Termination and Release Agreement - Chiquita Brands International Inc. and Steven G. Warshaw
TERMINATION AND RELEASE AGREEMENT
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AGREEMENT (this "Agreement"), dated as of March 25, 2002, by
and between CHIQUITA BRANDS INTERNATIONAL, INC. (the "Company"), and STEVEN G.
WARSHAW (the "Executive").
WHEREAS, the Executive has been employed as Chief Executive
Officer and President of the Company; and
WHEREAS, by mutual agreement between the parties hereto, the
Executive has resigned, effective as of the Termination Date, his positions as
Chief Executive Officer and President of the Company, as a member of the board
of directors of the Company and as an officer and director of any subsidiary or
affiliate of the Company for which he is serving in such positions.
NOW, THEREFORE, BE IT RESOLVED, that the Company and the
Executive, in consideration of the covenants herein set forth, hereby agree as
follows:
1. Termination of Employment
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By mutual agreement with the Company, the Executive has
resigned, effective as of March 20, 2002 (the "Termination Date"), from his
positions as Chief Executive Officer and President of the Company and a member
of the Board of Directors of the Company, and from all other positions the
Executive may currently hold as an officer or member of the board of directors
of any of the Company's subsidiaries or affiliates. The Executive shall sign and
deliver to the Company such other documents as may be necessary to effect or
reflect such resignations.
2. Severance Payments, Benefits and Obligations
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(a) The Executive will not be entitled to any compensation or
benefits from the Company, or its subsidiaries or affiliates, except as provided
in this Agreement.
(b) In consideration of the Executive's execution of the
release set forth in Section 5 of this Agreement and the Executive's agreement
to comply with Section 4 of this Agreement, and in lieu of and in satisfaction
of any agreement or any severance or other payments due under any severance or
other benefit plans maintained by the Company or any of its subsidiaries or
affiliates (collectively, the "Company Entities"), or any individual agreement
previously entered into with the Executive by any of the Company Entities,
including the Severance Agreement, dated February 14, 2001, by and between the
Company and the Executive (the "Severance Agreement"), the Company shall pay or
provide to the Executive (i) the payments and benefits due under Section 5 of
the Severance Agreement and (ii) no later than the first business day following
the expiration of the Revocation Period (as defined in Section 5(a) of this
Agreement), the (A) severance payments and benefits set forth in Section 6.1 of
the Severance Agreement (which for purposes of Section 6.1(D) of the Severance
Agreement shall
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be a pro rata annual bonus payment of $175,000), (B) a lump sum cash payment of
$175,000 in full satisfaction of the Executive's retention bonus and (C) a lump
sum cash payment of Executive's unpaid base salary from the Termination Date
through June 30, 2002, based upon an annual rate of $700,000 (provided, that, if
payment of the amounts under clauses (B) and/or (C) would result in a breach of
a covenant under any credit agreements of the Company Entities , such payments
will be made no later than June 30, 2002). The Company has provided Executive
with a certificate for 65,950 shares of common stock of the Company in full
satisfaction of Executive's "Award Shares" under Executive's Award Share
Agreement with the Company, dated as of February 21, 2002, which takes into
account applicable tax withholding of 34,050 shares on the payment of the Award
Shares. To the extent applicable, the Executive will remain eligible to receive
the payments set forth in Section 6.2 of the Severance Agreement. Except as
provided in this Agreement, the Executive hereby waives his rights to any
additional compensation and benefits from the Company Entities.
(c) The Company and its subsidiaries will continue to honor,
pursuant to their terms, the director and officer indemnification provisions
maintained by such entities with respect to the Executive, with respect to
actions of the Executive as an officer or director of the Company (or any of its
subsidiaries) prior to the Termination Date.
(d) The Company will reimburse the Executive for any
unreimbursed reasonable business expenses incurred by the Executive prior to the
Termination Date, pursuant to the Company's reimbursement policies; provided,
that, the Executive must present all expense reports to the Company within 90
days following the Termination Date.
(e) The Company shall provide Executive with outplacement
services pursuant to the Severance Agreement in a form and amount commensurate
with Executive's title and position.
(f) This Agreement shall supersede the Severance Agreement,
and the Severance Agreement shall be deemed terminated from and after the date
of this Agreement, without any remaining obligation of any party under such
agreement, except to the extent otherwise specifically referred to in this
Agreement. This Agreement shall also supersede the Severance Agreement by and
between the Executive and the Company, dated January 16, 2001, as amended, which
shall be deemed terminated from and after the date of this Agreement.
