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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 41)
Chiquita Brands International, Inc.
---------------------------------------
(Name of Issuer)
Common Stock, $.01 Par Value
---------------------------------------
(Title of Class of Securities)
170032-10-6
-------------------
(CUSIP Number)
James C. Kennedy
Vice President, Deputy General Counsel and Secretary
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538
------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
See Item 4
------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
Page 1 of 33 Pages
CUSIP NO. 170032-10-6 13D Page 2 of 33 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
American Financial Group, Inc. 31-1544320
American Financial Corporation 31-0624874
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio corporations
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
- - -
8 SHARED VOTING POWER
23,996,295 (See Item 5)
9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
23,996,295 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
23,996,295 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31% (See Item 5)
14 TYPE OF REPORTING PERSON*
HC
HC
CUSIP NO. 170032-10-6 13D Page 3 of 33 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Carl H. Lindner
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5, CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
2,109,385 (See Item 5)
8 SHARED VOTING POWER
23,996,295 (See Item 5)
9 SOLE DISPOSITIVE POWER
2,208,781 (See Item 5)
10 SHARED DISPOSITIVE POWER
23,996,295 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
26,205,076 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.8% (See Item 5)
14 TYPE OF REPORTING PERSON*
IN
CUSIP NO. 170032-10-6 13D Page 4 of 33 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Carl H. Lindner III
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
- - -
8 SHARED VOTING POWER
23,996,295 (See Item 5)
9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
23,996,295 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
23,996,295 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31% (See Item 5)
14 TYPE OF REPORTING PERSON*
IN
CUSIP NO. 170032-10-6 13D Page 5 of 33 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
S. Craig Lindner
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
---
8 SHARED VOTING POWER
23,996,295 (See Item 5)
9 SOLE DISPOSITIVE POWER
---
10 SHARED DISPOSITIVE POWER
23,996,295 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
23,996,295 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31% (See Item 5)
14 TYPE OF REPORTING PERSON*
IN
CUSIP NO. 170032-10-6 13D Page 6 of 33 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Keith E. Lindner
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
---
8 SHARED VOTING POWER
23,996,295 (See Item 5)
9 SOLE DISPOSITIVE POWER
---
10 SHARED DISPOSITIVE POWER
23,996,295 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
23,996,295 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31% (See Item 5)
14 TYPE OF REPORTING PERSON*
IN
Item 1. Security and Issuer.
This Amendment No. 41 to Schedule 13D is filed on behalf of American
Financial Group, Inc. ("American Financial" or "AFG"), American Financial
Corporation ("AFC"), and Carl H. Lindner, Carl H. Lindner III, S. Craig Lindner
and Keith E. Lindner (collectively, the "Lindner Family") (AFG, AFC and the
Lindner Family are collectively referred to as the "Reporting Persons"), to
amend and update the Schedule 13D most recently amended on March 18, 1999,
relative to the common stock par value $.01 per share ("Common Stock") issued by
Chiquita Brands International, Inc. ("Chiquita").
The principal executive offices of Chiquita are located at 250 East
Fifth Street, Cincinnati, Ohio 45202. All capitalized terms not otherwise
defined herein shall have the meanings assigned to them in the Schedule 13D, as
amended. Items not included in this amendment are either not amended or are not
applicable.
As of October 31, 2001, the Lindner Family beneficially owned
approximately 44% of the outstanding common stock of AFG and AFG beneficially
owned all of the common stock of AFC (approximately 79% of AFC's outstanding
voting equity securities). Through their ownership of common stock of American
Financial and their positions as directors and executive officers of American
Financial and AFC, the members of the Lindner Family may be deemed to be
controlling persons with respect to American Financial and AFC.
Item 4. Purpose of the Transaction.
On November 12, 2001, Chiquita announced that it had reached agreements
with committees representing its bondholders in support of a restructuring plan
to reduce Chiquita's debt and accrued interest by more than $700 million and its
future annual interest expense by about $60 million. The restructuring will
involve the issuance of 40 million shares of new common stock and warrants to
purchase additional shares of new common stock in exchange for Chiquita debt and
accrued interest and presently outstanding preferred and preference stock and
common stock. Chiquita will effect the reorganization by filing in Federal Court
a Pre-Arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy
Code. Please see Chiquita's Press Release attached hereto as Exhibit 3.
Chiquita announced that its current Board of Directors will remain in
place during the Chapter 11 case. Upon completion of the Chapter 11 process, a
new seven-member Board of Directors will be elected. The new Board will consist
of Carl H. Lindner and Steven G. Warshaw, who currently serve as Directors, plus
five new members nominated by the bondholder committees.
- 7 -
The Reporting Persons consider their beneficial ownership of Chiquita
equity securities as an investment which they continue to evaluate. From time to
time the Reporting Persons may acquire additional Chiquita equity securities or
dispose of some or all of the Chiquita equity securities which they beneficially
own.
Except as set forth in this Item 4, the Reporting Persons presently
have no plans or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
As of November 12, 2001, the Reporting Persons beneficially owned
26,205,076 shares (or approximately 33.8% of the outstanding shares) of Chiquita
Common Stock as follows:
Holder Number of Shares
--------------- ----------------
Carl H. Lindner 2,208,781*
ACC 1,000,000
ADSLIC 29,065
AEIC 75,717
AESLIC 959,447
ASI 73,134
EPI 37,238
GAAL 24,649
GAAS 25,574
GAES 63,705
GANY 41,217
GFR 2,672,572
GAI 17,235,424
INFIN 400,000
MCC 563,755
OSC 58,561
TICO 18,227
TRANS 118,010
WIC 600,000
----------
TOTAL 26,205,076
==========
*Includes 18,000 shares issuable pursuant to employee stock options exercisable
within sixty days and 81,396 shares issuable upon conversion of certain
convertible debentures.
