3
- ------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended Commission File
March 31, 2000 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the IRS Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days. Yes X
No _____
As of May 1, 2000, there were 66,479,630 shares of Common Stock
outstanding.
Page 1 of 12 Pages
- ------------------------------------------------------------------------
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
TABLE OF CONTENTS
-----------------
Page
----
PART I - Financial Information
- ------
Item 1 - Financial Statements
<TABLE>
<CAPTION>
<S> <C> <C>
Consolidated Statement of Income for the
quarters ended March 31, 2000 and 1999 3
Consolidated Balance Sheet as of March 31, 2000,
December 31, 1999 and March 31, 1999 4
Consolidated Statement of Cash Flow for the
quarters ended March 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Analysis of Operations and
Financial Condition 9
Item 3 - Quantitative and Qualitative Disclosures
About Market Risk 10
PART II - Other Information
- -------
Item 6 - Exhibits and Reports on Form 8-K 11
Signature 12
</TABLE>
<PAGE>
PART I - Financial Information
- ------------------------------
Item 1 - Financial Statements
- -----------------------------
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
--------------------------------------------
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
------------------
2000 1999
-------- --------
<S> <C> <C>
Net sales $658,053 $693,002
-------- --------
Operating expenses
Cost of sales 498,005 514,775
Selling, general and administrative 69,700 78,738
Depreciation 22,560 22,265
-------- --------
590,265 615,778
-------- --------
Operating income 67,788 77,224
Interest income 3,105 2,289
Interest expense (31,966) (26,693)
Other income, net 63 88
-------- --------
Income before income taxes 38,990 52,908
Income taxes (4,000) (4,200)
-------- --------
Net income $ 34,990 $ 48,708
======== ========
Earnings per common share:
Basic $ .46 $ .68
Diluted .43 .60
Dividends per common share $ -- $ .05
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
CONSOLIDATED BALANCE SHEET (Unaudited)
-------------------------------------
(In thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
- ------
Current assets
Cash and equivalents $ 80,394 $ 97,863 $ 97,902
Trade receivables (less
allowances of $12,009,
$12,214 and $10,316) 233,915 209,741 239,884
Other receivables, net 159,514 151,457 117,217
Inventories 386,302 421,806 353,272
Other current assets 34,719 22,000 32,550
------------ ------------ ------------
Total current assets 894,844 902,867 840,825
Property, plant and equipment,
net 1,173,002 1,177,823 1,121,376
Investments and other assets 337,035 333,257 367,192
Intangibles, net 180,370 182,180 189,101
------------ ------------ ------------
Total assets $ 2,585,251 $ 2,596,127 $ 2,518,494
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Notes and loans payable $ 102,801 $ 89,519 $ 137,040
Long-term debt due within
one year 204,918 40,235 101,335
Accounts payable 215,845 217,327 240,363
Accrued liabilities 104,746 141,341 99,638
------------ ------------ ------------
Total current liabilities 628,310 488,422 578,376
Long-term debt of parent company 771,944 883,815 683,420
Long-term debt of subsidiaries 279,436 343,186 245,037
Accrued pension and other employee
benefits 60,119 68,162 86,375
Other liabilities 109,978 107,256 90,124
------------ ------------ ------------
Total liabilities 1,849,787 1,890,841 1,683,332
------------ ------------ ------------
Shareholders' equity
Preferred and preference stock 253,475 253,475 253,475
Common stock, $.01 par value
(66,444,064, 65,921,791 and
65,734,685 shares) 664 659 657
Capital surplus 765,139 761,079 758,935
Accumulated deficit (272,893) (303,607) (173,817)
Accumulated other comprehensive
loss (10,921) (6,320) (4,088)
------------ ------------ ------------
Total shareholders' equity 735,464 705,286 835,162
------------ ------------ ------------
Total liabilities and
shareholders' equity $ 2,585,251 $ 2,596,127 $ 2,518,494
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
-----------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
---------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash provided (used) by:
Operations
Net income $ 34,990 $ 48,708
Depreciation and amortization 24,225 23,869
Changes in current assets and
liabilities and other (60,565) (54,171)
--------- ---------
Cash flow from operations (1,350) 18,406
--------- ---------
Investing
Capital expenditures (18,290) (23,744)
Hurricane Mitch insurance proceeds -- 25,000
Refundable deposits for container
equipment -- 9,051
Long-term investments (2,124) (6,132)
Other 3,753 (2,663)
--------- ---------
Cash flow from investing (16,661) 1,512
--------- ---------
Financing
Debt transactions
Repayments of long-term debt (10,123) (9,229)
Increase in notes and loans
payable 14,941 5,816
Stock transactions
Issuances of common stock -- 49
Dividends (4,276) (7,558)
--------- ---------
Cash flow from financing 542 (10,922)
--------- ---------
Increase (decrease) in cash and
equivalents (17,469) 8,996
Balance at beginning of period 97,863 88,906
--------- ---------
Balance at end of period $ 80,394 $ 97,902
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
-----------------------------------------------------
Interim results are subject to significant seasonal variations and are
not necessarily indicative of the results of operations for a full
fiscal year. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary for a fair
statement of the results of the interim periods shown have been made.
See Notes to Consolidated Financial Statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999 for
additional information relating to the Company's financial statements.
Earnings Per Share
- ------------------
Basic and diluted earnings per common share ("EPS") are calculated as
follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Quarter Ended
March 31,
------------------
2000 1999
------- -------
<S> <C> <C>
Net income $34,990 $48,708
Dividends on preferred and preference stock (4,276) (4,276)
------- -------
Net income attributed to common shares
for basic EPS 30,714 44,432
Add back dividends on preferred and
preference stock 4,276 4,276
------- -------
Net income attributed to common shares
for diluted EPS $34,990 $48,708
======= =======
Weighted average common shares outstanding
(shares used to calculate basic EPS) 66,266 65,618
Convertible preferred and preference stock 15,479 15,479
Stock options and other stock awards 112 215
------- -------
Shares used to calculate diluted EPS 81,857 81,312
======= =======
Basic EPS $ .46 $ .68
Diluted EPS .43 .60
</TABLE>
The assumed conversion to common stock of the Company's 7% convertible
subordinated debentures would have an anti-dilutive effect on diluted
EPS and, therefore, has not been included in the computation.
6
<PAGE>
Segment Information (in thousands)
- ---------------------------------
Financial information for the Company's business segments follows:
<TABLE>
<CAPTION>
Quarter Ended
March 31,
--------------------------
2000 1999
------------ ------------
<S> <C> <C>
Net sales
Fresh Produce $ 524,563 $ 573,261
Processed Foods 133,490 119,741
------------ ------------
$ 658,053 $ 693,002
============ ============
Operating income
Fresh Produce $ 62,787 $ 71,706
Processed Foods 5,001 5,518
------------ ------------
$ 67,788 $ 77,224
============ ============
Inventories (in thousands)
- --------------------------
March 31, December 31, March 31,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
Fresh produce $ 48,275 $ 39,762 $ 47,319
Processed food products 164,102 215,365 139,455
Growing crops 107,049 104,699 109,992
Materials, supplies and
other 66,876 61,980 56,506
------------ ----------- ------------
$ 386,302 $ 421,806 $ 353,272
============ ============ ============
</TABLE>
Hedging
- -------
Chiquita has a long-standing policy of periodically hedging transactions
denominated in foreign currencies. At March 31, 2000, the Company had
euro-denominated option contracts which ensure conversion of approximately
euro 225 million of sales in 2000 at rates not lower than 1.02 dollars per
euro or higher than 1.14 dollars per euro and approximately euro 25 million
of sales in 2001 at rates not lower than .96 dollars per euro or higher than
1.12 dollars per euro. The carrying value of these option contracts at
March 31, 2000 was approximately $3 million and their fair value based on
quoted market prices was approximately $15 million.
7
<PAGE>
Comprehensive Income
- --------------------
Comprehensive income for all periods presented consisted solely of net
income and unrealized foreign currency translation losses, as follows
(in thousands):
<TABLE>
<CAPTION>
Quarter Ended
March 31,
-----------------------
2000 1999
--------- ---------
<S> <C> <C>
Net income $ 34,990 $ 48,708
Unrealized foreign currency
translation losses (4,601) (3,246)
--------- ---------
Comprehensive income $ 30,389 $ 45,462
========= =========
</TABLE>
8
<PAGE>
Item 2
- ------
CHIQUITA BRANDS INTERNATIONAL, INC.
-----------------------------------
MANAGEMENT'S ANALYSIS OF
------------------------
OPERATIONS AND FINANCIAL CONDITION
----------------------------------
Operations
- ----------
Operating income for the first quarter of 2000 was $68 million compared
to 1999 first quarter operating income of $77 million. The decrease in
first quarter earnings primarily occurred in the Company's Fresh Produce
business segment. During the first quarter of 2000, the Company continued
to reduce production and logistics infrastructure costs in its Fresh
Produce business, and began to realize benefits from its workforce
reduction program announced in late 1999. These improvements were more
than offset by the combined impact of a significantly stronger dollar
(mitigated in part by the Company's foreign currency hedging program),
higher fuel costs, and lower banana volume resulting, in part, from cool
weather early in the quarter. Since March 31, 2000, the dollar has
continued to strengthen compared to major European currencies. First
quarter operating results for the Company's Processed Foods business
segment were comparable to the prior year.
Interest expense increased in the first quarter of 2000 over the prior
year primarily as a result of higher outstanding debt balances.
The Company's effective tax rate is affected by the level and mix of
income among various domestic and foreign jurisdictions in which the
Company operates.
Financial Condition
- -------------------
Operating cash flow decreased by $20 million in the first quarter of
2000 from the prior year level primarily due to the lower earnings.
