Award Share Agreement - Chiquita Brands International Inc. and Barry H. Morris
AWARD SHARE AGREEMENT
THIS AGREEMENT, entered into as of February 21, 2002 (the "Agreement
Date"), by and between Barry H. Morris (the "Participant") and Chiquita Brands
International, Inc. (the "Company");
WITNESSETH THAT:
WHEREAS, the Company maintains the Chiquita Brands International, Inc.
Award Share Plan for the benefit of eligible Participants;
WHEREAS, consistent with the "Preliminary Outline of Principal Terms of
Chapter 11 Plan of Reorganization (the "Plan of Reorganization") attached as
Exhibit A to Form 8-K of Chiquita Brands International, Inc." filed November 12,
2001, the Company is to enter into a award share agreement with the Participant
pursuant to the terms of such Plan;
WHEREAS, consistent with the Plan of Reorganization, the Participant
has been designated to receive the shares of Stock as set forth in this
Agreement; and
WHEREAS, the Company and the Participant agree that this Agreement
fulfills the Company's obligation with respect to such grant, and the delivery
of shares of Stock (as defined in paragraph 9);
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. Award. Subject to the terms of this Agreement, upon consummation of
the Plan of Reorganization, the Participant shall be granted the right to
receive 13,333 shares of Stock (the "Award Shares"). The Participant's right to
the grant of Award Shares under this Agreement shall be contingent on the
consummation of the Plan of Reorganization, and no benefits shall be provided to
the Participant under this Agreement absent the consummation of the Plan of
Reorganization.
2. Account. As of the Consummation Date (as defined in paragraph 9),
the Company shall establish a bookkeeping account in the name of the Participant
(the Participant's "Account") which shall be credited with the number of Award
Shares as of that date. Each Award Share will represent the Participant's right
to receive one share of Stock. The Account will be increased to reflect
dividends payable with respect to Stock during the period between the
Consummation Date and the applicable Delivery Dates (as defined in paragraph 9),
with the Account to be increased by the number of Award Shares equal to the
number of shares of Stock which could be purchased with the dividends on the
Award Shares then credited to the Account (assuming each Award Share was a share
of Stock), based on the value of such Stock at the time such dividends are paid.
In addition, during the period between the Consummation Date and the applicable
Delivery Dates, the Account shall be adjusted to reflect stock splits, stock
dividends, and other similar transactions to the same extent as such adjustment
would apply if each Award Share constituted a share of Stock at the time of such
transaction.
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3. Trust. As of the Consummation Date, the Company will establish a
grantor trust within the meaning of sections 671 through 679 of the Internal
Revenue Code (the "Trust") and will deposit shares of Stock representing the
Award Shares in the Trust. The Trust will be managed by a fiduciary selected by,
but independent of, the Company. The Award Shares will constitute an unfunded,
unsecured promise by the Company to deliver the shares of Stock in accordance
with the Agreement, and the Participant shall not be treated as owner of the
shares while they are held in the Trust. Prior to the applicable Delivery Dates,
a Participant shall not, by reason of the Plan or this Agreement, acquire any
right in or title to any assets, funds or property of the Company whatsoever,
including, without limitation, any specific funds, assets, or other property
which the Company may set aside in the Trust or otherwise in anticipation of a
liability under this Agreement. Prior to the applicable Delivery Dates, the
Participant shall not be permitted to vote the Award Shares. The assets of the
Trust will be subject to claims of the Company's creditors in the event of the
Company's insolvency or bankruptcy. For this purpose the "Company" includes any
subsidiary of the Company which employs a Participant.
4. Delivery. The Company, through the Trust, will deliver to the
Participant, in the form of shares of Stock free of all restrictions: (i) 50% of
the Award Shares credited to the Account on the one year anniversary of the
Consummation Date, and (ii) all remaining Award Shares credited to the Account
on the two year anniversary of the Consummation Date. Notwithstanding the
foregoing, 100% of the Award Shares will be delivered to the Participant not
later than the date of termination of the Participant's employment with the
Company and its subsidiaries for any reason. In no event, however, will any
Award Shares be delivered to the Participant unless and until the Company has
successfully consummated the Plan of Reorganization contemplated by the
Preliminary Outline, and the Committee (as defined in paragraph 9) has certified
that such consummation has occurred.
5. Withholding. On the Consummation Date, the Participant will be
responsible for payment of the Social Security withholding taxes when due. At
each Delivery Date, the Participant will be responsible for payment of income
and other tax withholding then due by reason of the distribution. The obligation
to pay the withholding amounts at each of the Delivery Dates may be satisfied by
either of the following methods, as elected in advance by the Participant: (i) a
check from the Participant payable to the Company; or (ii) surrender to the
Company of a number of Award Shares that have a fair market value on the
applicable Delivery Date equal to the amount of the payroll withholding taxes
due.
6. Limit on Alienation. Prior to delivery on the applicable Delivery
Date, the Award Shares are not transferable other than as designated by
Participant by will or by the laws of descent and distribution.
7. Heirs. Subject to the terms of this Agreement, any benefits payable
to the Participant under this Agreement that are not paid at the time of the
Participant's death shall be paid at the time and in the form determined in
accordance with the provisions of this Agreement, to the beneficiary designated
by the Participant in writing filed with the Committee in such form and at such
time as the Committee shall require. If a deceased Participant fails to
designate a beneficiary, or if the designated beneficiary of the deceased
Participant dies before the Participant or before complete payment of the
benefits distributable under this Agreement, the Committee shall direct that
amounts to be paid under this Agreement be paid to the legal
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representative or representatives of the estate of the last to die of the
Participant and his beneficiary.
8. Not Employment Agreement. This Agreement does not constitute a
contract of employment, and does not give the Participant the right to be
retained in the employ of the Company or its subsidiaries or to continue to
provide services to the Company or its subsidiaries, nor any right or claim to
any benefit under this Agreement, unless such right or claim has specifically
accrued under the terms of this Agreement.
9. Definitions. In addition to the other definitions contained in this
Agreement, the following definitions shall apply:
(a) The term "Board" means the Board of Directors of the Company.
(b) The term "Code" means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to any
successor provision of the Code.
(c) The "Committee" shall be a committee consisting of two or more members
of the Board selected by the Board, each of whom shall be a
"non-employee director" as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 and an outside director as that term is
used in the regulations under Code section 162(m).
(d) The "Consummation Date" shall be the date of consummation of the Plan
of Reorganization.
(e) The "Delivery Dates" are the date or dates on which shares of Stock are
to be delivered pursuant to paragraph 4.
(f) The term "Stock" means shares of common stock of the Company.
10. Administration. The Committee will have the authority and
discretion to administer and interpret this Agreement and the Plan, and to make
all other determinations that may be necessary or advisable for the
administration of this Agreement and the Plan. Any interpretation of this
Agreement by the Committee and any decision made by the Committee with respect
to this Agreement is final and binding on all persons.
11. Amendment. This Agreement may be amended by written Agreement of
the Participant and the Company, without the consent of any other person.
12. Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of the Company.
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IN WITNESS WHEREOF, the Participant has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Agreement Date.
Participant
/s/ Barry Morris
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Barry H. Morris
Chiquita Brands International, Inc.
By: /s/ Robert W. Olson
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Its: Senior Vice President
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