ACC = Atlanta Casualty Company (b)
ADSLIC = American Dynasty Surplus Lines Insurance Company (a)
AEIC = American Empire Insurance Company (a)
AESLIC = American Empire Surplus Lines Insurance Company (a)
ASI = American Spirit Insurance Company (a)
EPI = Eden Park Insurance Company (a)
GAI = Great American Insurance Company ("GAI") (b)
- 8 -
GAAL = Great American Alliance Insurance Company (a)
GAAS = Great American Assurance Company (a)
GAES = Great American E&S Insurance Company (a)
GANY = Great American Insurance Company of New York (a)
GFR = Great American Financial Resources, Inc. (c)
INFIN = Infinity Insurance Company (b)
MCC = Mid-Continent Casualty Company (a)
OSC = Oklahoma Surety Company (a)
TICO = TICO Insurance Company (b)
TRANS = Transport Insurance Company (a)
WIC = Windsor Insurance Company (b)
(a) 100% owned subsidiaries of GAI
(b) 100% owned subsidiary of AFC
(c) 82% owned subsidiary of AFG
Each company listed above shares with the Reporting Persons the power
to vote or to direct the voting of, and the power to dispose or to direct the
disposition of, the Chiquita Common Stock held by such company.
At November 12, 2001, certain officers and directors of AFG and AFC
beneficially owned shares of Chiquita Common Stock.
Holder Number of Shares*
------ ----------------
Fred J. Runk 155,685
Thomas E. Mischell 55,000
Theodore H. Emmerich 1,000
* Includes options exercisable within 60 days.
In addition, certain of these officers and directors are participants
in the Chiquita Savings and Investment Plan. Shares held in the Plan are voted
by the Plan trustees.
As of November 12, 2001, and within the past 60 days, to the best
knowledge and belief of the undersigned and other than as set forth herein, no
transactions involving Chiquita Common Stock had been engaged in by the
Reporting Persons, by AFG's or AFC's directors or executive officers.
Please see Item 6, incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Pursuant to the terms of the "Preliminary Outline of Principal Terms of
Chapter 11 Plan of Reorganization" attached as part of Exhibit 99.2 to the Form
8-K filed by Chiquita on November 13, 2001 and attached hereto as Exhibit 4, 2%
of the new common stock will be issued to Carl H. Lindner. The Reporting Persons
estimate based on such terms, that they will beneficially own approximately 2.8%
of the shares of new common stock and 9.8% of the diluted shares of new common
stock, assuming exercise of the Reporting Persons' new warrants. In addition,
Carl H. Lindner will have the option to purchase an additional .25% of the new
common stock through the exercise of a purchase right granted pro rata to
holders of certain subordinated debt presently outstanding.
- 9 -
Item 7. Material to be filed as Exhibits.
(1) Agreement required pursuant to Regulation Section
240.13d-1(f)(1) promulgated under the Securities Exchange Act
of 1934, as amended.
(2) Powers of Attorney executed in connection with filings under
the Securities Exchange Act of 1934, as amended.
(3) Press Release
(4) "Preliminary Outline of Principal Terms of Chapter 11 Plan of
Reorganization" attached as a part of Exhibit 99.2 to
the Form 8-K filed by Chiquita on November 13, 2001
After reasonable inquiry and to the best knowledge and belief of the
undersigned, it is hereby certified that the information set forth in this
statement is true, complete and correct.
Dated: November 16, 2001 AMERICAN FINANCIAL GROUP, INC.
By: Karl J. Grafe
----------------------------------------
Karl J. Grafe, Assistant General
Counsel and Assistant Secretary
AMERICAN FINANCIAL CORPORATION
By: Karl J. Grafe
----------------------------------------
Karl J. Grafe, Assistant General
Counsel and Assistant Secretary
Karl J. Grafe
----------------------------------------
Karl J. Grafe, As
Attorney-in-Fact for:
Carl H. Lindner
Carl H. Lindner III
S. Craig Lindner
Keith E. Lindner
- 10 -
Exhibit 1
AGREEMENT
This Agreement executed this 7th day of April, 1995, is by and between
American Premier Group, Inc. ("American Premier") and American Financial
Corporation ("AFC"), both Ohio corporations, located at One East Fourth Street,
Cincinnati, Ohio 45202, and Carl H. Lindner ("CHL"), Carl H. Lindner III (CHL
III), S. Craig Lindner ("SCL") and Keith E. Lindner ("KEL"), each an individual,
the business address of each is One East Fourth Street, Cincinnati, Ohio 45202.
CHL, CHL III, SCL and KEL are referred to herein collectively as the Lindner
Family.
WHEREAS, as of the date of this Agreement, American Premier owns 100%
of the common stock of AFC and the Lindner Family beneficially owns
approximately 49.9% of American Premier's outstanding Common Stock and each
member of the Lindner Family is a director and executive officer of American
Premier and AFC;
WHEREAS, the Lindner Family may be deemed to be the beneficial owner of
securities held by AFC and its subsidiaries pursuant to Regulation Section
240.13d-3 promulgated under the Securities Exchange Act of 1934, as amended;
WHEREAS, American Premier and AFC and their subsidiaries from time to
time must file statements pursuant to certain sections of the Securities
Exchange Act of 1934, as amended, concerning the ownership of equity securities
of public companies;
NOW THEREFORE BE IT RESOLVED, that American Premier, AFC and the
Lindner Family, do hereby agree to file jointly with the Securities and Exchange
Commission any schedules or other filings or amendments thereto made by or on
behalf of American Premier, AFC or any of their subsidiaries pursuant to Section
13(d), 13(f), 13(g), and 14(d) of the Securities Exchange Act of 1934, as
amended.
AMERICAN PREMIER GROUP, INC.
AMERICAN FINANCIAL CORPORATION
By: /s/ James E. Evans
-----------------------------
James E. Evans
Vice President & General Counsel
/s/ Carl H. Lindner
---------------------------------
Carl H. Lindner
/s/ Carl H. Lindner III
---------------------------------
Carl H. Lindner III
/s/ S. Craig Lindner
---------------------------------
S. Craig Lindner
/s/ Keith E. Lindner
---------------------------------
Keith E. Lindner
- 11 -
Exhibit 2
POWER OF ATTORNEY
-----------------
I, Carl H. Lindner, do hereby appoint James C. Kennedy and Karl J.