3. Confidentiality of this Agreement
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Except as required by law or regulation (including all federal
securities laws and regulations) as determined by the Company in its discretion,
none of the parties hereto will disclose the terms of this Agreement, provided
that the Executive may disclose such terms to his financial and legal advisors
and his spouse and the Company may disclose such terms to selected employees,
advisors and affiliates on a "need to know" basis, each of whom shall be
instructed by the Executive and the Company, as the case may be, to maintain the
terms of this Agreement in strict confidence in accordance with the terms
hereof.
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4. Restrictive Covenants
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(a) The Executive has returned or will immediately return to
the Company all Company Information (as defined below), including client lists,
files, software, records, computer access codes and instruction manuals which he
has in his possession, and agrees not to keep any copies of Company Information.
The Executive affirms his obligation to keep all Company Information
confidential and not to use or disclose it to any third party in the future. The
term "Company Information" means: (i) confidential information relating to the
Company Entities, including information received from third parties under
confidential conditions, and (ii) other technical, marketing, business or
financial information, or information relating to personnel or former personnel
of the Company Entities, the use or disclosure of which might reasonably be
construed to be contrary to the interest of the Company; provided, however, that
the term "Company Information" shall not include any information that is or
became generally known or available to the public other than as a direct result
of a breach of this paragraph by the Executive or any action by the Executive
prior to the Termination Date which would have been a breach of the Executive's
obligations to the Company in effect at such time.
(b) The Executive agrees to remain subject to the provisions
of Section 4 of the Severance Agreement, and agrees to provide reasonable
cooperation to the Company for transition services through June 30, 2002.
(c) From and after the Termination Date, the Executive will
refrain from taking actions or making statements, written or oral, which
denigrate, disparage or defame the goodwill or reputation of the Company
Entities and their trustees, officers, security holders, partners, agents and
former and current employees and directors or which are intended to, or may be
reasonably expected to, embarrass or adversely affect the morale of the
employees of any of the Company Entities. The Executive further agrees not to
make any negative statements to employees of the Company Entities or to third
parties relating to his employment or any aspect of the business of the Company
Entities and not to make any statements to employees of the Company Entities or
to third parties about the circumstances of the Executive's resignation, or
about the Company Entities and their former and current trustees, officers,
security holders, partners, agents, employees and directors. From and after the
Termination Date, the Company will advise its executive officers and directors
to refrain, from taking actions or making statements, written or oral, which
denigrate, disparage or defame the reputation of the Executive. The Company
further agrees to advise its executive officers and directors not to make, any
negative statements to employees of the Company Entities or to third parties
relating to the Executive's employment or any statements to employees of the
Company Entities or to third parties about the circumstances of the Executive's
resignation.
5. Waiver and Release
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(a) In exchange for the payments and benefits identified in
this Agreement, certain of which the Executive acknowledges are in addition to
anything of value to which he is already entitled, the Executive, on behalf of
himself and his beneficiaries, heirs and assigns, hereby releases, settles and
forever discharges the Company Entities and their subsidiaries, affiliates,
successors and assigns, together with their past and present shareholders,
directors, officers, employees, agents, insurers, attorneys, and any other party
associated with the Company Entities, to the fullest extent permitted by
applicable law, from any and all claims, causes of
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action, rights, demands, debts, liens, liabilities or damages of whatever
nature, whether known or unknown, suspected or unsuspected, which the Executive
ever had or may now have against the Company or any of the foregoing. This
includes, without limitation, any claims, liens, demands, or liabilities arising
out of or in any way connected with the Executive's employment with the Company
and the termination of that employment pursuant to any federal, state or local
laws regulating employment such as the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans With Disabilities Act of 1990, the Family and
Medical Leave Act of 1993, the Civil Rights Act known as 42 USC 1981, the
Employee Retirement Income Security Act of 1974 ("ERISA"), the Worker Adjustment
and Retraining Notification Act, the Fair Labor Standards Act of 1938, as well
as other federal, state, and local laws, except that this release shall not
affect any rights of the Executive for benefits payable under any Social
Security, Worker's Compensation or unemployment laws or rights arising out of
any breach of this Agreement by the Company.
The Executive further expressly and specifically waives any
and all rights or claims under the Age Discrimination In Employment Act of 1967
and the Older Workers Benefit Protection Act (collectively the "Act"). The
Executive acknowledges and agrees that this waiver of any right or claim under
the Act (the "Waiver") is knowing and voluntary, and specifically agrees as
follows: (a) that this Agreement and the Waiver are written in a manner which he
understands; (b) that the Waiver specifically relates to rights or claims under
the Act; (c) that he does not waive any rights or claims under the Act that may
arise after the date of execution of the Waiver; (d) that he waives rights or
claims under the Act in exchange for consideration in addition to anything of
value to which he is already entitled; and (e) that he is advised in writing to
consult with an attorney prior to executing the Waiver. The Executive
acknowledges that he was given up to 21 days to consider executing this
Agreement, including the Waiver. The Executive has 15 days following his
execution of this Agreement to revoke the Waiver (the "Revocation Period"). In
the event the Executive revokes the Waiver, the Company shall not be required to
make the payments under Section 2(b) of this Agreement.