During the first quarter of 2000, capital expenditures of $18 million
included approximately $8 million to rehabilitate farms in Honduras and
Guatemala which were destroyed or damaged by Hurricane Mitch in late
1998. These farms are expected to return to full production by mid-year
2000. Early in the second quarter of 2000, the Company received an
additional $32 million of insurance proceeds related to Hurricane Mitch.
At May 1, 2000, approximately $140 million of borrowings were available
to Chiquita and its subsidiaries under committed lines of credit.
Long-term debt due within one year increased $165 million from the end
of 1999 primarily due to the reclassification from long-term debt of the
Company's 7% subordinated debentures and a bank loan to certain of the
Company's Costa Rican farm subsidiaries, both of which mature in the first
quarter of 2001. The Company expects to repay these obligations from
sources which include cash flow from operations, income tax refunds,
insurance proceeds related to Hurricane Mitch and additional financing
as necessary.
9
<PAGE>
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
Reference is made to the discussion of Chiquita's Market Risk
Management in "Management's Analysis of Operations and Financial
Condition" in the Company's 1999 Annual Report to Shareholders. As of
March 31, 2000, there were no material changes to the information
presented.
* * * * *
This quarterly report contains certain information that may be deemed
to be "forward-looking statements" within the meaning of the Private
Securities Litigation Act of 1995. This information is subject to a
number of assumptions, risks and uncertainties, including product
pricing, costs to purchase or grow (and availability of) fresh produce
and other raw materials, currency exchange rate fluctuations, natural
disasters and unusual weather conditions, operating efficiencies, labor
relations, access to capital, actions of governmental bodies, and other
market and competitive conditions, many of which are beyond the control
of Chiquita. Actual results or developments may differ materially from
the expectations expressed or implied in the forward-looking
information.
10
<PAGE>
PART II - Other Information
- ---------------------------
Item 6 - Exhibits and Reports on Form 8-K
-----------------------------------------
<TABLE>
<CAPTION>
Page
Number(s)
---------
<S> <C>
(a) Exhibit 10 - Chiquita Brands International,
Inc. Capital Accumulation Plan, effective
January 1, 2000 **
Exhibit 27 - Financial Data Schedule **
** Omitted from this copy of Quarterly Report
on Form 10-Q. Copy included in report filed
electronically with the Securities and Exchange
Commission.
(b) The Company has filed the following report on
Form 8-K since December 31, 1999:
February 7, 2000 - to file Amendment No. 4 and
related agreements to the Company's Credit Agreement
dated December 31, 1996.
</TABLE>
11
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/ William A. Tsacalis
-----------------------------
William A. Tsacalis
Vice President and Controller
(Chief Accounting Officer)
May 12, 2000
12
CHIQUITA BRANDS INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
Adopted by the Employee Benefits Committee of
Chiquita Brands International, Inc.
on May 2, 2000
<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
Effective as of January 1, 2000, Chiquita Brands International, Inc.
(the "Sponsoring Company") has established the Chiquita Brands
International, Inc. Capital Accumulation Plan (the "Plan") on behalf of
selected employees of the Sponsoring Company and any Affiliated
Companies which adopt the Plan with the permission of the Sponsoring
Company, all in accordance with the terms and conditions set forth
below.
SECTION ONE
PURPOSE OF PLAN
A. DESIGNATION. The Plan is designated the "Chiquita Brands
International, Inc. Capital Accumulation Plan."
B. PURPOSE. The purpose of the Plan is to provide retirement,
disability, death and employment termination benefits for a select group
of management and highly compensated employees of the Participating
Companies and for the beneficiaries of those employees. The Plan is
intended to be a non-qualified plan of executive deferred compensation,
exempt from the requirements of Title I of ERISA.
C. VOLUNTARY PARTICIPATION. An Employee who completes the
eligibility requirements set forth in Section Three of the Plan may
voluntarily elect to participate in the Plan by notifying the
Administrative Committee as described in Paragraph A of Section Seven.
<PAGE>1
SECTION TWO
DEFINITIONS
As used in the Plan:
"Accounts" shall mean a Participant's Basic Match Contribution Account,
his Deferral Contribution Account, his Incremental Match Contribution
Account, his Savings Plan Restoration Match Contribution Account, his
Predecessor Account, and, if applicable, his Deemed Participation
Contribution Account. The term "Accounts" shall also include any
additional accounts established by the Administrative Committee, in its
sole discretion.
"Administrative Committee" shall mean the Chiquita Brands
International, Inc. Employee Benefits Committee which has been appointed
to administer the Plan in accordance with the provisions of Section Five
of the Plan. Notwithstanding the foregoing, "Administrative Committee"
may also include any individual or committee to which the Administrative
Committee has delegated authority to act with respect to a specific
activity. The Administrative Committee shall be the "named fiduciary,"
as referred to in Section 402(a) of ERISA, with respect to the
management, operation and administration of the Plan.
"Affiliated Company" or "Affiliated Companies" shall mean (i) a member
of a controlled group of corporations of which the Sponsoring Company is
a member, as determined in accordance with Section 414(b) of the
Internal Revenue Code and the regulations
<PAGE>2
issued thereunder, (ii) a trade or business which is under common
control with the Sponsoring Company, as determined in accordance with
Section 414(c) of the Internal Revenue Code and the regulations issued
thereunder, or (iii) a member of an affiliated service group of which
the Sponsoring Company is a member, as determined in accordance with
Section 414(m) of the Internal Revenue Code. In addition, "Affiliated
Company" shall also include any other entity designated by the Board of
Directors of the Sponsoring Company in its sole discretion.
"Basic Match Contribution" shall mean the cumulative amount the
Participating Company contributes to the Trust each Plan Year on behalf
of a Participant, as described in Paragraph B of Section Seven of the
Plan.
"Basic Match Contribution Account" shall mean the account maintained
for a Participant reflecting the Basic Match Contributions allocated to
such Participant pursuant to Paragraph B of Section Seven, as adjusted
by earnings or losses thereon in accordance with the provisions of
Section Six.
"Beneficiary" shall mean any person entitled to receive benefits which
are payable upon or after a Participant's death pursuant to Section Ten
of the Plan.
"Board of Directors" shall mean the Board of Directors of the
Sponsoring Company or the Board of Directors of a Participating Company,
as the case may be, or any individual or committee to which the Board of
Directors has delegated authority to act with respect to a specific
activity.
<PAGE>3
"Bonus" shall mean any amount payable as a bonus in the Plan Year to an
Employee, other than severance bonuses, to the extent that such amount is
classified as a "Bonus" for purposes of this Plan and is payable pursuant
to a program which has been specifically identified by an authorized
representative of the Sponsoring Company as eligible for consideration as a
Bonus hereunder. The Bonus amount will be increased by any amounts with
respect to which the Employee has elected to defer or reduce such Bonus for
federal income tax purposes (i) under this Plan, (ii) under a Savings Plan
or (iii) under any "cafeteria plan," dependent care assistance program or
qualified transportation fringe benefit program (as described in Sections
125, 129 and 132 of the Internal Revenue Code) maintained by the
Participating Companies. Bonus shall not include any amounts paid to the
Employee pursuant to a program which has not been identified as eligible
for consideration as the source of a Bonus for purposes of this Plan.
"Change of Control" shall mean the occurrence of any of the following
events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than an Exempt Holder or Exempt Entity, is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
<PAGE>4
directly or indirectly, of 30% or more of the total voting power of all of
the Sponsoring Company's voting securities then outstanding ("Voting
Shares"), provided, that Exempt Holders "beneficially own" (as so defined),
on a combined basis, a lesser percentage of the Voting Shares than such
other person and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the Board of
Directors of the Company;
(ii) on any date, the individuals who constituted the Sponsoring Company's
Board of Directors at the beginning of the two-year period immediately
preceding such date (together with any new directors whose election by the
Sponsoring Company's Board of Directors, or whose nomination for election
by the Sponsoring Company's shareholders, was approved by a vote of at
least two-thirds of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the directors then in office; or
(iii) immediately after a merger or consolidation of the Sponsoring
Company or any subsidiary of the Sponsoring Company with or into, or the
sale or other disposition of all or substantially all of the Sponsoring
Company's assets to, any other corporation, (a) the Voting Shares of the
Sponsoring Company outstanding immediately prior to such transaction do not
represent (either by remaining outstanding or by being converted
<PAGE>5
into voting securities of the surviving or acquiring entity or any parent
thereof) more than 50% of the total voting power of the voting securities
of the Sponsoring Company or surviving or acquiring entity or any parent
thereof outstanding immediately after such merger or consolidation; and (b)
either (x) a person or group (other than an Exempt Entity) beneficially
owns a percentage of the total voting power of the Sponsoring Company or
surviving or acquiring entity or any parent thereof which exceeds both 20%
and the percentage owned, on a combined basis, by the Exempt Holders or (y)
the Exempt Holders beneficially own, on a combined basis, less than 2% of
such voting power. In the case of a Participating Company other than the
Sponsoring Company, "Change of Control" shall mean (i) such Participating
Company ceasing to be a direct or indirect subsidiary of the Sponsoring
Company (or its successor entity) or (ii) a sale of substantially all of
such Participating Company's assets to an entity other than the Sponsoring
Company (or its successor entity) or one or more of its subsidiaries.
"Company Contribution Account" shall mean the account maintained for a
Participant reflecting contributions made by a Participating Company which
are allocated to such Participant pursuant to Section Seven of the Plan, as
adjusted for earnings or losses thereon in accordance with the provisions
of Section Six of the Plan. A Participant's Company Contribution Account
shall consist of the following subaccounts where applicable: (i) a Basic
Match Contribution Account, (ii) a Deemed Participation
<PAGE>6
Match Contribution Account, (iii) a Savings Plan Restoration Match
Contribution Account and (iv) an Incremental Match Contribution Account.