Grafe, or either of them, as my true and lawful attorneys-in-fact to sign on my
behalf individually and as Chairman of the Board of Directors and Chief
Executive Officer of American Financial Group, Inc. or as a director or
executive officer of any of its subsidiaries and to file with the Securities and
Exchange Commission any schedules or other filings or amendments thereto made by
me or on behalf of American Financial Group, Inc. or any of its subsidiaries
pursuant to Sections 13(d), 13(f), 13(g), 14(d) and 16(a) of the Securities and
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as
of the 5th day of November, 1997.
/s/ Carl H. Lindner
-----------------------------------
Carl H. Lindner
- 12 -
POWER OF ATTORNEY
-----------------
I, Carl H. Lindner III, do hereby appoint James C. Kennedy and Karl J.
Grafe, or either of them, as my true and lawful attorneys-in-fact to sign on my
behalf individually and as an officer or director of American Financial Group,
Inc. or as a director or executive officer of any of its subsidiaries and to
file with the Securities and Exchange Commission any schedules or other filings
or amendments thereto made by me or on behalf of American Financial Group, Inc.
or any of its subsidiaries pursuant to Sections 13(d), 13(f), 13(g), 14(d) and
16(a) of the Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as
of the 5th day of November, 1997.
/s/ Carl H. Lindner III
-----------------------------------------
Carl H. Lindner III
- 13 -
POWER OF ATTORNEY
-----------------
I, S. Craig Lindner, do hereby appoint James C. Kennedy and Karl J.
Grafe, or either of them, as my true and lawful attorneys-in-fact to sign on my
behalf individually and as an officer or director of American Financial Group,
Inc. or as a director or executive officer of any of its subsidiaries and to
file with the Securities and Exchange Commission any schedules or other filings
or amendments thereto made by me or on behalf of American Financial Group, Inc.
or any of its subsidiaries pursuant to Sections 13(d), 13(f), 13(g), 14(d) and
16(a) of the Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as
of the 5th day of November, 1997.
/s/ S. Craig Lindner
-----------------------------------------
S. Craig Lindner
- 14 -
POWER OF ATTORNEY
-----------------
I, Keith E. Lindner, do hereby appoint James C. Kennedy and Karl J.
Grafe, or either of them, as my true and lawful attorneys-in-fact to sign on my
behalf individually and as an officer or director of American Financial Group,
Inc. or as a director or executive officer of any of its subsidiaries and to
file with the Securities and Exchange Commission any schedules or other filings
or amendments thereto made by me or on behalf of American Financial Group, Inc.
or any of its subsidiaries pursuant to Sections 13(d), 13(f), 13(g), 14(d) and
16(a) of the Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati, Ohio as
of the 5th day of November, 1997.
/s/ Keith E. Lindner
-----------------------------------------
Keith E. Lindner
- 15 -
Exhibit 3
News Release
Chiquita Reaches Agreement on Debt Restructuring
Plan Will Reduce Parent Holding Company Bond Debt By More Than $700 Million;
Operations To Continue As Normal
Cincinnati, Ohio, November 12, 2001 - Chiquita Brands International, Inc. (NYSE:
CQB) today announced that it has reached agreements with bondholder committees
in support of a restructuring plan that will reduce Chiquita's debt and accrued
interest by more than $700 million and its future annual interest expense by
about $60 million. As anticipated in its January announcement of the
restructuring initiative, the Company will soon file in Federal Court a
Pre-Arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy
Code.
The restructuring plan will only involve the publicly held debt and equity
securities of Chiquita Brands International, Inc., which is a holding company
without any business operations of its own. The Company's other creditors and
its assets, strategy and ongoing operations will be unaffected by the Chapter 11
filing. The Company's subsidiaries, which are independent legal entities that
generate their own cash flow and have access to their own credit facilities,
will continue to operate normally and without interruption. Throughout the
process, the Company's customers will continue to receive shipments normally and
its suppliers will continue to be paid in full according to normal terms.
Steven G. Warshaw, President and Chief Executive Officer of Chiquita, said: "We
are pleased to have achieved this important milestone in the restructuring
initiative we launched in January. This restructuring and the recent settlement
of the U.S.-EU banana trade dispute are both significant events that will
reinforce Chiquita's prospects for strong revenue and earnings growth. Now that
we have reached agreement with the bondholder committees, we are confident that
we can complete the Chapter 11 process within 90 to 120 days after we file our
Pre-Arranged Plan, giving the Company a fresh start and a solid balance sheet."
- 16 -
1. Terms of the Debt Restructuring Plan
According to the agreed terms, the Company will issue 40 million shares of new
common stock upon completion of the restructuring, and its outstanding
securities will be treated as follows, based on amounts outstanding at October
31, 2001:
o The existing $775 million of senior notes plus accrued interest will be
exchanged for $250 million of new senior notes and 35.1 million shares
(87.75%) of the new common stock.
o The existing $86 million of subordinated debentures plus accrued
interest will be exchanged for 3.1 million shares (7.75%) of the new
common stock.
o The existing preferred stock will be exchanged for 0.25 million shares
(0.62%) of the new common stock plus new warrants to purchase 4.2 million
shares of additional new common stock (7.79% on a fully diluted basis).
o The existing common stock will be exchanged for 0.55 million shares (1.38%)
of the new common stock plus new warrants to purchase 9.2 million shares of
additional new common stock (17.21% on a fully diluted basis).
As part of a management incentive program that will include a new stock option
plan, existing management will receive 1.0 million shares (2.5%) of the new
common stock.
Additional new common shares will be issuable upon exercise of the new warrants.
The new warrants, which will have a seven-year maturity, are intended to provide
existing preferred and common shareholders with significant opportunity to
profit from future growth in Chiquita's equity value.