(b) In exchange for the Executive's agreements and covenants
set forth in this Agreement, the Company and its subsidiaries, on behalf of such
entities and their successors and assigns, hereby release, settle and forever
discharge the Executive, and his heirs, successors and assigns, to the fullest
extent permitted by applicable law, from any and all claims, causes of action,
rights, demands, debts, liens, liabilities or damages of whatever nature,
whether known or unknown, suspected or unsuspected, which the Company and its
subsidiaries ever had or may now have against the Executive other than (i) any
claims related to, arising under or in connection with the Executive's
fraudulent or criminal activity and (ii) any claims arising out of the
Executive's breach of this Agreement.
(c) The Executive represents and acknowledges that, in
executing this Agreement, he has not relied upon any representation or statement
made by the Company not set forth herein.
6. Public Statement
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The parties agree that no subsequent comments shall be made to
the media or through other public statements by any party hereto regarding the
Executive's termination of
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employment that are inconsistent with the press release issued in connection
with the Executive's resignation, except as may be required by applicable law or
regulation.
7. Governing Law
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This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to the principles
of conflicts of law thereof. Except as provided in Section 10 of this Agreement,
any dispute under this Agreement shall be resolved pursuant to the dispute
provisions of Section 14 of the Severance Agreement
8. Taxes
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All payments or other benefits made or provided to the
Executive under this Agreement will be reduced by, or the Executive will
otherwise pay, all income, employment and Medicare taxes required to be withheld
on such payments and other benefits.
9. Savings and Severability
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The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, the
Executive and the Company Entities hereby agree that such court shall have
jurisdiction to reform this Agreement or any provision hereof so that it is
enforceable to the maximum extent permitted by law, and the parties agree to
abide by such court's determination. If any of the provisions of this Agreement
are determined to be wholly or partially unenforceable in any jurisdiction, such
determination shall not be a bar to or in any way diminish the rights of the
Company Entities to enforce any such covenant in any other jurisdiction.
10. Remedies
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The Executive acknowledges and agrees that because of the
nature of the business in which the Company Entities are engaged and because of
the nature of the Company Information to which the Executive has had access
during his employment, it would be impractical and excessively difficult to
determine the actual damages of the Company Entities in the event the Executive
breached any of the restrictive covenants contained herein, and remedies at law
(such as monetary damages) for any breach of the Executive's covenants would be
inadequate. The Executive therefore agrees and consents that if the Executive
commits any such breach or threatens to commit any such breach, the Company
shall have the right (in addition to, and not in lieu of, any other right or
remedy that may be available to it) to temporary and permanent injunctive relief
from a court of competent jurisdiction, without posting any bond or other
security and without the necessity of proof of actual damage.
11. Notices
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All notices, requests, demands and other communication which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received if personally delivered; when
transmitted by telecopy, electronic or digital transmission method upon receipt
of telephonic or electronic confirmation; that day after it is
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sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express) and upon receipt, if sent by
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certified or registered mail, return receipt requested. In each case notice
shall be sent to:
If to the Executive, addressed to:
Steven G. Warshaw
c/o Robert E. Coletti
Keating, Muething & Klekamp PLL
1400 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
If to the Company, addressed to:
Chiquita Brands International, Inc.
250 East Fifth Street
Cincinnati, Ohio 45202
Attention: General Counsel
or to such other place and with such other copies as any party
may designate as to itself or himself by written notice to the others.
12. Amendments; Waivers
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This Agreement may not be amended, modified or terminated,
except by a written instrument signed by the parties hereto. Any provision of
this Agreement may be waived by a written instrument signed by the party to be
charged with such waiver.
13. Successors
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This Agreement shall be binding on and inure to the benefit of
the Executive, the Company, and their respective heirs, successors and assigns,
including without limitation any corporation or other entity into which the
Company may be merged, reorganized or liquidated, or by which may be acquired.
The obligations of the Company may be assigned without limitation; but, as the
obligations to be performed by the Executive hereunder are unique based upon his
skills and qualifications, the Executive's obligations under this Agreement may
not be assigned.
14. Entire Agreement
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Except as specified herein, this Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
15. Counterparts
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This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement,
as of the date and year first written above.
CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/ Cyrus F. Freidheim Jr.
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Name: Cyrus F. Freidheim, Jr.
Title: Chairman of the Board and
Chief Executive Officer
/s/ Steven G. Warshaw
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STEVEN G. WARSHAW
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