As filed with the Securities and Exchange Commission on September 1, 2004
Registration No. 333-117491
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SENECA FOODS CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0733425
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3736 South Main Street
Marion, New York 14505
(315) 926-8100
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
KRAIG H. KAYSER
President and Chief Executive Officer
3736 South Main Street
Marion, New York 14505
(315) 926-8100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
WILLIAM I. SCHAPIRO, Esq.
Jaeckle Fleischmann & Mugel, LLP
Twelve Fountain Plaza, Suite 800
Buffalo, New York 14202
(716) 856-0600
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement until such time
that all of the shares registered hereunder have been sold.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
Registration Statement for the same offering: [ ] _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Class of Proposed Maximum Offering Proposed Maximum Amount of Registration
Securities to be Registered Amount to be Registered Price Per Share Aggregate Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible Preferred 967,742 $18.26 (2) $17,670,969 (2) $2,239 (5)
Stock Series 2003 (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Common Stock (3) 967,742 (4) (4) 0
====================================================================================================================================
<FN>
(1) The Convertible Preferred Stock Series 2003 ("Series 2003
Preferred Stock") is convertible into Class A Common Stock of the
Company on the basis of one share of Class A Common Stock for each
share of Series 2003 Preferred Stock. The Class A Common Stock
into which the Series 2003 Preferred Stock is convertible is also
being registered pursuant to this Registration Statement.
(2) Estimated solely for the purpose of calculating the registration
fee based upon the value of the shares of Registrant's Class A
Common Stock into which the Series 2003 Preferred Stock may be
converted. There currently is no trading market for the Series
2003 Preferred Stock. The Class A Common Stock was valued pursuant
to Rule 457(c) under the Securities Act of 1933 and based upon the
average of the high and low prices for the Class A Common Stock as
reported on the NASDAQ National Market on July 13, 2004.
(3) Includes an indeterminate number of shares of Class A Common Stock
as may be issuable upon conversion of the Series 2003 Preferred
Stock registered hereunder pursuant to anti-dilution provisions of
such securities, for which no separate fee is payable pursuant.
(4) As a registration fee is being paid on the Series 2003 Preferred
Stock, no registration fee is payable on the underlying Class A
Common Stock pursuant to Rule 457(i).
(5) As previously paid.
</FN>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
The information in this prospectus is not complete and may be changed.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell nor the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Subject to Completion, dated September 1, 2004
PROSPECTUS
SENECA FOODS CORPORATION
967,742 shares of Convertible Preferred Stock Series
2003 and shares of Class A Common Stock Issuable upon
Conversion of the Convertible Preferred Stock Series 2003
This prospectus relates to the public resale, from time to time, of the
following securities, up to the amounts shown.
o 967,742 shares of Convertible Preferred Stock Series 2003 (the "Series
2003 Preferred Stock")
o 967,742 shares of Class A Common Stock, par value $0.25 per share,
(the "Class A Common Stock") issuable upon conversion of the
Series 2003 Preferred Stock
On May 27, 2003, we entered into a purchase agreement in connection with
the acquisition of our wholly-owned subsidiary, Seneca Foods, L.L.C., formerly
known as Chiquita Processed Foods, L.L.C., from the selling shareholder,
Chiquita Brands International, Inc. The agreement provided for the issuance of
967,742 shares of Series 2003 Preferred Stock to the selling shareholder. If the
selling shareholder or its transferees convert all of its Series 2003 Preferred
Stock, we will issue up to a total of 967,742 shares of Class A Common Stock,
subject to any adjustments.
We are registering the offered securities as required under the terms of a
registration rights agreement between Friday Holdings, L.L.C., an indirect
wholly-owned subsidiary of Chiquita Brands International, Inc., and us. This
prospectus will be used by the selling shareholder to resell its Series 2003
Preferred Stock and its Class A Common Stock directly to purchasers or through
underwriters, broker-dealers or agents, who may receive compensation in the form
of discounts or commissions. The selling shareholder reserves the sole right to
accept or reject, in whole or in part, any proposed purchase of the shares to be
made directly or through agents. We will not receive any proceeds from the sale
of the shares by the selling shareholder.