The Company's current Board of Directors will remain in place during the Chapter
11 case. Upon completion of the Chapter 11 process, a new seven-member Board of
Directors will be elected. The new Board will consist of Carl H. Lindner and
Steve Warshaw, who currently serve as Directors, plus five members nominated by
the bondholder committees.
Completion of the restructuring plan is subject to certain conditions, including
its acceptance by affected classes of public debt and equity holders, whose
approval will be solicited
- 17 -
with the ad hoc committees representing its bondholders, the Company believes
that it will receive the votes required for approval of the plan.
The Company is filing a Current Report on Form 8-K with the Securities and
Exchange Commission (SEC) that contains additional details regarding the agreed
restructuring terms, as well as certain information, including financial
forecasts, provided to debtholders to facilitate the restructuring negotiations.
Since the SEC is closed today in observance of a federal holiday, the Company is
making available now on its website at www.chiquita.com the Form 8-K that it
will file tomorrow with the SEC.
Chiquita is a leading international marketer, producer and distributor of
quality fresh fruits and vegetables and processed foods.
This press release contains certain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are subject to a number of assumptions, risks and
uncertainties, including the successful implementation of the restructuring of
the Company's parent company debt described herein, the implementation of the
announced U.S. - EU agreement regarding the EU's banana import regime, the
continuing availability of sufficient borrowing capacity or other financing to
fund operations, capital spending and working capital requirements, the prices
at which Chiquita can sell its products, the costs at which it can 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, actions of governmental bodies, and
other market and competitive conditions, many of which are beyond the control of
Chiquita.
The forward-looking statements speak as of the date made and are not guarantees
of future performance. Actual results or expressed or implied in the
forward-looking statements, and the Company undertakes no obligation to update
any such statements.
* * *
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jeffrey M. Zalla, Vice President, Corporate Communications
William T. Sandstrom, Director of Investor Relations
Media contacts: (513) 784-8517
Investor calls: (513) 784-8100
- 18 -
Exhibit 4
THIS OUTLINE IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES
OR SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN.
SUCH OFFER OR SOLICITATION WILL BE MADE IN COMPLIANCE WITH
ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS
OF THE BANKRUPTCY CODE
CHIQUITA BRANDS INTERNATIONAL, INC.
PRELIMINARY OUTLINE OF PRINCIPAL TERMS OF
CHAPTER 11 PLAN OF REORGANIZATION
---------------------------------
This Outline describes certain of the principal terms of a proposed
reorganization of the outstanding indebtedness and liabilities of, and equity
interests in, Chiquita Brands International, Inc., a New Jersey corporation (the
"Company"). No reorganization of the outstanding indebtedness and liabilities of
any subsidiary of the Company, including Chiquita Brands, Inc., is contemplated.
The reorganization of the Company described herein will be implemented through
confirmation of a "pre-arranged" or "pre-negotiated" reorganization plan of the
Company (the "Plan") under chapter 11 of title 11 of the United States Code, 11
U.S.C. (S)101 et seq. (the "Bankruptcy Code"), which Plan has the support of the
Unofficial Committee of Holders of Chiquita Brands International, Inc.'s Senior
Notes (the "Senior Noteholders Committee,") and the Unofficial Committee of
Holders of Chiquita Brands International, Inc.'s Subordinated Convertible Notes
(the "Subordinated Noteholders Committee" and, together with the Senior
Noteholders Committee, the "Committees") described below./1/ The transactions
described in this Outline are subject in all respects to, among other things,
definitive documentation, including the Plan, appropriate disclosure materials
and related documents. The Company and the Committees agree that the
reorganization enterprise value of the Company for purposes of this Outline and
the Plan is $1.28 billion./2/
I. Classification and Treatment of Claims and Interests
A. Unclassified Claims (not entitled to vote)
-------------------
- ----------------------
/1/ Any creditors committee appointed in a Chapter 11 case commenced by the
Company which is comprised in whole or in part by any holders of Senior
Note Claims, Subordinated Note Claims, or either of the trustees under
the indentures pursuant to which the Senior Notes or Subordinated Notes
were issued, is hereinafter referred to as the "Creditors Committee".
/2/ Based on such reorganization enterprise value and after deducting the
long-term net indebtedness of the Reorganized Company at the Effective
Date (comprised of $250 million of New Notes and an estimated $413
million of subsidiary indebtedness), (a) the aggregate equity value of
the Reorganized Company is $617 million, (b) the value of the New Equity
is $14.38 per share and (c) the value of each New Warrant (for one
share) is $3.11.
- 19 -
1. Administrative Claims: Each holder will receive payment in
full (in cash) of the unpaid portion of an allowed administrative claim
on the Plan effective date (the "Effective Date") or as soon thereafter
as practicable (or if not then due, in accordance with its terms).
2. Priority Tax Claims: At the option of the Company, each holder will
receive either (i) payment in full (in cash) on the Effective Date or as
soon thereafter as practicable or (ii) payment over a six-year period
from the date of assessment as provided in section 1129(a)(9)(C) of the
Bankruptcy Code with interest payable at a rate of 8 1/4% per annum or
such other rate as may be required by the Bankruptcy Code.
B. Unimpaired Claims (deemed to accept)
-----------------
1. Class 1 - Other Priority Claims: Each holder will receive
payment in full (in cash) of an allowed other priority
claim on the Effective Date or as soon thereafter as practicable.
2. Class 2 - Secured Claims (if any):/3/ At the option of the Company,
the Company will (i) reinstate such allowed secured claim by curing all
outstanding defaults with all legal, equitable and contractual rights
remaining unaltered, (ii) pay in full (in cash) such allowed secured
claim on the Effective Date or as soon thereafter as practicable or
(iii) satisfy such allowed secured claim by delivering the collateral
securing such claim and paying any interest required to be paid under
section 506(b) of the Bankruptcy Code.