All references in the Plan or Trust Agreement to "Company Contribution
Account" shall, where appropriate, be deemed to constitute a reference to
the above-referenced subaccounts.
"Compensation" shall mean an Employee's Salary and Bonus payable by a
Participating Company during a Plan Year.
"Deemed Participation Match Contribution" shall mean the credit made to
the ledger account maintained by a Participating Company on behalf of a
Participant who had attained age forty-five (45) prior to the Effective
Date which reflects the hypothetical Basic Match Contributions and
Incremental Match Contributions which would have been made to the Trust on
behalf of the Participant between the Participant's Index Date and the
Effective Date, had the Plan been in effect during such period of time,
subject to the further limitations described in Paragraph E of Section
Seven of the Plan.
"Deemed Participation Match Contribution Account" shall mean the ledger
account maintained by a Participating Company on behalf of a Participant
reflecting the Deemed Participation Match Contributions allocated to such
Participant pursuant to Paragraph E of Section Seven.
"Deferral Contribution" shall mean the cumulative amount the
Participating Company contributes to the Trust each Plan Year on behalf of
a Participant equal to the amount by which a
<PAGE>7
Participant elected to reduce his Compensation for such Plan Year pursuant
to Paragraph A of Section Seven.
"Deferral Contribution Account" shall mean the account maintained for a
Participant reflecting the Deferral Contributions allocated to such
Participant pursuant to Paragraph A of Section Seven, as adjusted by
earnings or losses thereon in accordance with the provisions of Section Six
of the Plan.
"Effective Date" of the Plan shall mean January 1, 2000.
"Eligible Participant" shall be used in the context of determining which
Participants are eligible to receive Incremental Match Contributions and
Savings Plan Restoration Match Contributions and shall mean any Participant
who (i) was employed by a Participating Company or an Affiliated Company on
the last day of the Plan Year, and (ii) elected, pursuant to Paragraph A of
Section Seven, to reduce his Compensation with respect to such Plan Year.
"Employee" shall mean any person employed by a Participating Company (i)
who is a "Highly Compensated Employee" determined by applying the
principles of Section 414(q) of the Internal Revenue Code, but applied as
if the person's Salary was the only compensation received from the
Participating Company, and (ii) who has either been designated as an
"Executive Officer" by the Board of Directors for purposes of Rule 3b-7
under the Exchange Act or has been designated by the Administrative
Committee as eligible to participate in the Plan. For purposes of (i),
above, an individual will be treated as satisfying such condition with
<PAGE>8
respect to the first day of a Plan Year if the individual's current Salary
equals or exceeds the indexed dollar amount of compensation under Section
414(q)(1)(B)(i) as in effect on the October 1 of the immediately preceding
Plan Year. In addition, if an individual is hired during a Plan Year, such
individual will be deemed to have met the requirement of (i), above, as of
his date of hire if his current Salary equals or exceeds the indexed dollar
amount of compensation under Section 414(q)(1)(B) (i) as in effect on the
first day of such Plan Year.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. References in the Plan to any Section
of ERISA shall include any successor provision thereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Exempt Holder" shall mean American Financial Group, Inc., each of its
subsidiaries and affiliates, Carl H. Lindner, his spouse, his children and
their spouses and his grandchildren (or the legal representative of any
such person) and each trust for the benefit of each such person.
"Exempt Entity" means (i) an institution that is entitled under Rule
13(d)-1 of the Exchange Act (or any successor rule or regulation) to report
its ownership of equity securities of the Sponsoring Company through the
filing of a statement on Schedule 13G under the Exchange Act, in lieu of
Schedule 13D, for so long as such institution remains so entitled, (ii) an
underwriter
<PAGE>9
temporarily holding securities pursuant to an offering of such securities,
(iii) the Sponsoring Company, any of its subsidiaries or any employee
benefit plan (or related trust) sponsored or maintained by the Sponsoring
Company or any of its subsidiaries, and (iv) the surviving or acquiring
entity (and the direct and indirect wholly owning parents thereof) in a
merger, consolidation, sale or disposition transaction of the type referred
to in clause (iii) of the definition of a Change of Control provided such
transaction has not resulted in a Change in Control due to failure to
satisfy the conditions of subclause (a) or subclause (b) of said clause
(iii).
"Incremental Match Contribution" shall mean the cumulative amount the
Participating Company contributes to the Trust each Plan Year on behalf of
an Eligible Participant described in Paragraph C of Section Seven of the
Plan.
"Incremental Match Contribution Account" shall mean the account maintained
for a Participant reflecting the Incremental Match Contribution allocated
to such Participant pursuant to Paragraph C of Section Seven, as adjusted
by earnings or losses thereon in accordance with the provisions of Section
Six of the Plan.
"Incremental Years" shall mean, with respect to a Participant, the whole
number of Plan Years in the sequence which begins with the Participant's
Index Year and ends with the then-current Plan Year, inclusive.
<PAGE>10
"Index Date" shall mean, in the case of Participant who is employed on
the Effective Date and who has attained 45 on or before the Effective Date,
the first day of the Calendar Year in which such Participant attained age
45. In the case of a Participant who is employed on the Effective Date and
has not yet attained age 45 as of the Effective Date, the term Index Date
means the first day of the Calendar Year in which the Participant attains
the age of 45 plus "n" where "n" equals the number of years from the
beginning of the Participant's first year of participation in this Plan
prior to the year in which the Participant attains age 45. In the case of
a Participant who is hired after the Effective Date, and who attains age 45
prior to becoming a Participant in the Plan, the Index Date shall be the
first day of the Calendar Year in which the Participant attained age 45.
In the case of a Participant who is hired after the Effective Date and who
has not attained age 45 prior to commencing participation in the Plan, the
Index Date shall be the first day of the Calendar Year in which the
executive attains age 45 plus "n" where "n" equals the number of years, if
any, from the beginning of the Participant's first year of participation in
this Plan prior to the year in which the Participant attains age 45.
"Index Year" shall mean, with respect to a Participant, the Plan Year that
includes such Participant's Index Date.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. References in the Plan to
<PAGE>11
any Section of the Internal Revenue Code shall include any successor
provision thereto.
"Investment Election" shall mean the form, filed with the Administrative
Committee, or its delegate, or such other procedure as may be specified by
the Administrative Committee at any time, and from time to time, through
which a Participant may designate the manner in which his Accounts shall be
allocated among the Investment Funds.
"Investment Election Date" shall mean the first business day of each
month.
"Investment Fund" shall mean each fund, contract, or other arrangement
designated by the Administrative Committee as an Investment Fund in which
Participants may direct their Accounts to be invested.
"Participant" shall mean an Employee who becomes a Participant in the Plan
as provided in Section Four of the Plan.
"Participating Company" shall mean the Sponsoring Company, or any
Affiliated Company which the Sponsoring Company designates as having
adopted the Plan and Trust pursuant to the provisions of Section Twenty of
the Plan.
"Plan" shall mean the Chiquita Brands International, Inc. Capital
Accumulation Plan as set forth in this document, and as hereafter amended.
"Plan Year" shall mean the twelve (12)-consecutive month period ending on
December 31.
<PAGE>12
"Predecessor Account" shall mean the amount in a Participant's 1999 Plan
Year deferred compensation account under the Chiquita Brands International,
Inc. Deferred Compensation Plan or the American Produce Company Deferred
Compensation Plan, as applicable, which such Participant elected to
transfer to this Plan as of January 1, 2000, as adjusted for earnings or
losses thereon in accordance with the provisions of Section Six of the
Plan. The amounts allocated to a Participant's Predecessor Account shall
be subject to all of the rules and procedures in this Plan which apply to a
Participant's Deferral Contribution Account, except that all prior
elections regarding the term of deferral and form of distribution of such
1999 Plan Year deferred compensation account shall remain in effect for
purposes of this Plan. This amount shall not be considered a Deferral
Contribution for purposes of the Basic Match Contribution, the Incremental
Match Contribution, the Savings Plan Restoration Match Contribution or the
Deemed Participation Match Contribution.
"Retirement Date" of a Participant shall mean the later of (i)
Participant's fifty-fifth (55th) birthday, or (ii) the date upon which a
Participant completes ten (10) Years of Service commencing with the
calendar year in which the Participant attains his forty-fifth (45th)
birthday.
"Salary" shall mean basic cash compensation before any payroll deductions
for taxes or any other purposes, payable by a Participating Company to an
Employee in respect of such
<PAGE>13
Employee's service for a Participating Company during the Plan Year
increased by any amounts with respect to which the Employee has elected to
defer or reduce remuneration for federal income tax purposes (i) under this
Plan, (ii) under a Savings Plan or (iii) under any "cafeteria plan",
dependent care assistance program or qualified transportation fringe
benefit program (as described in Sections 125, 129 and 132 of the Internal
Revenue Code) maintained by the Participating Companies. Salary shall not
include any amounts paid to the Employee as (i) overtime pay, (ii) any
imputed income, severance pay and special allowances or other amounts not
considered as a part of base salary for time actually worked, (iii) any
amounts paid during a Plan Year on account of the Employee under this Plan
or under any other employee pension benefit plan (as defined in Section
3(2) of ERISA), and (iv) except as otherwise provided in the preceding
sentence, any amounts which are not includible in the Employee's income for
applicable income tax purposes.
"Savings Plan" shall mean the Chiquita Savings and Investment Plan and any
other qualified or nonqualified retirement program maintained by any
Participating Company into which employee contributions and employer
matching contributions may be made.
"Savings Plan Restoration Match Contribution" shall mean the cumulative
amount the Participating Company contributes to the Trust each Plan Year as
described in Paragraph D of Section Seven of the Plan.
