Chiquita

Investor Relations > Governance > Charter of the Audit Committee

Investor Relations

Revised April 2, 2009

CHIQUITA BRANDS INTERNATIONAL, INC.

Audit Committee
of the Board of Directors

Charter

Name

There shall be a committee of the Board of Directors called the Audit Committee.

Primary Purposes

Review the Company's financial statements, accounting policies and internal controls.
Assist the Board in its oversight of:
- the integrity of the financial statements of the Company,
- the qualifications and independence of the independent registered public accounting firm ("independent auditors"),
- the performance of the Company's internal audit function and independent auditors, and
- the Company's programs for compliance with laws, regulations and Company policies.
Prepare the Audit Committee report as required by the Securities and Exchange Commission ("SEC") to be included in the Company's proxy statement for the annual shareholders' meeting.

Composition and Selection

The Committee shall consist of no fewer than three members. Members of the Committee and its Chair shall be appointed annually by the Board (upon the recommendation of the Nominating & Governance Committee), which shall have the power to change the membership of the Committee at any time.

Members of the Committee shall meet the independence and "financial literacy" requirements, and at least one member shall satisfy the "accounting or related financial expertise" requirements, of the New York Stock Exchange. In addition, members of the Committee shall satisfy the independence requirements of, and at least one member shall be an "audit committee financial expert" as defined under, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") and SEC rules and regulations thereunder.

Director's fees are the only compensation that a Committee member may receive from the Company.

No Committee member may serve on the audit committee of more than two other publicly held companies without the approval of the Board.

The Committee may form subcommittees for any purpose and with such power and authority as it deems appropriate.

Meetings

The Committee shall meet as often as it determines necessary to carry out its duties and responsibilities, but no less than quarterly.

A majority of the members of the Committee present in person or by means of conference telephone or other communications equipment shall constitute a quorum. The Committee shall maintain minutes of its meetings. Actions may also be taken without a meeting if all members of the Committee consent thereto in writing (including by e-mail) and the writings and consents are filed with the proceedings of the Committee.

Authority and Responsibilities

General

Conduct whatever investigations relating to the Company's financial affairs, records, accounts, reports or activities as the Committee in its discretion deems desirable or as the Board may from time to time request.
Committee members shall have free and open access to any officer or employee of the Company or the Company's outside counsel or independent auditor, or to request any of such individuals to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
Committee members shall have free and open access to such Company books, records or other resources as the Committee deems necessary in conducting its duties and responsibilities.
Engage independent counsel and any other advisors deemed by the Committee in its judgment to be necessary to carry out its duties.
Request any member or members of the Committee to perform additional tasks, beyond normal Committee service, deemed by the Committee in its judgment to be necessary to carry out its duties. Any additional compensation paid to such member shall be determined by the Company's Compensation & Organization Development Committee, approved by the Committee and reported to the Board.
The Company shall provide funding, as determined by the Committee, for payment of compensation to any independent auditor or advisor engaged by the Committee and administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
Meet periodically with management, the internal auditors and the Company's independent auditors in separate sessions.
Make regular reports to the Board and review any significant issues that arise with respect to the quality or integrity of the Company's financial statements, compliance with legal or regulatory requirements, the performance and independence of the Company's independent auditors, and related issues.
Review risk factors that affect the Company and review the Company's risk assessment and risk management policies and programs.

Independent Auditor

Be directly responsible for the appointment, compensation, retention and oversight of the Company's independent auditors, which shall report directly to the Committee.
Approve all audit engagement fees and terms and all non-audit engagements with the independent auditor; provided, that in no event shall the non-audit services include any of the prohibited services listed in Sarbanes-Oxley and SEC rules. Pre-approvals of non-audit services may be delegated to the Chairman of the Committee and reported to the full Committee at its next meeting.
Obtain and review a report from the independent auditor at least annually regarding (a) the firm's internal quality-control procedures, (b) any material issues raised by the most recent quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years with respect to one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company.
Review and discuss with the independent auditor any significant accounting issues or concerns related to the conduct of the audit and management's responses thereto, including those matters required to be discussed with the Committee pursuant to Statement of Auditing Standards No. 61.
Evaluate the qualifications, performance and independence of the independent auditor annually and reassess its overall effectiveness periodically.
Ensure that the lead audit partner of the independent auditor and the concurring audit partner responsible for reviewing the audits are rotated at least every five years, and that any other audit partners are rotated at least every seven years.