Our Class A Common Stock is quoted on the NASDAQ National Market under the
symbol "SENEA." On July 13, 2004, the last reported sale price for our Class A
Common Stock was $18.25 per share. The Series 2003 Preferred Stock is not listed
on any securities exchange or the NASDAQ Stock Market and there is no public
market for these securities. Shares of Series 2003 Preferred Stock have priority
over the Class A Common Stock in the payment of dividends and in the event of
liquidation, are non-voting except in limited circumstances and are convertible
into shares of Class A Common Stock.
The securities offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 6 for certain factors and considerations relevant to
a purchase of the securities offered by this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 2004.
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized any dealer, salesperson or
other person to give any information or represent anything not contained in this
prospectus. This prospectus is not an offer to sell or buy any shares in any
jurisdiction in which it is unlawful. You should assume that the information
appearing in this prospectus and the documents incorporated by reference herein
is accurate only as of its respective date or dates or on the date or dates
which are specified in these documents. Our business, financial condition,
results of operations and prospects may have changed since those dates.
TABLE OF CONTENTS
Page
FORWARD-LOOKING INFORMATION.......................................................................................4
WHERE YOU CAN FIND MORE INFORMATION...............................................................................4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................................................4
THE COMPANY.......................................................................................................6
RISK FACTORS......................................................................................................6
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS.......................................13
USE OF PROCEEDS..................................................................................................14
SELLING SHAREHOLDER..............................................................................................14
PLAN OF DISTRIBUTION.............................................................................................15
DESCRIPTION OF CAPITAL STOCK.....................................................................................16
LEGAL MATTERS....................................................................................................23
EXPERTS..........................................................................................................24
FORWARD-LOOKING INFORMATION
We have made forward-looking statements with respect to our financial
condition, results of operations and business and on the possible impact of this
offering on our financial performance. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions as
they relate to us or our management are intended to identify forward-looking
statements. These forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties, including those
described under "Risk Factors" in this prospectus, that could cause actual
results to differ materially from the results contemplated by the
forward-looking statements. The forward-looking statements represent our
judgment and expectations as of the date of this prospectus. Prospective
purchasers should not place undue reliance on these forward-looking statements.
We assume no obligation to update any such forward-looking statements.
In evaluating the securities offered by this prospectus, you should
carefully consider the discussion of risks and uncertainties in the section
entitled "Risk Factors" on pages 6 to 13 of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act with respect to the securities offered hereunder. As permitted by the SEC's
rules and regulations, this prospectus does not contain all the information set
forth in the registration statement. For further information, please refer to
the registration statement and the contracts, agreements and other documents
filed as exhibits to the registration statement. Additionally, we file annual,
quarterly and special reports, proxy statements and other information with the
SEC.
You may read and copy all or any portion of the registration statement or
any other materials that we file with the SEC at the SEC public reference room
at 450 Fifth Street, Washington, D.C., 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings, including the registration statement, are also available
to you on the SEC's web site (www.sec.gov). We also have a web site
(www.senecafoods.com) through which you may access our SEC filings.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them: that means we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information.
We incorporate by reference the documents listed below and any future
filings we make with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act prior to the completion of this offering:
o........Our Annual Report on Form 10-K for the year ended March 31, 2004;
o........Our Quarterly Report on Form 10-Q for the quarter ended June 26, 2004;
o........Our Current Reports on Form 8-K filed with the SEC on June 18, 2004 and
June 30, 2004; and
o........Our Registration Statement on Form 8-A dated August 22, 1995
registering our Class A Common Stock under Section 12(g) of the
Exchange Act.
You may request a free copy of these filings (other than exhibits, unless
they are specifically incorporated by reference in the documents) by writing or
telephoning us at the following address and telephone number:
Seneca Foods Corporation
Attention: Secretary
3736 South Main Street,
Marion, New York 14505
(315) 926-8100
THE COMPANY
Seneca Foods Corporation was founded in 1949 and incorporated under the
laws of the State of New York. In the spring of 1995, we initiated our 20-year
Alliance Agreement with The Pillsbury Company, which created our most
significant business relationship. Under the Alliance Agreement, we have packed
canned and frozen vegetables carrying the Green Giant(R) brand name. These Green
Giant vegetables have been produced in vegetable plants which we acquired from
Pillsbury and, to a lesser extent, in our other vegetable plants. Pillsbury was
subsequently acquired by General Mills, Inc., a major producer and distributor
of food products, and Pillsbury has assigned its obligations under the Alliance
Agreement to General Mills Operations, Inc., which we sometimes refer to in this
prospectus as GMOI. The Alliance Agreement expires in 2014, but GMOI may
terminate it without cause upon one year's prior notice and payment of a penalty
to us and may terminate without delay or penalty if we fail to perform. In the
spring of 2003, we acquired Chiquita Processed Foods, L.L.C. from Chiquita
Brands International, Inc. and changed its name to Seneca Foods, L.L.C. As a
result of this acquisition and the subsequent sale of certain of the acquired
facilities, we currently operate 30 plants and warehouses in seven states.