<PAGE>14
"Savings Plan Restoration Match Contribution Account" shall mean the
account maintained for a Participant reflecting the Savings Plan
Restoration Match Contribution allocated to such Participant pursuant to
Paragraph D of Section Seven, as adjusted by earnings or losses thereon in
accordance with the provisions of Section Six of the Plan.
"Sponsoring Company" shall mean Chiquita Brands International, Inc.
"Total and Permanent Disability" shall mean physical and/or mental
incapacity of such a nature that it prevents a Participant from engaging in
or performing the principal duties of his customary employment or
occupation on a continuing or sustained basis.
"Trust" shall mean the entity established pursuant to a Chiquita Brands
International, Inc. Capital Accumulation Plan Trust Agreement between the
Sponsoring Company and a trustee selected by the Administrative Committee
from time to time.
"Valuation Date" shall mean the last day of each month or any other date
the Administrative Committee, in its sole discretion, shall select as a
Valuation Date.
"Year of Service" shall mean a twelve (12) month period beginning on a
Participant's initial date of hire and on successive anniversaries of such
date during which the Participant is treated by the Sponsoring Company or
any Affiliated Company as continuously employed.
<PAGE>15
Wherever appropriate, words used in the Plan in the singular may mean the
plural, the plural may mean the singular, and the masculine may mean the
feminine.
SECTION THREE
REQUIREMENTS FOR ELIGIBILITY
Any Employee shall be eligible to elect to have Deferral Contributions
made on his behalf under the Plan and to share in the allocations of Basic
Match Contributions and, if applicable, Deemed Participation Match
Contributions, Savings Plan Restoration Match Contributions and Incremental
Match Contributions under the Plan. Any Participant who has made an
election to make Deferral Contributions under this Plan, who incurs a
termination of employment, and who is subsequently rehired by a
Participating Company, shall automatically become eligible to elect to have
Deferral Contributions made on his behalf under the Plan effective as of
the date of his rehire. In such case the Participant's Incremental Years
for purposes of computing Incremental Match Contributions and the post-date
of hire service for purposes of computing the portion of any Deemed
Participation Match Contributions earned by the Participant will be
adjusted to exclude the years of the break in service and Years of Service
for vesting purposes will be adjusted in accordance with the principles
applying to qualified plans under the Internal Revenue Code.
<PAGE>16
SECTION FOUR
PARTICIPATION IN THE PLAN
Within thirty (30) days after meeting the eligibility requirements of
Section Three, each Employee shall be notified that he is eligible to
participate in the Plan and shall be provided with such election forms as
may be required to initiate such participation and any other applicable
information.
In addition, an Employee who enrolls in the Plan as of the Effective Date
may elect, pursuant to such procedures as the Administrative Committee may
determine, to have a Predecessor Account established on his behalf with
respect to the 1999 Plan Year deferred compensation attributable to the
Chiquita Brands International, Inc. Deferred Compensation Plan or the
American Produce Company Deferred Compensation Plan. Finally, each
Employee who becomes a Participant shall be provided with a designation of
beneficiary form with which he may designate one or more Beneficiaries to
receive benefits in the event of his death.
Elections to participate in the Plan by individuals who qualify as
Employees as of the first day of any Plan Year must be made no later than
November 15 of the immediately preceding Plan Year except that (i) with
respect to the Plan Year which begins January 1, 2000, such election must
be made no later than December 15, 1999, and (ii) with respect to the Plan
Year in which an individual is initially hired and first qualifies as an
Employee and therefore becomes eligible to participate in the
<PAGE>17
Plan, such election must be made within sixty (60) days of the date on
which such individual was notified of his eligibility and such election
shall be effective as of the first payroll period following its receipt and
processing by the Administrative Committee.
The Administrative Committee may, in its sole discretion, establish at any
time procedures to effectuate the enrollment during a Plan Year of an
individual who is promoted during the Plan Year into a position which
qualifies the individual as an Employee with respect to such Plan Year.
Any Employee who does not elect to have Deferral Contributions made on his
behalf under the Plan as of the first date on which he is first eligible
shall be allowed to make a subsequent election to have Deferral
Contributions made on his behalf as of the January 1 of any subsequent Plan
Year, provided that such individual so notifies the Administrative
Committee no later than November 15 of the immediately preceding Plan Year,
pursuant to such notification procedures as the Administrative Committee
may establish, from time to time.
SECTION FIVE
ADMINISTRATION OF THE PLAN
A. RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN. The Administrative
Committee shall be responsible for the management, operation and
administration of the Plan.
<PAGE>18
B. APPOINTMENT OF ADMINISTRATIVE COMMITTEE. The Board of Directors of
the Sponsoring Company has appointed the Chiquita Brands International,
Inc. Employee Benefits Committee to be the Administrative Committee
hereunder. The Administrative Committee shall be responsible for the
management, operation and administration of the Plan. Any member of the
Administrative Committee may resign by delivering written notice to the
Board of Directors of the Sponsoring Company. The Board of Directors of
the Sponsoring Company shall be authorized to remove any member of the
Administrative Committee at any time and in its sole discretion to appoint
a successor whenever a vacancy on the Administrative Committee occurs.
C. DELEGATION OF POWERS. The Administrative Committee may appoint such
assistants or representatives as it deems necessary for the effective
exercise of its duties in administering the Plan. The Administrative
Committee may delegate to such assistants and representatives any powers
and duties, both ministerial and discretionary, as it deems expedient or
appropriate.
D. RECORDS. All acts and determinations with respect to the
administration of the Plan made by the Administrative Committee and any
assistants or representatives appointed by it shall be duly recorded by the
Administrative Committee or by the assistant or representative appointed by
it to keep such records. All records, together with such other documents
as may be necessary for the administration of the Plan, shall be preserved
<PAGE>19
in the custody of the Administrative Committee or the assistants or
representatives appointed by it.
E. GENERAL ADMINISTRATIVE POWERS. The Administrative Committee shall
have all powers necessary to administer the Plan in accordance with its
terms, including the power to construe the Plan and to determine all
questions that may arise thereunder. In the exercise of such powers under
the Plan, the Administrative Committee shall have discretionary authority
to interpret the terms of the Plan and to determine eligibility for and
entitlement to Plan benefits in accordance with the terms of the Plan. Any
interpretation or determination made pursuant to such discretionary
authority shall be given full force and effect, unless such interpretation
or determination is made after a Change in Control and is shown to be
unreasonable, arbitrary or capricious.
F. APPOINTMENT OF PROFESSIONAL ASSISTANCE AND INVESTMENT MANAGER. The
Administrative Committee may engage accountants, attorneys, physicians and
such other personnel as it deems necessary or advisable. The functions of
any such persons engaged by the Administrative Committee shall be limited
to the specific services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under
the Plan. Such persons shall exercise no discretionary authority or
discretionary control respecting the management of the Plan. The fees and
costs of such services shall be paid by the Participating Companies.
<PAGE>20
G. ACTIONS BY THE ADMINISTRATIVE COMMITTEE. All actions of the
Administrative Committee shall be taken pursuant to the decision of a
majority of the then members of the Administrative Committee.
H. DISCRETIONARY ACTS. In the event the Administrative Committee
exercises any discretionary authority under the Plan with respect to a
Participant who is a member of the Administrative Committee, such
discretionary authority shall be exercised solely and exclusively by those
members of the Administrative Committee other than such Participant, or, if
such Participant is the sole member of the Administrative Committee, such
discretionary authority shall be exercised solely and exclusively by the
Board of Directors of the Sponsoring Company.
I. PAYMENT OF FEES AND EXPENSES. The members of the Administrative
Committee and their assistants and representatives shall be entitled to
payment from the Participating Companies for all reasonable costs, charges
and expenses incurred in the administration of the Plan, including, but not
limited to, reasonable fees for accounting, legal and other services
rendered, to the extent incurred by the members of the Administrative
Committee or their assistants and representatives in the course of
performance of their duties under the Plan. J. PLAN ADMINISTRATOR.
The Sponsoring Company shall be the "administrator" (as defined in Section
3(16)(A) of ERISA) of the Plan. The Vice President of Human Resources of
the
<PAGE>21
Sponsoring Company shall be the designated agent for service of legal
process.
K. ALLOCATION AND DELEGATION OF ADMINISTRATIVE COMMITTEE
RESPONSIBILITIES. The Administrative Committee may upon approval of a
majority of the members of the Administrative Committee, (i) allocate among
any of the members of the Administrative Committee any of the
responsibilities of the Administrative Committee under the Plan or (ii)
designate any person, firm or corporation that is not a member of the
Administrative Committee to carry out any of the responsibilities of the
Administrative Committee under the Plan. Any such allocation or
designation shall be made pursuant to a written instrument executed by a
majority of the members of the Administrative Committee.
SECTION SIX
PARTICIPANTS' ACCOUNTS
A. MAINTENANCE OF ACCOUNTS. There shall be maintained on behalf of each
Participant a Basic Match Contribution Account, an Incremental Match
Contribution Account, a Deferral Contribution Account, a Savings Plan
Restoration Match Contribution Account, a Predecessor Account and, if
applicable, a Deemed Participation Match Contribution Account. The
Participant's interest in his Company Contribution Accounts shall be
subject to the vesting schedule set forth in Paragraph A of Section Eleven.
The
<PAGE>22
Participant's interest in his Deferral Contribution Account and
Predecessor Account shall be one hundred percent (100%) vested at all
times. All payments to a Participant or his Beneficiaries shall be charged
against the respective Accounts of such Participant.
B. ACCOUNTS OF PARTICIPANT TRANSFERRED TO AN AFFILIATED Company. If a
Participant is transferred to an Affiliated Company which has not adopted
the Plan, the amounts which are credited to his Accounts shall continue to
be governed by the provisions of the Plan.