3. Class 3 - General Unsecured Claims: Holders of all general unsecured
claims (not included in Class 4), including all liquidated claims, will
receive payment in full on or after the Effective Date, as and when due
in the ordinary course of business.
The Company will seek a first day order of the Bankruptcy Court
permitting the ongoing payment of unimpaired claims in the ordinary
course during the pendency of the Chapter 11 case.
C. Impaired Claims (entitled to vote)
---------------
1. Class 4 - Senior Note Claims and Subordinated Note Claims:/4/
- ----------------
/3/ Each secured creditor will be placed in a separate subclass of Class 2;
each subclass will be treated as a separate class for voting and
distribution purposes.
/4/ For purposes of this outline, the subclasses of Class 4 are treated
as a single class for voting purposes (continued...)
- 20 -
(a) Subclass 4A - Senior Note Claims:
(i) Composition: Subclass 4A ("Senior Note
Claims") includes all claims against the
Company based upon the 9 1/8% Senior Notes
due 2004, the 9 5/8% Senior Notes due 2004,
the 10% Senior Notes due 2009 and the 10
1/4% Senior Notes due 2006.
(ii) Treatment: On the Effective Date or as soon
thereafter as practicable, each holder will
receive its proportionate share of (i) a
principal amount of $250 million of Senior
Notes (the "New Notes") to be issued by the
Company, as reorganized (the "Reorganized
Company") containing the principal terms set
forth on Schedule I attached and (ii)
35,100,000 shares/5/ of the common stock of
the Reorganized Company as of the Effective
Date (the "New Equity") (i.e., 87.75% of the
New Equity, subject to dilution by exercise
of the New Warrants (as defined below) and
by grants or issuances under the 2002 Stock
Option Plan (as defined below)). The
foregoing is subject to adjustment as
follows: (i) the principal amount of New
Notes to be received by Subclass 4A may be
decreased, and the New Equity to be received
by Subclass 4A may be increased, in
connection with the election of some or all
of the holders of Subclass 4B Claims to
receive New Notes in lieu of New Equity as
described below and (ii) cash may be
distributed to Subclass 4A in lieu of up to
2,280,730 shares of New Equity (i.e., 5.70%
of the New Equity) which would otherwise be
distributed to Subclass 4A as a result of
the election of some or all of the holders
of Subclass 4B Claims to purchase the
Additional New Equity (as described below).
The New Notes will be issued in
denominations of $1,000 and integral
multiples thereof. No New Note will be
issued in a denomination of less than
$1,000. In the event a holder is entitled to
distribution of New Notes that is not an
integral multiple of
- ----------------
/4/ (...continued)
and each as a separate class for distribution purposes.
/5/ All share numbers in this outline are based upon the issuance of
40,000,000 shares of New Equity on the Effective Date (with the
Effective Date assumed to be December 31, 2001), subject to dilution by
the exercise of the New Warrants and grants or issuances under the 2002
Stock Option Plan. If the actual number of shares issued is different
than 40,000,000, share numbers set forth in this Outline will be
adjusted accordingly.
- 21 -
$1,000, such distribution shall be aggregated
by the Company (or its agent), and as soon as
practicable after the Effective Date, such
interests shall be sold by the Company (or its
agent) in a commercially reasonable manner and,
upon the completion of such sale, the net
proceeds thereof shall be distributed (without
interests) pro rata to the holders based upon
the fraction of New Notes each such holder
would have been entitled to receive or deemed
to hold had the Company issued New Notes in
integral multiples smaller than $1,000, such
distribution being in lieu of any other
distribution with respect thereto. (b) Subclass
4B - Subordinated Note Claims:
(i) Composition: Subclass 4B ("Subordinated Note
Claims") includes all claims against the
Company based upon the Company's 7% Convertible
Subordinated Debentures due 2001.
(ii) Treatment: Each holder shall receive, on the
Effective Date or as soon thereafter as
practicable, its proportionate share of
3,100,000 shares of New Equity (i.e., 7.75% of
the New Equity, subject to dilution by
exercise of the New Warrants (as defined
below) and by grants or issuances under the
2002 Stock Option Plan (as defined below)).
However, in lieu of receiving all or a portion
of such holder's share of the 3,100,000 shares
of New Equity allocated to Subclass 4B, each
holder has the right to receive its share of
$10 million in New Notes (which New Notes
would otherwise be distributable to Subclass
4A) (the "Note Election"). The holders
electing to receive their respective amounts
of such New Notes shall receive $1,000
principal amount of New Notes for each lot of
101.19 shares of New Equity the holder elects
to not receive./6/ If more than $10 million in
New Notes are subscribed for pursuant to the
foregoing, each electing holder will be
entitled to receive an amount of New Notes in
lieu of New Equity equal to (1) $10,000,000,
multiplied by (2) a fraction, (a) the
numerator of which is the amount of Subclass
4B Claims held by such holder in respect of
which such holder has elected to receive New
Notes and (b) the denominator of which is the
aggregate amount of Subclass 4B Claims in
respect of which holders of Subclass 4B Claims
have elected to receive
- ---------------
/6/ Solely for purposes of this exchange ratio, the New Equity is being valued
on the basis of an enterprise value of the Company of $1.1 billion.
- 22 -
New Notes; provided that the Company shall
not be obligated in any event to issue New
Notes other than in denominations of $1,000.
If holders of Subclass 4B Claims elect to
receive any New Notes, the principal amount
of New Notes to be received by Subclass 4A
shall be reduced by such amount, and the New
Equity to be received by Subclass 4A shall
be increased by the amount of New Equity
forsaken by Subclass 4B in lieu of New
Notes.