Financial Statements

Meet to review and discuss with management and the independent auditor the Company's quarterly financial statements and disclosures made under "Management's Discussion and Analysis of Financial Condition and Results of Operations" to be included in its Form 10-Q filings.
Review quarterly earnings press releases, including any use of "pro forma" or non-GAAP financial measures as well as any commentary regarding the financial outlook for the company.
Meet to review and discuss with management and the independent auditor the Company's annual financial statements, accounting policies and disclosures made under "Management's Discussion and Analysis of Financial Condition and Results of Operations" to be included in its Form 10-K filings.
Regularly review with the independent auditor any difficulties the auditor encountered in the course of the audit work, including any restrictions on the scope of the independent auditor's activities or on access to requested information, and any significant disagreements with management.
Review and discuss with management and/or the independent auditor, as applicable, (a) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles, and major issues as to the adequacy of the Company's internal controls and any special audit steps adopted in light of any material control deficiencies; (b) analyses prepared by management or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; (c) any problems, difficulties or differences encountered in the course of the audits, including any disagreements with management or restrictions on the scope of the independent auditor's activities and management's response thereto; and (d) the effect of regulatory and accounting initiatives, as well as off-balance-sheet structures, on the financial statements of the Company.
Recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.

Internal Controls and Internal Audit Function

Review with the independent auditor, internal auditors and the Company's financial management the adequacy and effectiveness of the Company's internal controls, including internal control over financial reporting.
Monitor management's assessment of the Company's internal control over financial reporting (Sarbanes Oxley Section 404).
Oversee the Company's internal controls and procedures related to fraud prevention, and monitor and review the Company's response to allegations involving material financial fraud.
Be directly responsible for the appointment, compensation, retention and oversight of the Company's Vice President, Internal Audit, who shall report directly to the Committee. Review the annual internal audit plan and review, with input of the independent auditor, the adequacy and effectiveness of the internal audit function.

Compliance Programs

Oversee and periodically review with management the Company's programs for compliance with laws, regulations and Company policies, including the Ethical and Legal Responsibilities section of the Company's Code of Conduct.
Be directly responsible for the evaluation, compensation, retention and oversight of the Company's Vice President and Chief Compliance Officer, who shall report directly to the Chair of the Committee.
Review with the Company's Chief Compliance Officer the effectiveness of the Company's compliance programs and procedures.
Review and ensure the Company's compliance with:
- the Foreign Corrupt Practices Act of 1977;
- the 1976 Final Judgment of Permanent Injunction (and related Consent and Undertaking);
- the settled cease-and-desist order with the SEC (October 2001) for violations of certain provisions of the Securities and Exchange Act of 1934;
- the US Federal Trade Regulations, including OFAC regulations; and
- the Conditions of Probation as set forth in the Plea Agreement entered into with the Department of Justice on March 6, 2007.
Consider any requests for waivers from the Ethical and Legal Responsibilities section of the Company's Code of Conduct by executive officers or directors. Any such waivers shall also be subject to approval of the Board.
Establish procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
Recommend to the Board policies related to the Company's hiring of employees or former employees of the independent auditor.

Annual Reports

Provide the Audit Committee report that is required by SEC rules to be included in the Company's proxy statement for its annual shareholders' meeting.

Performance Evaluation

Review annually the Committee's performance and its charter, and report its conclusions to the Board.

Responsibility for Financial Statements

The Committee is not responsible for (i) preparing financial statements, (ii) assuring compliance, (iii) certifying internal financial and disclosure controls, (iv) overseeing the periodic securities disclosure process, each of which is the responsibility of company management, or (v) auditing financial statements, which is the responsibility of the independent auditors, nor are they deemed to have accepted a duty of care greater than the other directors.