Our business activities are conducted in food and non-food segments. Since
the onset of the Alliance Agreement, vegetable production has been our dominant
line of business. The food segment constitutes 99% of total sales, of which
approximately 98% is vegetable processing and 2% is fruit processing. We
sometimes refer to our vegetable "pack" in this prospectus. "Pack" is a term for
processing recently harvested vegetables into canned or frozen form suitable for
sale to customers. Processing includes such activities as washing, sorting,
grading, cooking, canning and freezing.
Approximately 10% of our processed foods are packed for retail customers
under our own brands including Seneca(R), Libby's(R) (under license), Blue
Boy(R), Aunt Nellie's Farm Kitchen(R), Stokely's(R), READ(R), Festal(R) and
Diamond A(R). Approximately 44% of processed foods are packed under private
labels, that is, under brand names owned or controlled by the purchasers, which
are primarily retail grocery chains. About 18% of the processed foods are sold
to institutional food distributors. The remaining 28% is sold under the Alliance
Agreement with GMOI.
Our principal executive office is located at 3736 South Main Street,
Marion, New York and our telephone number is (315) 926-8100. We also maintain a
web site at www.senecafoods.com.
RISK FACTORS
You should carefully consider the factors described below and other
information contained in this prospectus before making a decision to buy any
securities registered hereunder. The risks and uncertainties described below are
not the only ones we face. Additional risks and uncertainties not presently
known to us, may also impair our business operations. If any of the following
risks actually occurs, our business, financial condition or results of
operations could be materially and adversely affected. In such case, the trading
price of our Class A Common Stock could decline, and you may lose all or part of
your investment. This prospectus also contains forward-looking statements that
involve risks and uncertainties. Please refer to "Forward-Looking Information"
on page 4.
If we do not successfully integrate Seneca Foods, L.L.C., formerly Chiquita
Processed Foods, L.L.C., we may not realize the expected benefits of the
acquisition.
There is a significant degree of difficulty and management distraction
inherent in the process of integrating Seneca Foods, L.L.C. with our existing
business. These difficulties include the challenge of accomplishing this
integration while managing the ongoing operations of each business, the
challenge of combining the business cultures of each company, and the need to
retain key personnel of our existing business and the acquired business. The
process of integrating operations could cause an interruption of, or loss of
momentum in, the activities of Seneca Foods, L.L.C. and our existing business.
Members of our senior management may be required to devote considerable amounts
of time to this integration process, which will decrease the time they will have
to manage our businesses, service existing customers, attract new customers and
develop new products. If our senior management is not able to effectively manage
the integration process, or if any significant business activities are
interrupted as a result of the integration process, our business could suffer.
We cannot provide assurance that we will successfully or cost-effectively
integrate the Seneca Foods, L.L.C. acquisition and our existing business. The
failure to do so could have a material adverse effect on our business, financial
condition and results of operations.
We may not realize the expected cost savings and other benefits from the Seneca
Foods, L.L.C. acquisition.
We expect to realize cost savings and other financial and operating
benefits as a result of the acquisition of Seneca Foods, L.L.C. However, we
cannot predict with certainty when these cost savings and benefits will occur,
or the extent to which they actually will be achieved. Realization of any
benefits and savings could be affected by a number of factors beyond our
control, including, without limitation, general economic conditions, increased
operating costs, the response of competitors and regulatory developments.
Excess capacity in the vegetable industry has a downward effect on price.