At the time of voting on the Plan, each
holder of a Subclass 4B Claim shall also
have the one-time right to purchase for cash
its pro rata share of 2,280,730 shares of
the New Equity, (i.e., 5.70% of the New
Equity, subject to dilution by exercise of
the New Warrants (as defined below) and by
grants or issuances under the 2002 Stock
Option Plan (as defined below)), at a price
per share equal to $17.63/7/ (the aggregate
amount of such New Equity purchased pursuant
to such right being herein referred to as
the "Additional New Equity"). To the extent
any holders of Subclass 4B Claims elect to
purchase such New Equity, (1) an amount
equal to the cash proceeds received by the
Company in consideration for such New Equity
shall be distributed to the holders of
Subclass 4A Claims on a pro rata basis on
the Effective Date or as soon thereafter as
practicable and (2) the amount of New Equity
to be received by Subclass 4A shall be
reduced by the amount of the Additional New
Equity.
Upon (a) the sale of, and/or consummation of
a tender offer resulting in the purchase of,
substantially all of the New Equity of the
Reorganized Company (a "Stock Sale"), (b)
the merger of the Reorganized Company
(whether or not the Reorganized Company is
the surviving entity) which results in a
change-in-control of the Reorganized Company
(a "Merger") or (c) the sale of all or
substantially all of the assets of the
Reorganized Company (an "Asset Sale"), in
each case prior to the third anniversary of
the Effective Date of the Plan, each holder
of a Subclass 4B Claim will be entitled to
its proportionate share of a one-time
distribution (the "Supplemental
Distribution") from the Reorganized Company
/7/ This share price will be based on an enterprise value of the Company
which would result in a full recovery, on an aggregate basis, of all
Subclass 4A Claims (including pre-petition and post-petition interest);
solely for purposes of this election, this enterprise value is
currently estimated to be $1.41 billion.upon the consummation of such
transaction. The Supplemental Distribution shall be determined as
follows:
- 23 -
--------------------------------------------------------------
Supplemental Purchase Price Implied Total
Distribution/8/ Per Share/9/ Enterprise
Value/10/
$0 less than $17.64 less than $1.45
billion
$15 million $17.64 - $19.61 $1.45 billion
$20 million $19.62 - $21.57 $1.55 billion
$25 million $21.58 - $23.52 $1.65 billion
$30 million $23.53 and $1.75 billion
greater and greater
-------------------------------------------------------------
The Supplemental Distribution shall be paid
in the same form, whether cash, stock or
other securities, as the consideration
received by the holders of New Equity (in
the case of a Stock Sale or Merger) or the
Reorganized Company (in the case of an Asset
Sale). The right of a holder of a Subclass
4B Claim to receive its proportionate share
of the Supplemental Distribution shall not
be assignable or transferable.
2. Class 5 - Old Preferred Equity Interests:
(a) Composition: Class 5 includes the three
series of preferred stock of the Company, the
rights to accrued dividends thereon and any
option, warrant or right, contractual or
otherwise, to acquire any such interest (the
"Old Preferred Equity Interests").
- ------------------
/8/ The amounts in this table are not cumulative.
/9/ The Purchase Price Per Share shall be used to determine the amount of
the Supplemental Distribution in the case of a sale of and/or tender
offer for substantially all of the New Equity of the Reorganized
Company, or a merger in which the Reorganized Company is not the
surviving entity.
/10/ The Implied Total Enterprise Value shall be used to determine the
amount of the Supplemental Distribution in the case of a sale of all or
substantially all of the assets of the Reorganized Company.
- 24 -
(b) Treatment: On the Effective Date or as soon
thereafter as practicable, the holders will
receive (subject to the terms of
Paragraph IV below) (i)
249,383 shares of the New Equity (i.e., 0.62%
of the New Equity of the Reorganized Company
as of the Effective Date, subject to dilution
by exercise of the New Warrants (as defined
below) and by grants or issuances under the
2002 Stock Option Plan (as defined below)),
and (ii) warrants (the "New Warrants") to
purchase New Equity from the Reorganized
Company in an aggregate amount equal to
4,156,389 shares of the New Equity (i.e.,
7.79% of the New Equity on a fully diluted
basis, prior to any dilution by grants or
issuances under the 2002 Stock Option Plan (as
defined below)). The principal terms of the
New Warrants are described on Schedule II
attached hereto. The allocation of the New
Equity and the New Warrants among the three
classes of Old Preferred Equity Interests is
set forth on Schedule III attached hereto./11/
3. Class 6 - Old Common Equity Interests:
(a) Composition: Class 6 includes the common stock of the
Company and any option, warrant or right, contractual
or otherwise, to acquire any such interest (the "Old
Common Equity Interests").
(b) Treatment: On the Effective Date or as soon
thereafter as practicable, the holders shall receive
(subject to the terms of Paragraph IV below)
(i) 550,617 shares of the New Equity
(i.e., 1.38%/12/ of the New Equity of the Reorganized
Company as of the Effective Date, subject to dilution
by exercise of the New Warrants and by grants or
issuances under the 2002 Stock Option Plan), and
(ii) New Warrants to purchase New Equity from the
Reorganized Company in an aggregate amount equal to
9,176,944 shares of the New Equity (i.e., 17.21%/13/
of the New Equity on a fully diluted basis, prior to
any dilution by grants or issuances under the 2002
- -----------------
/11/ Treatment subject to modification as set forth in Paragraph IV below,
if Class 5 and/or Class 6 does not accept the Plan.
/12/ Holders of Old Preferred Equity Interests and Old Common Equity
Interests will receive, in the aggregate, 2.0% of the New Equity
(subject to dilution by exercise of the New Warrants and by grants or
issuances under the 2002 Stock Option Plan).