C. ADJUSTMENT OF PARTICIPANTS' ACCOUNTS. Promptly after the last day of
each Plan Year or such other dates no less frequently than annually as the
Administrative Committee shall decide, the Administrative Committee or its
delegate shall adjust the Accounts of each Participant (other than a
Participant's Deemed Participation Match Contribution Account) so that the
amount of net income, loss, appreciation or depreciation in the value of
the amount invested in an Investment Fund shall be allocated equitably and
exclusively to the Accounts of the Participants invested in such Investment
Fund. Promptly after the last day of each Plan Year, the Administrative
Committee shall adjust the Deemed Participation Match Contribution Account
of each Participant by the amount of interest specified in Paragraph E of
Section Seven.
<PAGE>23
D. INVESTMENT OF CONTRIBUTIONS.
(i) PARTICIPANT-DIRECTED INVESTMENTS. In accordance with procedures
established by the Administrative Committee, each Participant shall have
the opportunity, at the time of enrollment for a Plan Year and subsequently
on or before each Investment Election Date, to make an Investment Election
with the Administrative Committee or its delegate, which shall apply to all
of the Participant's Accounts for all or any specified Plan Year or Plan
Years other than his Deemed Participation Match Contribution Account which
will be credited with interest as specified in Paragraph E of Section
Seven. This election shall be effective beginning on the Investment
Election Date following its receipt by the Administrative Committee, or its
delegate, and shall continue in effect until revoked or modified as of a
subsequent Investment Election Date. The following restrictions shall
apply to such investment elections:
(a) No election may be made in violation of any applicable
investment contract or other agreement establishing an Investment Fund, and
(b) Transfers among the available Investment Funds may be
made only in whole percentage multiples of one percent (1%) of the balances
therein.
In addition, the Administrative Committee, in its sole discretion, may
from time to time establish special Investment Election Dates to provide
the Participants with additional
<PAGE>24
opportunities to designate the manner in which their Accounts shall be
allocated among the then-available Investment Funds.
(ii) OTHER INVESTMENTS. All Accounts not subject to an Investment
Election filed with the Administrative Committee pursuant to subparagraph
(i) above shall be invested in a money market fund or other liquid or
pooled fund investment vehicle selected by the Administrative Committee.
E. NO RIGHT TO SPECIFIC ASSETS. The fact that for administrative
purposes Accounts are maintained for each Participant under the Plan shall
not be deemed to segregate for such Participant, or to give such
Participant any direct interest in, any specific assets of the
Participating Companies except as otherwise provided in Section Eighteen
below.
F. PARTICIPANT STATEMENTS. Promptly after the end of each Plan Year the
Administrative Committee shall issue statements of account to each
Participant.
SECTION SEVEN
ALLOCATIONS TO PARTICIPANT'S ACCOUNTS
A. DEFERRAL CONTRIBUTIONS. Each Plan Year, the Participating Company
employing a Participant who has elected to reduce his Compensation pursuant
to subparagraph (i) of this Paragraph A shall withhold from such
Participant's Compensation the Deferral Contributions, as elected by such
Participant.
(i) DEFERRAL ELECTIONS. A Participant may elect to reduce his
Compensation by an amount of up to eighty percent
<PAGE>25
(80%) of his Salary and up to eighty percent (80%) of his Bonus provided,
however, that the aggregate amount by which a Participant may elect to
reduce his Compensation under this subparagraph (i) of Paragraph A of
Section Seven of the Plan shall not cause such Participant's Compensation
to be reduced below the amount necessary to satisfy the following
obligations:
(a) Applicable employment taxes (e.g. FICA/Medicare) on
amounts of Compensation which have been deferred;
(b) Any Federal or state tax withholding requirements relating
to any employee benefit plan and
(C) Any Federal or state tax withholding requirements relating
to any taxable remuneration payable to the Participant.
Such contributions shall be made through regular payroll deductions by
notifying the Administrative Committee, no later than the November 15th of
the Year preceding the Plan Year for which such election is intended to
become effective pursuant to such notification procedures as the
Administrative Committee may establish, from time to time. In addition,
any or all of the dates referenced in the preceding sentence may be
modified by the Administrative Committee at any time and from time to time.
A Participant may make separate elections with respect to his Salary and
his Bonus. The most recent election shall remain in effect for the entire
Plan Year until suspended or revoked pursuant to subparagraph (ii) of this
Paragraph A and, unless
<PAGE>26
revoked, shall remain in effect for subsequent Plan Years unless a new
election is made for any such subsequent Plan Year.
(ii) SUSPENSION OF REDUCTIONS. A Participant may not elect to
suspend any Deferral Contributions which relate to an eligible Bonus which
is subject to any existing deferral election. A Participant may, however,
elect to suspend his Deferral Contributions which relate to his Salary for
a Plan Year within such Plan Year by notifying the Administrative Committee
no later than thirty (30) days prior to the first applicable payroll period
as of which such election is intended to become effective, pursuant to such
notification procedures as the Administrative Committee may establish, from
time to time. Any such suspension shall remain in effect for the remainder
of the Plan Year in which such suspension election is made and the
Participant will be further suspended from making any new Deferral
Contributions with respect to his Salary during the following Plan Year.
During such period of suspension, the Deferral Contributions of such
Participant relating to Salary shall be suspended. A Participant may not
make up suspended Deferral Contributions. The Deferral Contributions of a
Participant shall be suspended automatically for any payroll period in
which such Participant does not receive any Compensation.
(iii) METHOD OF ALLOCATING DEFERRAL CONTRIBUTIONS. Each
Participant who elected to reduce his Compensation during a Plan Year
pursuant to the provisions of this Paragraph A shall receive
<PAGE>27
an allocation of Deferral Contributions to his Deferral Contribution
Account for such Plan Year equal to the amount by which he elected to
reduce and has in fact reduced his Compensation for such Plan Year pursuant
to the provisions of this Paragraph A. Such allocations shall be credited
to the Participant's Deferral Contribution Account and made to the Trust as
soon as practicable but in no event more than 30 days after they are
deducted from Participant's Salary or Bonus.
B. BASIC MATCH CONTRIBUTIONS.
(i) Each Plan Year, each Participant shall receive an
allocation to his Basic Match Contribution Account for such Plan Year in an
amount such that when added to his Incremental Match Contribution under
paragraph C of this Section Seven shall equal fifty percent (50%) of the
amount of Deferral Contributions allocated to such Participant under
Paragraph A above for such Plan Year. The aggregate amount of the Basic
Match Contributions which may be allocated to each Participant's Basic
Match Contribution Account for such Plan Year under this Plan shall not
exceed six percent (6%) of his Compensation reduced by six percent (6%) of
such amount of his Salary as does not exceed the dollar limitation then in
effect under Section 401(a)(17) of the Internal Revenue Code (which
reduction amount is a 'deemed contribution' made on behalf of such
Participant under any Savings Plan). In no event will such a 'deemed
contribution' exceed the annual limit on elective deferrals then in effect
under Section 402(g) of the Internal Revenue Code.
<PAGE>28
(ii) The Basic Match Contribution shall be credited to the
Participant's Basic Match Contribution Account and made to the Trust
throughout the Plan Year at the same time as the Participant's Deferral
Contributions, to which such Basic Match Contributions relate, are made to
the Trust.
(iii) The Basic Match Contribution Account shall be subject to
the vesting schedule set forth in Paragraph A(iii) of Section Eleven.
C. INCREMENTAL MATCH CONTRIBUTIONS.
(i) Each Plan Year, each Eligible Participant whose Index Date
has occurred during such Plan Year or during a prior Plan Year shall
receive an allocation to his Incremental Match Contribution Account for
such Plan Year in an amount such that when added to his Basic Match
Contribution under paragraph B of this Section Seven shall equal fifty
percent (50%) of the amount of Deferral Contributions allocated to such
Eligible Participant under Paragraph A above for such Plan Year.
Notwithstanding the above, the aggregate amount of Incremental Match
Contributions which may be allocated to an Eligible Participant's
Incremental Match Contribution Account with respect to a Plan Year may not
exceed the multiple of (a) one percent (1%) of the Eligible Participant's
Compensation for such Plan Year, times (b) the number of the Eligible
Participant's Incremental Years as of the last day of the current Plan
Year.
(ii) As a further limitation to the amount of an Eligible
Participant's Basic and Incremental Match Contributions,
<PAGE>29
the sum of the Basic Match Contributions and the Incremental Match
Contributions with respect to any Plan Year may not exceed the lesser of
(i) Fifty Thousand Dollars ($50,000) or (ii) Fifteen Percent (15%) of the
Eligible Participant's Compensation with respect to such Plan Year.
If the application of these limitations would otherwise result in the
reduction of the Incremental Match Contributions to an amount less than
zero, such excess reduction shall instead be applied to reduce the
Participant's Basic Match Contributions.
(iii) The Incremental Match Contributions with respect to a
Plan Year shall be credited to the Eligible Participant's Incremental Match
Contribution Account and made to the Trust as soon as practicable after the
end of such Plan Year.
(iv) The Incremental Match Contribution Account shall be
subject to the vesting schedule set forth in Paragraph A (iv) of Section
Eleven.
D. SAVINGS PLAN RESTORATION MATCH CONTRIBUTIONS.
(i) Each Plan Year, each Eligible Participant whose Salary for
such Plan Year is less than the dollar limitation on compensation set forth
under Section 401(a)(17) of the Internal Revenue Code but only after taking
into account the Eligible Participant's Deferral Contributions with respect
to Salary pursuant to Paragraph A of this Section 7, shall receive an
allocation to his Savings Plan Restoration Match Contribution Account for
such Plan Year in an amount equal to six percent (6%) of the positive
difference, if any, between the amount of his
<PAGE>30
Salary which does not exceed the dollar limitation then in effect under
Section 401(a)(17) of the Internal Revenue Code and his Salary after
reduction by the amount of his Deferral Contributions with respect to
Salary pursuant to Paragraph A of this Section Seven.