Our financial performance and growth are related to conditions in the
United States vegetable processing industry which is a mature industry with a
modest growth rate in the last 10 years. Our net sales are a function of product
availability and market pricing. In the vegetable processing industry, product
availability and market prices tend to have an inverse relationship: market
prices tend to decrease as more product is available and to increase if less
product is available. Product availability is a direct result of plantings,
growing conditions, crop yields and inventories, all of which vary from year to
year. In addition, market prices can be affected by the planting and inventory
levels and individual pricing decisions of the three or four largest processors
in the industry. Generally, market prices in the vegetable processing industry
adjust more quickly to variations in product availability than an individual
processor can adjust its cost structure; thus, in an oversupply situation, a
processor's margins likely will weaken. We typically have experienced lower
margins during times of industry oversupply.
In the past, the vegetable processing industry has been characterized by
excess capacity, with resulting pressure on our prices and profit margins. Many
of our competitors have closed processing plants in response to the downward
pressure on prices. There can be no assurance that our margins will improve in
response to favorable market conditions or that we will be able to operate
profitably during depressed market conditions.
Growing cycles and adverse weather conditions may decrease our results from
operations.
Our operations are affected by the growing cycles of the vegetables we
process. When the vegetables are ready to be picked, we must harvest and process
the vegetables or forego the opportunity to process fresh picked vegetables for
an entire year. Most of our vegetables are grown by farmers under contract with
us. Consequently, we must pay the contract grower for the vegetables even if we
cannot or do not harvest or process them. Most of our production occurs during
the second quarter (July through September) of our fiscal year. In that quarter,
the growing season ends for most of the vegetables processed by us in the
northern United States. A majority of our sales occur during the third and
fourth quarter of each fiscal year (due to seasonal consumption patterns for our
products). Accordingly, inventory levels are highest during the second and third
quarters, and accounts receivable levels are highest during the third and fourth
quarters. Net sales generated during our third and fourth fiscal quarters have a
significant impact on our results of operations. Because of these seasonal
fluctuations, the results of any particular quarter, particularly in the first
half of our fiscal year, will not necessarily be indicative of results for the
full year or for future years.
Because weather conditions during the course of each vegetable crop's
growing season will affect the volume and growing time of that crop, we must set
planting schedules without knowing the effect of the weather on the crops or on
the entire industry's production. As most vegetables are produced in more than
one part of the U.S., we may somewhat reduce our risk that our entire crop will
be subject to disastrous weather. The upper Midwest is the primary growing
region for the principal vegetables which we pack, namely peas, green beans and
corn, and it is also a substantial source of our competitors' vegetable
production. Consequently, the adverse effects of weather-related reduced
production in that region may be partially mitigated by higher prices for the
vegetables which are produced.
The commodity materials that we process or otherwise require are subject to
price increases that could adversely affect our profitability.
The materials that we use, such as vegetables, steel and packaging
materials are commodities that may experience price volatility caused by
external factors including market fluctuations, availability, currency
fluctuations and changes in governmental regulations and agricultural programs.
These events can result in reduced supplies of these materials, higher supply
costs or interruptions in our production schedules. If prices of these raw
materials increase, but we are not able to effectively pass such price increases
along to our customers, our operating income will decrease.
We face risks generally associated with our debt.
As of March 31, 2004, we had a total of $240.9 million of indebtedness. Our
indebtedness could have important consequences, such as limiting our operational
flexibility due to the covenants contained in our debt agreements; limiting our
ability to invest in our business due to debt service requirements; limiting our
ability to compete with companies that are not as highly leveraged; and
increasing our vulnerability to economic downturns and changing market
conditions.
Our ability to meet our debt service obligations will depend on our future
performance, which will be affected by financial, business, economic,
governmental and other factors, including potential changes in consumer
preferences and pressure from competitors. If we do not have enough money to pay
our debt service obligations, we may be required to refinance all or part of our
existing debt, sell assets, borrow more money or raise equity. There is a risk
that we may not be able to refinance existing debt or that the terms of any
refinancing will not be as favorable as the terms of the existing debt.
Our dependence on the Alliance Agreement could negatively effect sales.
We have an Alliance Agreement with GMOI, whereby we process canned and
frozen vegetables for GMOI under the Green Giant brand name. GMOI continues to
be responsible for all of the sales, marketing and customer service functions
for the Green Giant products. The Alliance Agreement has a remaining term of
eleven years. Green Giant products packed by us in fiscal 2004 and 2003
constituted approximately 28% and 39%, respectively, of our total sales. General
Mills, Inc. guarantees GMOI's obligations under the Alliance Agreement.
