 100%
Chiquita Tropical Fruit
Company, B.V. Netherlands 100%
Chiquita Frupac Inc. Delaware 100%
(Continued)
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 21 (cont.)
Percent of
Voting Securities
Organized Owned by
Under Laws of Immediate Parent
--------------------- ---------------------
<S> <C> <C>
Chiquita Gulf Citrus, Inc. Delaware 100%
Chiquita International Trading Company Delaware 100%
Chiquita International Limited Bermuda 100%
Chiquita Brands South Pacific Limited Australia 100%
Exportadora Chiquita Frupac Limitada Chile 100%
M.M. Holding Ltd. Bermuda 100%
Chiquita Tropical Products Company Delaware 100%
Chiquita Ventures, Inc. Delaware 100%
Chiriqui Land Company Delaware 100%
Compania Agricola del Guayas Delaware 100%
Compania Agricola de Rio Tinto Delaware 100%
Compania Bananera Atlantica Limitada Costa Rica 100%
Compania Frutera de Sevilla Delaware 100%
Corpofinanzas, S.A. Costa Rica 100%
Friday Canning Corporation Wisconsin 100%
Maritrop Trading Corporation Delaware 100%
Polymer United, Inc. Delaware 100%
Progressive Produce Corporation Ohio 100%
Theodoredis and Sons Banana
Holding Company Delaware 100%
Tela Railroad Company Delaware 100%
United Brands Japan, Ltd. Japan 95%
Compania Mundimar, S.A. Costa Rica 100%
Polymer United G.C., Inc. Delaware 100%
Solar Aquafarms, Inc. Delaware 100%
</TABLE>
been omitted. In the aggregate these subsidiaries, after
excluding approximately 130 foreign subsidiaries whose immediate
parents are listed above and which are involved in fresh foods
operations, do not constitute a significant subsidiary. The
consolidated financial statements include the accounts of the
Company and all majority-owned subsidiaries.
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual
Report on Form 10-K of Chiquita Brands International, Inc. and
subsidiary companies of our report dated February 26, 1996,
included in the 1995 Annual Report of Chiquita Brands
International, Inc. and subsidiary companies.
Our audits also included the financial statement schedule of
Chiquita Brands International, Inc. and subsidiary companies
listed in Item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, the financial
statement schedule referred to above, when considered in relation
to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the
following Registration Statements and related prospectuses of
Chiquita Brands International, Inc. and subsidiary companies of
our report dated February 26, 1996, with respect to the
consolidated financial statements and schedule of Chiquita Brands
International, Inc. and subsidiary companies incorporated by
reference in the Annual Report on Form 10-K for the year ended
December 31, 1995.
<TABLE>
<CAPTION>
Registration
Form No. Description
------ ----------- ----------------------------------------
<S> <C> <C>
S-3 33-58424 Dividend Reinvestment Plan
S-3 33-41057 Common Stock issuable upon conversion of Convertible
Subordinated Debentures
S-3 33-51995 Debt Securities, Preferred Stock and Common Stock
S-3 333-00789 Debt Securities, Preferred Stock, Depositary Shares,
Common Stock and Securities Warrants
S-8 33-2241 Chiquita Savings and Investment Plan
33-16801
33-42733
33-56572
S-8 33-14254 1986 Stock Option and Incentive Plan
33-38284
33-41069
33-53993
S-8 33-25950 Individual Stock Option Plan
S-8 33-38147 Associate Stock Purchase Plan
</TABLE>
Cincinnati, Ohio /s/ERNST & YOUNG LLP
March 25, 1996
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned officers and directors of Chiquita
Brands International, Inc. (the Company) hereby severally
constitute and appoint Fred J. Runk and William A. Tsacalis, and
each of them singly, our true and lawful attorneys and agents
with full power to them and each of them to do any and all acts
and things in connection with the preparation and filing of the
Company's Annual Report on Form 10-K for the year ended December
31, 1994 (the Report) pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange
Commission in response thereof, including specifically, but
without limiting the generality of the foregoing, the power and
authority to sign the name of the Company and the names of the
undersigned directors and officers in the capacities indicated
below to the Report, and any and all amendments and supplements
thereto and any and all other instruments and documents which
said attorneys and agents or any of them may deem necessary or
advisable in connection therewith.
Signature Title Date
(Carl H. Lindner) Director, Chairman of the March , 1995
Board of Directors, Chief
Executive Officer and Chairman
of the Executive Committee
(Principal Executive Officer)
(Keith E. Lindner) Director, President and March , 1995
Chief Operating Officer
(Fred J. Runk) Director March , 1995
/s/ Jean H. Sisco Director March 25, 1995
(Jean H. Sisco)
/s/ William W. Verity Director March 25, 1995
(William W. Verity)
/s/ Oliver W. Waddell Director March 25, 1995
(Oliver W. Waddell)
(Ronald F. Walker) Director March , 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Chiquita Brands International, Inc. Form 10-K for the year ended December 31,
1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 236,675
<SECURITIES> 34,743
<RECEIVABLES> 195,674
<ALLOWANCES> 11,310
<INVENTORY> 293,379
<CURRENT-ASSETS> 876,836
<PP&E> 1,693,129
<DEPRECIATION> 510,985
<TOTAL-ASSETS> 2,623,533
<CURRENT-LIABILITIES> 509,943
<BONDS> 1,242,046
0
138,369
<COMMON> 18,256
<OTHER-SE> 515,582
<TOTAL-LIABILITY-AND-EQUITY> 2,623,533
<SALES> 2,565,992
<TOTAL-REVENUES> 2,565,992
<CGS> 1,958,063
<TOTAL-COSTS> 1,958,063
<OTHER-EXPENSES> 98,622
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 163,513
<INCOME-PRETAX> 41,869
<INCOME-TAX> 13,900
<INCOME-CONTINUING> 27,969
<DISCONTINUED> (11,197)
<EXTRAORDINARY> (7,560)
<CHANGES> 0
<NET-INCOME> 9,212
<EPS-PRIMARY> .02<F1>
<EPS-DILUTED> .02<F1>
<FN>
<F1>Amounts include an extraordinary loss of $.14 per share from debt
refinancing in the second and fourth quarters and a loss from discontinued
operations of $.21 per share.
</FN>
</TABLE>