/13/ Holders of Old Preferred Equity Interests and Old Common Equity
Interests will receive, in the aggregate, Warrants exercisable into 25%
of the New Equity (subject to dilution by grants or issuances under the
2002 Stock Option Plan).
- 25 -
Stock Option Plan). The principal terms of the New Warrants
are described on Schedule II attached hereto./14/
II. Other Provisions
In addition to the foregoing provisions relating to classification and
treatment of claims and interests, the Plan shall contain provisions
appropriate under the circumstances concerning, among other things, the
following: (i) disputed claims and reserves therefor; (ii) the assumption
or rejection, as the case may be, of executory contracts and unexpired
leases; (iii) retention of jurisdiction by the Bankruptcy Court for
certain purposes; (iv) inability to materially amend or modify the Plan's
provisions with respect to any class, in a manner adverse to such class,
without the consent of the applicable creditors committee appointed in
the Company's chapter 11 case; (v) customary and standard exculpation and
releases for officers, directors, employees, professionals and
representatives of the Company and for American Financial Group and its
affiliates, as and to the extent permitted under applicable law; and (vi)
conditions to the effectiveness of the Plan, including the Company
obtaining a waiver or amendment of its subsidiaries' financing
arrangements with Foothill Capital Corporation in order to permit
distributions by such subsidiaries to the Company, or otherwise replacing
such financing facility. The Company will seek a first day order of the
Bankruptcy Court permitting the ongoing payment of trade creditors after
the filing of the Plan.
III. Management of the Reorganized Company
A. Board of Directors of Management
The Plan shall provide that the initial board of directors of the
Reorganized Company (the "New Board") shall consist of 7 (seven)
members, including the persons currently serving as the Chairman
of the Board and as the President and Chief Executive Officer of
the Company and 5 (five) members to be selected by the Committees
or the Creditors Committee.
B. Management Incentive Program
The Plan shall provide for a management incentive program (the
"Management Incentive Program") that grants (i) to directors,
officers and other management employees options to acquire
5,925,926 shares of the New Equity (i.e., 10% of the New Equity
on a fully diluted basis at the Effective Date) pursuant to the
Company's 2002 Stock Option Plan (the "2002 Stock Option Plan");
the exercise price of any options granted thereunder on or about
the time of the Effective Date will be set at the average closing
price of the New Equity over the first 30 trading days following
the Effective Date (or over such other 30
- -------------------
/14/ Treatment subject to modification as set forth in Paragraph IV below,
if Class 5 and/or Class 6 does not accept the Plan.
- 26 -
day period shortly after the Effective Date as the New Board
determines), and the other terms of any options granted thereunder
(including vesting) will be determined by the New Board, and (ii)
to the current Chairman of the Board 800,000 shares of the New
Equity (i.e., 2.0% of the New Equity, subject to dilution by
exercise of the New Warrants and by grants or issuances under the
2002 Stock Option Plan), and to the current Chief Executive Officer
and to such other employees of the Company as he may designate,
200,000 shares of the New Equity (i.e., 0.5% of the New Equity,
subject to dilution by exercise of the New Warrants and by grants
or issuances under the 2002 Stock Option Plan).
C. Registration and Other Rights and Listing of New Equity.
-------------------------------------------------------
The Reorganized Company will use reasonable efforts to have the New
Equity and New Warrants listed on a nationally recognized market or
exchange. The New Equity and New Warrants will also be subject to
customary demand and piggyback registration rights for the benefit
of holders whose resale of such common stock would be limited or
restricted by federal securities law.
IV. New Equity and New Warrant Provisions
The Plan shall provide that if Class 5 and/or Class 6 rejects the Plan,
the Debtor may seek to confirm such Plan utilizing the "cram-down" provisions of
section 1129(b) of the Bankruptcy Code. In the event that Class 5 rejects the
Plan and Class 6 accepts the Plan, (a) Classes 5 and 6 shall receive no
consideration under the Plan and (b) Class 4 shall be deemed to have entered
into a settlement pursuant to which the New Equity and New Warrants that were to
be distributed to Classes 5 and 6 under the Plan shall be distributed by Class 4
as follows: (1) Class 5 will receive 50% of the New Equity and 50% of the New
Warrants that it would have received if it had approved the Plan and (2) Class 6
will receive, in addition to the amounts described in Section I.C.3 above, the
remaining 50% of the New Equity and the remaining 50% of the New Warrants that
would have been distributed to Class 5 if Class 5 had approved the Plan (such
amount, the "Reduction Amount"). In the event that Class 5 accepts the Plan and
Class 6 rejects the Plan, (a) Class 6 shall receive no consideration under the
Plan and (b) Class 4 shall be deemed to have entered into a settlement pursuant
to which the New Equity and New Warrants that were to be distributed to Class 6
under the Plan shall be distributed by Class 4 as follows: (1) Class 6 will
receive 50% of the New Equity and 50% of the New Warrants that it would have
received if it had approved the Plan and (2) Class 5 will receive, in addition
to the amounts described in Section I.C.2 above, the remaining 50% of the New
Equity and the remaining 50% of the New Warrants that would have been
distributed to Class 6 if Class 6 had approved the Plan. In the event that both
Class 5 and Class 6 reject the Plan, (a) Classes 5 and 6 shall receive no
consideration under the Plan and (b) Class 4 shall be deemed to have entered
into a settlement pursuant to which the New Equity and New Warrants that were to
be distributed to Classes 5 and 6 under the Plan shall be distributed by Class 4
as follows: (1) Class 5 will receive 50% of the New Equity and 50% of the New
Warrants that it would have received if it had approved the Plan, and the
remaining 50% of the New Equity and the remaining 50% of the New Warrants that
would have been distributed to Class 5 if Class 5 had approved the Plan shall be
canceled, and (2) Class 6 will receive
- 27 -
50% of the New Equity and 50% of the New Warrants that it would have received if
it had approved the Plan, and the remaining 50% of the New Equity and the
remaining 50% of the New Warrants that would have been distributed to Class 6 if
Class 6 had approved the Plan shall be canceled.
- 28 -
SCHEDULE I
NEW CHIQUITA BRANDS INTERNATIONAL, INC.
Senior Notes due 2008
Term Sheet
Issuer: New Chiquita Brands International, Inc. (the "Reorganized Company").
Issue: $250,000,000 Senior Notes (the "New Notes").
Denominations: $1,000 and integral multiples thereof.