(ii) The Savings Plan Restoration Match Contribution Account
shall be credited to the Eligible Participant's Savings Plan Restoration
Account and made to the Trust as soon as practicable after the end of such
Plan Year.
(iii) The Savings Plan Restoration Match Contribution Account
shall be subject to the vesting schedule set forth in Paragraph A(v) of
Section Eleven.
E. DEEMED PARTICIPATION MATCH CONTRIBUTION. On the Effective
Date, each Eligible Participant whose Index Date occurred prior to the
Effective Date and who elects to make a Deferral Contribution for the Plan
Year 2000 will receive a ledger account credit for a constructive Deemed
Participation Match Contribution with respect to each Plan Year occurring
between such Eligible Participant's Index Date and the Effective Date
computed as follows:
(i) A determination will be made of the amount of the Basic
Match Contributions and the Incremental Match Contributions which would
have been allocated to such Eligible Participant's Accounts with respect to
each Plan Year had the Plan been in effect during such Plan Year and had
the individual elected the maximum amount of permissible Deferral
Contributions with respect
<PAGE>31
to such Plan Year based on the Eligible Participant's annualized Salary
and target Bonus in effect on December 1, 1999. Such determination will
include all limitations set forth above in connection with the amount of
the Basic Match Contributions and Incremental Match Contributions.
(ii) The above amount will be reduced by an amount equal to
the actuarial equivalent computed lump-sum value of the annual accrued
benefit which the individual has earned as of the time of the computation
of such ledger credit under the terms of any defined benefit retirement-
type plan (whether tax-qualified or nonqualified) maintained by any
Participating Company. Such computation shall be made by the
Administrative Committee utilizing such reasonable methodology as it may
develop from time to time in its discretion.
(iii) The above-referenced amount will be considered earned
over a fifteen (15) year period in equal portions and each portion will be
deemed to accrue on each of the first fifteen (15) anniversaries of the
Eligible Participant's date of hire by the Sponsoring Company or any
Affiliated Company beginning with the Plan Year in which the Eligible
Participant was first hired by the Sponsoring Company or any Affiliated
Company. For the portions of the Deemed Participation Match Contribution
which are deemed to have accrued in years prior to the Effective Date, all
such portions shall be deemed to have accrued in a lump-sum on the
Effective Date without interest. After the Effective Date, the remaining
portions of the Deemed Participation Match
<PAGE>32
Contribution, if any, shall be earned as of successive anniversaries of
the Eligible Participant's date of hire throughout the remainder of such
fifteen (15)-year period in equal annual amounts computed as periodic
payments, discounted at at 10% per annum, and such amounts, as earned,
shall be credited to the ledger account on December 31 of each such year.
(iv) The accrued balance in the Eligible Participant's ledger
account shall be credited with interest on December 31 of each year at a
rate to be determined prospectively and published by the Administrative
Committee, in its discretion.
(v) The Deemed Match Contribution shall not actually be made
to the Trust but the cumulative amount credited to the Deemed Participation
Match Contribution ledger account shall instead be paid directly to the
Eligible Participant in a lump sum by the applicable Participating Company
if the Eligible Participant terminates employment after attaining his
Retirement Date and after having become vested in accordance with Paragraph
A(vi) of Section Eleven.
(vi) The entitlement of the Eligible Participant to the Deemed
Participation Match Contribution shall be subject to the vesting schedule
set forth in Paragraph A(vi) of Section Eleven.
F. PROSPECTIVE EXCLUSION. From time to time, the Administrative
Committee may, in its sole discretion, determine that the inclusion of an
Employee in the Plan jeopardizes the ability of the Plan to continue to
satisfy the requirements under
<PAGE>33
Section 201(2) of ERISA. In such an instance, the Administrative
Committee may direct the immediate distribution to such Employee of any
vested amount in his Company Contribution Accounts and Deferral
Contribution Account.
SECTION EIGHT
DISABILITY BENEFITS
A. DISABILITY RETIREMENT BENEFITS. If a Participant's employment
terminates by reason of Total and Permanent Disability while in the employ
of the Sponsoring Company or an Affiliated Company, his Company
Contribution Accounts shall fully vest (except for his Deemed Participation
Match Contribution Account which will only be paid if the Participant has
terminated employment after satisfying the conditions described in Section
Eleven A(vi)), and he shall be entitled to receive benefits equal to the
total amount in his Accounts in the Plan (except for his Deemed
Participation Match Contribution Account which will only be paid if the
Participant has terminated employment after satisfying the conditions
described in Section Eleven A(vi)), as determined in accordance with the
provisions of Paragraph A of Section Twelve hereof. Such benefits shall be
paid at the time and in the manner specified in Section Twelve of the Plan.
B. DETERMINATION OF DISABILITY. The Administrative Committee
shall determine whether a Participant has suffered a Total and Permanent
Disability and its determination in that
<PAGE>34
respect shall be binding upon the Participant. In making its
determination, the Administrative Committee may (i) require the Participant
to submit to medical examinations by doctors selected by the Administrative
Committee or (ii) rely upon a determination that the Participant is
entitled to disability benefits payable under Title II of the Social
Security Act, 42 U.S.C. 301 et. seq., or similar subsequent section, as
evidenced by a certificate of Social Security Insurance Award. The
provisions of this Section Eight shall be uniformly and consistently
applied to all Participants.
SECTION NINE
RETIREMENT BENEFITS
If a Participant is employed by the Sponsoring Company or an
Affiliated Company on his Retirement Date, his Company Contribution
Accounts shall fully vest at that time (except for his Deemed Participation
Match Contribution Account which will only be paid if the Participant
terminates employment after satisfying the conditions described in Section
Eleven A(vi)). If the Participant continues in a Participating Company's
employ after his Retirement Date, he shall continue to be eligible to
reduce his Compensation under the Plan and to share in the allocations of
Company Contributions under the Plan until his actual retirement. Upon
retirement on or after attaining his Retirement Date, a Participant shall
be entitled to receive
<PAGE>35
benefits equal to the total amount in his Accounts in the Plan (except for
his Deemed Participation Match Contribution Account which will only be paid
if the Participant terminates employment after satisfying the conditions
described in Section Eleven A(vi)) as determined in accordance with the
provisions of Paragraph A of Section Twelve hereof. Such benefits shall be
paid at the time and in the manner specified in Section Twelve of the Plan.
SECTION TEN
DEATH BENEFITS
A. DEATH BENEFITS. Upon the death of a Participant who is
employed by the Sponsoring Company or an Affiliated Company at the time of
his death, such deceased Participant's Company Contribution Accounts shall
fully vest, (except for his Deemed Participation Match Contribution Account
which will only be paid if the Participant dies after having satisfied the
conditions described in Section Eleven A(vi)) and his Beneficiary shall be
entitled to receive benefits equal to the total amount in the deceased
Participant's Accounts in the Plan (except for his Deemed Participation
Match Contribution Account which will only be paid if the Participant dies
after having satisfied the conditions described in Section Eleven A(vi)) as
determined in accordance with the provisions of Paragraph A of Section
Twelve
<PAGE>36
hereof. Upon the death of a Participant who is not employed by the
Sponsoring Company or an Affiliated Company at the time of his death, such
deceased Participant's Beneficiary shall be entitled to receive benefits
equal to the vested amount in the deceased Participant's Accounts in the
Plan as determined in accordance with the provisions of Paragraph A of
Section Eleven. In either event, such benefits shall be paid at the time
and in the manner specified in Section Twelve of the Plan.
B. DESIGNATION OF BENEFICIARIES. Each Participant may designate
one or more Beneficiaries and contingent Beneficiaries by delivering a
written designation thereof over his signature to the Administrative
Committee. A Participant may designate different Beneficiaries at any time
by delivering a new written designation over his signature to the
Administrative Committee. Any such designation shall become effective only
upon its receipt by the Administrative Committee. The last effective
designation received by the Administrative Committee shall supersede all
prior designations. A designation of a Beneficiary shall be effective only
if the designated Beneficiary survives the Participant.
C. FAILURE OF PARTICIPANT TO DESIGNATE. If a Participant fails to
designate a Beneficiary, or if no designated Beneficiary survives the
Participant, the Participant shall be deemed to have designated the
Beneficiaries then in effect under the Group Term Life Insurance Plan of
the Sponsoring Company or an Affiliated
<PAGE>37
Company, or, in the absence of any such valid designation, his estate.
D. BENEFICIARIES' RIGHTS. Whenever the rights of a Participant
are stated or limited in the Plan, his Beneficiaries shall be bound
thereby.
SECTION ELEVEN
EMPLOYMENT TERMINATION BENEFITS
A. VESTING RULES.
(i) VESTING OF DEFERRAL CONTRIBUTION ACCOUNT. A Participant
is always vested one hundred percent (100%) in his Deferral Contribution
Account.
(ii) VESTING IN COMPANY CONTRIBUTION ACCOUNTS IN SPECIAL CASES.
In the event of the termination of employment of a Participant due to
death, incurrence of Total and Permanent Disability or after attainment of
his Retirement Date or a Change in Control, such Participant shall be
entitled to receive one hundred percent (100%) of the amount in his Company
Contribution Accounts (other than the Deemed Participation Match
Contribution Account which will only be payable if the Participant
terminates employment after having satisfied the conditions described in
Section Eleven A(vi)).