Interest: The interest rate on the New Notes will be fixed at the
Effective Date at a rate equal to the sum of: (i) the yield
for actively traded U.S. Treasury securities having a maturity
of seven years, (ii) the Bear Stearns BB Index Spread (as
defined below) and (iii) 1.0%. The Bear Stearns BB Index
Spread is the spread over comparable maturity U.S. Treasury
securities of BB rated high yield debt securities as measured
in the Bear Stearns Relative Value Analysis (Global High Yield
Research) as of the most recent report prior to the Effective
Date. However, to the extent that the Bear Stearns BB Index
Spread has increased or decreased by more than 100 basis
points (i.e. 1.0%) from the immediately prior weekly report,
the spread used in clause (ii) above will be the average of
the Bear Stearns BB Index Spread for the four- week period
prior to the Effective Date.
Maturity: 7 years.
Optional
Redemption: The New Notes may be redeemed at the option of the Reorganized
Company, in whole or in part, at any time on not less than 30
nor more than 60 days notice. In the case of redemption in the
first, second or third year after issuance, the redemption
shall be for an amount equal to the higher of (i) par, or (ii)
the present value of (A) the redemption amount at the
beginning of the fourth year and (B) interest payments through
the beginning of the fourth year (discounted in each case at a
rate equal to the yield to maturity for comparable Treasuries
plus 0.25%). In the case of any redemption thereafter, the
redemption shall be for the following amounts in addition to
any accrued and unpaid interest at the time of redemption: (i)
if redeemed in the fourth year after issuance, at par plus 1/2
of the Senior Note Interest Rate; (ii) if redeemed in the
fifth year after issuance, at par plus 3/8 of the Senior Note
Interest Rate; (iii) if redeemed in the sixth year after
issuance, at par plus 1/4 of the Senior Note Interest Rate;
and (iv) if redeemed in the seventh year after issuance, at
par.
I-1
- 29 -
Ranking: The New Notes will be senior unsecured obligations of the
Reorganized Company, ranking pari passu with all other
existing and future senior unsecured obligations of the
Reorganized Company and will rank senior to all existing and
future subordinated debt of the Reorganized Company.
Other
Covenants: The New Notes will have covenants which are (a) consistent
with current market practices for high-yield securities, and
(b) substantially similar to the terms of the indenture for
the Company's 10% Senior Notes due 2009, to the extent not
inconsistent with current market practices.
I-2
- 30 -
SCHEDULE II
NEW CHIQUITA BRANDS INTERNATIONAL, INC.
New Warrants
Term Sheet
Issuer: New Chiquita Brands International, Inc. (the "Reorganized
Company").
Issue: Warrants to purchase New Equity (the "New Warrants").
Expiration: 7 years.
Limitation of
Warrants: May be exercised for 13,333,333 shares of the New Equity
i.e., 25% of New Equity on a fully diluted basis,
prior to dilution by any grants or issuances under the
2002 Stock Option Plan).
Strike Price: The exercise price of the New Warrants will be set as
of the Effective Date at a price per share equal to the
"Solvency Value", currently estimated to be $18.68 per
share./15/ Solvency Value is the value per share of the New
Equity, that when multiplied by the number of shares of New
Equity distributed to Class 4 (and after adding such amount to
the face amount of the New Notes), will provide for a full
recovery, on an aggregate basis, of Class 4 Claims for
principal plus accrued and unpaid pre-petition and post-
petition interest through the Effective Date.
Merger/
Tender Offer: In the event of a merger or tender offer, all or
partially for cash or other property (other than common equity
securities), New Warrant holders will have the right to elect
(as an alternative to exercising some or all of the New
Warrants) to receive cash or other property (other than common
equity securities) for such New Warrants in the same
proportion as holders of New Equity equivalent to a
Black/Scholes valuation of such New Warrants as of the date
such merger or tender offer is consummated. For purposes of
calculating such value, (i) the term
- ------------------
/15/ This $18.68 estimated exercise price assumes an Effective Date of
December 31, 2001, and is based upon (1) aggregate Class 4 Claims at
December 31, 2001 equal to $963.7 million, (2) ownership of Reorganized
Company by holders of Class 4 Claims equal to 95.5% of the New Equity
(prior to dilution by the New Warrants and the 2002 Stock Option Plan)
and (3) total outstanding shares of New Equity equal to 40,000,000
(prior to dilution by the New Warrants and the 2002 Stock Option Plan).
Solvency Value will be different if the Effective Date is a date other
than December 31, 2001.
II-1
- 31 -
of the New Warrants will be the remaining time to the expiration of the New
Warrants, (ii) the assumed volatility will be 25%, (iii) the assumed risk-free
rate shall equal the yield on U.S. Treasury securities with comparable maturity
to the remaining term of the New Warrants and (iv) the share price of the New
Equity in such merger or tender offer will be equal to the cash proceeds, or the
fair market value of the other property, received for such share of New Equity
in such merger or tender offer. If the Reorganized Company enters into a merger
or exchange offer in which the consideration to be received is all or partially
equity securities, a pro rata portion of the New Warrants will be exchanged for
replacement warrants of the surviving entity (to the extent the surviving entity
is not the Reorganized Company) which will include similar terms and conditions,
including similar Black/Scholes valuation protection in the event of a
subsequent merger or tender offer.
II-2
- 32 -
SCHEDULE III
NEW CHIQUITA BRANDS INTERNATIONAL, INC.
Allocation of New Equity and New Warrants among Class 5 Interests
Series of Old Preferred Old Preferred New Equity New Warrants
Equity Interests Equity Interests
Outstanding /16/
Series A 1,678,130 126,284 2,104,734
Series B 1,228,700 116,795 1,946,587
Series C 84,371 6,304 105,069
TOTAL 249,383 4,156,389
/16/ As of October 31, 2001. To the extent of further conversions after
October 31, 2001, the New Equity and New Warrants allocated to Class 5
will be correspondingly decreased, and the New Equity and New Warrants
allocated to Class 6 will be correspondingly increased.
III-1
- 33 -