(iii) VESTING OF BASIC MATCH CONTRIBUTION ACCOUNT. In the
event that the Participant terminates employment for reasons
<PAGE>38
or under circumstances other than those set forth in subparagraph (ii)
above, the vested status of the Participant's Basic Match Contribution
Account will be based upon a five-year vesting schedule wherein 20% of the
balance of the Account will become vested for each Year of Service
commencing with the Participant's initial date of hire with the Sponsoring
Company or an Affiliated Company.
(iv) VESTING OF INCREMENTAL MATCH CONTRIBUTION ACCOUNT. In
the event that the Participant terminates employment for reasons or under
circumstances other than those set forth in subparagraph (ii) above, the
vested status of the Participant's Incremental Match Contribution Account
will be based upon a schedule wherein 10% of the balance of the Account
will become vested for each Year of Service commencing with the later of
(i) the Participant's initial date of hire with the Sponsoring Company or
an Affiliated Company or (ii) the Participant's Index Date.
(v) VESTING OF SAVINGS PLAN RESTORATION MATCH CONTRIBUTION
ACCOUNT. In the event the Participant terminates employment for reasons or
under circumstances other than those set forth in subparagraph (ii) above,
the vested status of Participant's Savings Plan Restoration Match
Contribution Account will be based upon a five-year vesting schedule
wherein 20% of the balance of the Account will become vested for each Year
of Service commencing with the Participant's initial date of hire with the
Sponsoring Company or an Affiliated Company.
<PAGE>39
(vi) VESTING OF DEEMED PARTICIPATION MATCH CONTRIBUTION
ACCOUNT. A Participant will become vested in his Deemed Participation
Match Contribution ledger account on the later of (i) his attainment of his
Retirement Date or (ii) the fifth (5th) anniversary of the date of such
Participant's initial participation in the Plan. If the Participant
terminates employment for any reason prior to such Retirement Date or prior
to such fifth (5th) anniversary, the individual will have no entitlement to
receive any payments with respect to his Deemed Participation Match
Contribution.
(vii) TERMINATION FOR CAUSE. Notwithstanding the above, in
the event a Participant's employment is terminated "for cause" other than a
termination which occurs subsequent to a Change in Control, the Participant
will not be entitled to receive any payments from the Plan other than a
payment relating to his Deferral Contribution Account. For these purposes,
the term "for cause" shall mean any of the following in the judgement of
the Administrative Committee:
(a) any type of disloyalty to the Company, including,
without limitation, fraud, embezzlement, theft, or dishonesty in the course
of a Participant's employment or business relationship with the Company; or
(b) conviction of a felony or other crime involving a
breach of trust or fiduciary duty owed to the Company; or
<PAGE>40
(c) unauthorized disclosure of trade secrets or
confidential information of the Company; or
(d) a material breach of any agreement with the Company
in respect of confidentiality, non-disclosure, non-competition or
otherwise; or
(e) any serious violation of Company policy that is
materially damaging to the Company's interests.
B. COUNTING YEARS OF SERVICE. For purposes of this Section
Eleven, all Years of Service (whether or not continuous) shall be taken
into account.
C. FORFEITURE OF NON-VESTED AMOUNT. The excess of (i) the amount
in the Company Contribution Accounts of a Participant whose termination of
employment has occurred, over (ii) the vested amount in such Company
Contribution Accounts as determined in accordance with the vesting
schedules set forth in Paragraph A of this Section Eleven (such difference
being referred to herein as the "Non-Vested Amount") shall be forfeited
upon the earlier of (i) the Participant's receipt of a distribution of his
total vested Accounts under the Plan or (ii) the second (2nd) anniversary
following his termination of employment.
<PAGE>41
SECTION TWELVE
PAYMENT OF BENEFITS
A. GENERAL. The Administrative Committee shall distribute the
benefits payable to a Participant (or, if applicable, his Beneficiary),
pursuant to Paragraph B of this Section Twelve upon such Participant's
termination of employment. The amount of such distribution shall be equal
to the vested balance (as provided in Paragraph A of Section Eleven) in
such Participant's Accounts as of the Valuation Date coincident with or
immediately preceding the date on which the distribution is made,
supplemented, where applicable, by an amount representing any amounts
withheld from such Participant's Compensation under Paragraph A of Section
Seven subsequent to such Valuation Date.
B. DISTRIBUTION OF BENEFITS. Upon a Participant's death or his
termination of employment on or after a Change in Control, the
Participating Company which employed such Participant at such time shall
pay such Participant (or, if applicable, his Beneficiary) the benefits
payable to him under Paragraph A of this Section Twelve in one lump sum
payment as soon as administratively practicable after such event. In the
event of a Total and Permanent Disability, such lump-sum payment will be
made at the earliest of (i) recovery from the disability, (ii) death or
(iii) attainment of age sixty-five (65).
<PAGE>42
In the event of a termination of employment for reasons other than
death, Change in Control or Total and Permanent Disability, such lump-sum
payment will be made in the month of January following the Plan Year in
which such termination of employment takes place. However, if at least one
(1) year prior to his termination of employment for any reason other than a
Change of Control or Total and Permanent Disability, the Participant made
an irrevocable election in the manner specified by the Administrative
Committee or its delegate to receive his benefits under the Plan which are
attributable to Deferral Contributions, Basic Match Contributions and
Incremental Match Contributions with respect to one or more designated Plan
Years in the form of installment payments and such Participant had attained
age forty-five (45) prior to his termination of employment, such
distribution shall instead be made in the form of annual installment
payments.
If a Participant elects distribution in the form of annual
installment payments, he shall further designate the period of time (either
five (5) years or ten (10) years) over which the installment payments are
to be made. However, if the Participant's Accounts have an aggregate
balance of less than Fifty Thousand Dollars ($50,000) at the time any
payment is to be made, the full remaining vested balance in the Accounts
will be paid to the Participant in a single lump sum distribution. During
the period such installment payments are being made, the remaining balances
in the Participant's vested Accounts shall
<PAGE>43
continue to be invested at the direction of the Participant and credited
with earnings or losses in accordance with the provisions of Section Six of
the Plan. If a Participant incurs a Total and Permanent Disability after
having commenced receipt of benefits in installment form, payment of future
installments shall be suspended until the earlier of (i) recovery from the
disability or (ii) attainment of age sixty-five (65) at which time all
suspended payments shall be made in a lump sum.
If a Participant dies after having made an election to receive his
distribution in the form of installment payments but before the receipt of
all of the installment payments payable thereunder, the remaining
installment payments shall be paid to his Beneficiary for the remaining
duration of the elected installment period unless the Beneficiary requests
payment in a lump-sum and the Administrative Committee, in its sole
discretion, grants such request.
If a Participant dies after having elected to receive his
distribution in the form of installment payments but prior to receipt of
any installment payments payable thereunder, the benefits payable under
Paragraph A of this Section Twelve to such Participant's Beneficiary shall
be paid in one lump sum payment as soon as administratively feasible
following such Participant's death.
The computation of the amount of any lump sum payment or the amount
of any installment payment shall be made by reference to the balances of
the Participant's vested Accounts as of the
<PAGE>44
date of the distribution. A Participating Company making any distribution
hereunder shall withhold from the distribution any applicable payroll taxes
or required income taxes.
C. IN-SERVICE WITHDRAWAL. A Participant may elect to receive a
distribution from the Plan while still employed by the Sponsoring Company
or an Affiliated Company from the individual's Deferral Contribution
Account, vested Basic Match Contribution Account or vested Incremental
Match Contribution Account. Any such in-service distribution must be made
pursuant to an election initially made prior to the Plan Year of the
deferral to which the Deferral Contribution or Matching Contributions
relate. The distribution must be scheduled to commence no less than two
years after the end of the Plan Year in which such Deferral Contributions
and/or Matching Contributions are made. A separate distribution election
can be made each Plan Year with respect to all but not less than all of the
combination of all Deferral Contributions, Basic Match Contributions and
Incremental Match Contributions relating to such Plan Year.
The form and timing of the distribution of an in-service withdrawal
for any Plan Year may be amended or postponed one time only by giving the
Administrative Committee or its delegate written notice of such modified
distribution date no less than one year prior to the originally elected
distribution date. Any such deferred distribution must take place at least
two Plan Years after the originally scheduled distribution date.
<PAGE>45
Any distribution which is requested in the form of a lump-sum
distribution will be paid in the month of January of the year specified in
the election form. Alternatively, an in-service withdrawal can be paid in
annual installments over a two, three, four or five year period as
specified in the election form. The amount of the annual installment
payment will be determined by dividing the identified vested account
balance components by the remaining installments immediately prior to the
payment.
In the event that the remaining amounts to be distributed in
connection with the installment form have an aggregate balance of less than
$25,000 at the time any payment is to be made, the full remaining amounts
scheduled to be distributed to the Participant from the Accounts will be
paid to the Participant in a single lump sum distribution. Scheduled
annual installment payments will commence in the January of the year
specified in the election form.
If a Participant terminates employment due to death, a Change of
Control or Total and Permanent Disability prior to the scheduled withdrawal
date, that portion of the Participant's Accounts which were scheduled to be
paid in the form of an in-service distribution will instead be paid in
accordance with the applicable provisions of Paragraph B above.
If a Participant terminates employment for any reason other than
death, a Change of Control or Total and Permanent Disability prior to the
scheduled withdrawal date, that portion of the Participant's Accounts which
were scheduled to be paid in the
<PAGE>46
form of an in-service distribution will instead be paid in January of the
Plan Year following the termination of employment in the form and in the
manner previously elected by the Participant.
D. HARDSHIP WITHDRAWALS. A Participant may request the
Administrative Committee to allow a hardship withdrawal from the Plan in
the event of an unforeseeable severe financial emergency. For these
purposes, an unforeseeable severe financial emergency must be a financial
need arising from:
(i) The illness or accident of a Participant or a dependent of
the Participant;
(ii) A significant loss of the Participant's property due to
casualty; or
(iii) Any similar circumstances involving an immediate
financial need which arises out of events beyond the control of the
participant and which may not be relieved through other available resources
of the Participant. The Administrative Committee can grant or deny a
Participant's request for a hardship withdrawal in its sole discretion and
need not be consistent with respect to similarly situated requests.
E. BENEFITS OF PERSONS WHO CANNOT BE LOCATED. If the
Administrative Committee determines in good faith that a Participant or
Beneficiary entitled to receive a benefit payment hereunder cannot be
located, the Administrative Committee shall nevertheless give written
notice to such person of the fact that such benefit payment is payable to
him under the Plan. Such
<PAGE>47
written notice shall be given by United States mail to the person entitled
to the benefit payment (according to the records of the Plan) at the last
known address of such person. In addition, the Administrative Committee
shall use such other means as are reasonably available to it in order to
ascertain the location of such person. If such Participant or Beneficiary
makes no claim for such benefit payment before the earlier of (i) a period
of two (2) years after the giving of such written notice or (ii) the
termination of the Plan, then the Administrative Committee shall declare a
forfeiture of the benefits otherwise payable to such person, provided such
person has not yet been located.
F. DISTRIBUTION FOR MINOR BENEFICIARY. In the event a
distribution is to be made to a minor, then the Administrative Committee
may, in its sole discretion, direct that such distribution be paid to the
legal guardian, or if none, to a parent of such Beneficiary or a
responsible adult with whom the Beneficiary maintains his residence, or to
the custodian for such Beneficiary under the Uniform Gift to Minors Act or
Gift to Minors Act, if such is permitted by the laws of the state in which
said Beneficiary resides. Such a payment to the legal guardian or parent
of a minor Beneficiary shall fully discharge the Participating Company and
Plan from further liability on account thereof.
<PAGE>48
SECTION THIRTEEN
BENEFIT CLAIMS PROCEDURE
A. CLAIMS FOR BENEFITS. Any claim for benefits under the Plan
shall be made in writing to the Administrative Committee. If such claim
for benefits is wholly or partially denied, the Administrative Committee
shall, within ninety (90) days after receipt of the claim, notify the
Participant or Beneficiary of the denial of the claim. Such notice of
denial shall (i) be in writing, (ii) be written in a manner calculated to
be understood by the Participant or Beneficiary, and (iii) contain (a) the
specific reason or reasons for denial of the claim, (b) a specific
reference to the pertinent Plan provisions upon which the denial is based,
(c) a description of any additional material or information necessary to
perfect the claim, along with an explanation of why such material or
information is necessary, and (d) an explanation of the claim review
procedure as set forth in this Section Thirteen.
B. REQUEST FOR REVIEW OF DENIAL. Within sixty (60) days after the
receipt by a Participant or Beneficiary of a written notice of denial of
the claim, or such later time as shall be deemed reasonable taking into
account the nature of the benefit subject to the claim and any other
attendant circumstances, the Participant or Beneficiary may file a written
request with the Administrative Committee that it conduct a full and fair
review of the denial of the claim for benefits.
<PAGE>49
C. DECISION ON REVIEW OF DENIAL. The Administrative Committee
shall deliver to the Participant or Beneficiary a written decision on the
claim within sixty (60) days after the receipt of the aforesaid request for
review. Such decision shall (i) be written in a manner calculated to be
understood by the Participant or Beneficiary, (ii) include the specific
reason or reasons for the decision, and (iii) contain a specific reference
to the pertinent Plan provisions upon which the decision is based.
SECTION FOURTEEN
INALIENABILITY OF BENEFITS
The right of any Participant or Beneficiary to any benefit or
payment under the Plan shall not be subject to voluntary or involuntary
transfer, alienation, or assignment, and, to the fullest extent permitted
by law, shall not be subject to attachment, execution, garnishment,
sequestration, or other legal or equitable process. In the event a
Participant or Beneficiary who is receiving or is entitled to receive
benefits under the Plan attempts to assign, transfer or dispose of such
right, or if an attempt is made to subject said right to such process, such
assignment, transfer or disposition shall be null and void.
<PAGE>50
SECTION FIFTEEN
AMENDMENT OF THE PLAN
The Sponsoring Company may amend the Plan at any time, and from time
to time, with respect to both Participants who are employed by the
Sponsoring Company and Participants who are employed by any Participating
Company, pursuant to written resolutions of the Board of Directors of the
Sponsoring Company or, to the extent it has delegated such authority,
pursuant to written resolutions of the Administrative Committee. No such
amendment, however, shall have the effect of reducing any then
nonforfeitable percentage of benefits of any Participant as computed in
accordance with the vesting schedule under Paragraph A of Section Eleven of
the Plan. Notwithstanding the foregoing provisions of this Plan, the
Sponsoring Company may provide for distribution of some or all of the
Accounts established in connection with the Plan if legal counsel for the
Sponsoring Company renders a written opinion that such distribution is
required to enable the Plan to qualify for exemption from the requirements
of Parts 2-4 of Title I of ERISA or as otherwise required by applicable
law.
<PAGE>51
SECTION SIXTEEN
PERMANENCY OF THE PLAN
The Sponsoring Company reserves the right to terminate the Plan with
respect to any and all the Participating Companies.
If the Board of Directors of the Sponsoring Company determines to
terminate the Plan completely with respect to any or all Participating
Companies, the Plan shall be terminated with respect to such Participating
Company as of the date specified in resolutions of such Board of Directors
of the Sponsoring Company delivered to the Administrative Committee. Upon
such termination or partial termination of the Plan, after payment of all
expenses and proportional adjustment of the Accounts of the Participants
affected by such termination to reflect expenses, profits or losses, and
allocations of any previously unallocated amounts to the date of
termination, the Participants affected by such termination shall be
entitled to receive the vested amounts then credited to their respective
Accounts in the Plan. The Administrative Committee shall make payment of
such amounts in cash.
Upon the termination or partial termination of the Plan, the right
of each Participant affected by such termination to the vested amount
credited to his Accounts at such time shall be nonforfeitable without
reference to any formal action on the part of the Administrative Committee
or the Participating Company employing such Participant.
<PAGE> 52
SECTION SEVENTEEN
STATUS OF EMPLOYMENT RELATIONS
The adoption and maintenance of the Plan shall not be deemed to
constitute a contract between any Participating Company and its Employees
or to be consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed (i) to
give to any Employee the right to be retained in the employ of a
Participating Company; (ii) to affect the right of a Participating Company
to discipline or discharge any Employee at any time; (iii) to give a
Participating Company the right to require any Employee to remain in its
employ; (iv) to affect any Employee's right to terminate his employment at
any time; or (v) to confer the right to receive any Compensation in any
form.
SECTION EIGHTEEN
FUNDING
No assets of the Participating Companies shall be set aside,
earmarked or placed in trust or escrow for the benefit of any Participant
to fund any obligation of any Participating Company which may exist under
this Plan; provided, however, that the Sponsoring Company shall establish a
grantor trust designated as the "Chiquita Brands International, Inc.
Capital Accumulation Plan Trust" to hold assets to secure the obligations
to the
<PAGE>53
Participants under this Plan (except for Deemed Participation Match
Contribution) provided that neither the establishment nor the maintenance
of the Trust results in the Plan being "funded" for purposes of the
Internal Revenue Code. Except to the extent provided through the Trust,
all payments to a Participant or Beneficiary under this Plan shall be made
out of the general revenue of the Sponsoring Company or the Participating
Company which employed the Participant to which such benefits were
attributable, and the right to such payments by the Participant or
Beneficiary shall be solely that of an unsecured general creditor of the
Sponsoring Company and the relevant Participating Company. If the
Sponsoring Company or other Participating Company makes a direct payment of
a benefit to a Participant or Beneficiary, it shall be entitled to
reimbursement for such amount from the Trust.
SECTION NINETEEN
APPLICABLE LAW
The Plan shall be construed, regulated, interpreted and administered
under and in accordance with the laws of the State of Ohio, to the extent
not preempted by ERISA.
<PAGE>54
SECTION TWENTY
ADOPTION OF PLAN BY AFFILIATED COMPANIES
Any Affiliated Company, whether or not presently existing, may be
designated by the Administrative Committee of the Sponsoring Company as a
Participating Company under this Plan and a party to any trust established
in connection with the Plan. Any such Affiliated Company which is deemed
to have adopted the Plan pursuant to action taken by the Administrative
Committee of the Sponsoring Company as provided above shall thereafter be
included within the meaning of the term "Participating Company" when used
in the Plan.
<PAGE>55
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Chiquita
Brands International, Inc. Form 10-Q for the three months ended March 31, 2000
and is qualified in it entirety by reference to such financial information.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 80,394
<SECURITIES> 0
<RECEIVABLES> 245,924
<ALLOWANCES> 12,009
<INVENTORY> 386,302
<CURRENT-ASSETS> 894,844
<PP&E> 1,906,637
<DEPRECIATION> 733,635
<TOTAL-ASSETS> 2,585,251
<CURRENT-LIABILITIES> 628,310
<BONDS> 1,051,380
0
253,475
<COMMON> 664
<OTHER-SE> 481,325
<TOTAL-LIABILITY-AND-EQUITY> 2,585,251
<SALES> 658,053
<TOTAL-REVENUES> 658,053
<CGS> 498,005
<TOTAL-COSTS> 498,005
<OTHER-EXPENSES> 22,560
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,966
<INCOME-PRETAX> 38,990
<INCOME-TAX> 4,000
<INCOME-CONTINUING> 34,990
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,990
<EPS-BASIC> .46
<EPS-DILUTED> .43
</TABLE>