The Alliance Agreement has an initial term ending December 31, 2014, and
will be extended automatically for additional five year terms unless terminated
in accordance with the provisions of the Alliance Agreement. Upon virtually all
of the causes of termination enumerated in the Alliance Agreement, GMOI will
acquire legal title to the production plants and certain of the other assets
which we acquired under the Alliance Agreement, and various financial
adjustments between the parties will occur. If GMOI terminates the Alliance
Agreement without cause, it must pay us a substantial termination payment.
Our sales and financial performance under the Alliance Agreement and our
sales of Green Giant products depend to a significant extent on our success in
producing quality Green Giant vegetables at competitive costs and GMOI 's
success in marketing the products produced by us. The ability of GMOI to
successfully market these products will depend upon GMOI 's sales efforts, as
well as the factors described above under "--Excess capacity in the vegetable
industry has a downward effect on price." We cannot give assurance as to the
volume of GMOI 's sales and cannot control many of the key factors affecting
that volume. The Alliance Agreement contains extensive covenants by us with
respect to quality and delivery of products, maintenance of the Alliance Plants
and other standards of our performance. If we were to fail in its performance of
these covenants, GMOI would be entitled to terminate the Alliance Agreement.
Termination of the Alliance Agreement will, in most cases, entitle our
principal lenders, including our long-term lenders, to declare a default under
our loan agreements with them. The principal lenders have a security interest in
certain payments that we will receive from GMOI on termination of the Alliance
Agreement. Unless we were to enter into a new substantial supply relationship
with GMOI or another major vegetable marketer and acquire substantial production
capacity to replace the GMOI production plants, any such termination would
substantially reduce our sales.
If we do not maintain the market shares of our products, our business and
revenues may be adversely affected.
All of our products compete with those of other national, major and smaller
regional food processing companies under highly competitive conditions. The
vegetable products which we sell under our own brand names not only compete with
vegetable products produced by vegetable processing competitors, but also
compete with products we produce and sell to other companies who market those
products under their own brand names, such as the Green Giant vegetables we sell
to GMOI under the Alliance Agreement and the vegetables we sell to various
retail grocery chains which carry our buyers' own brand names.
The customers who buy our products to sell under their own brand names
control the marketing programs for those products. In recent years, many major
retail food chains have been increasing their promotions, offerings and shelf
space allocations for their own vegetable brands, to the detriment of vegetable
brands owned by the processors, including our own brands. We cannot predict the
pricing or promotional activities of our competitors or whether they will have a
negative effect on us. There are competitive pressures and other factors which
could cause our products to lose market share or result in significant price
erosion, and which could have a material adverse effect on our business,
financial condition and results of operations.
If we are subject to product liability claims, we may incur significant and
unexpected costs and our business reputation could be adversely affected.
Food processors are subject to significant liability should the consumption
of their products cause injury or illness. A product liability judgment against
us could also result in substantial and unexpected expenditures and divert
management's attention from other responsibilities. Although we maintain product
liability insurance coverage in amounts customary within the industry, there can
be no assurance that this level of coverage is adequate or that we will be able
to continue to maintain our existing insurance or obtain comparable insurance at
a reasonable cost, if at all. A product recall or a partially or completely
uninsured judgment against us could have a material adverse effect on results of
operations and financial condition.
Absence of a public trading market may affect the value of the Series 2003
Preferred Stock.
Although the Class A Common Stock is listed and traded on the NASDAQ
National Market, there is no public trading market for the Series 2003 Preferred
Stock and none may ever develop. The absence of a public market may affect the
value of the Series 2003 Preferred Stock.
The Series 2003 Preferred Stock and other class of our preferred stock have
priority over the Class A Common Stock in the event of liquidation or
dissolution.
In the event of our liquidation or dissolution, the entire stated value of
our remaining convertible participating preferred stock will have priority of
payment over all shares of Class A Common Stock (and Class B Common Stock). Each
holder of convertible participating preferred stock may, at the holder's option,
convert convertible participating preferred stock into Class A Common Stock on a
share-for-share basis at any time. We cannot predict whether, or to what extent,
holders of convertible participating preferred stock will convert to Class A
Common Stock.
In addition, in liquidation, all outstanding shares of our 6% voting
cumulative preferred stock, preferred stock without par value, 10% Series A
cumulative convertible voting preferred stock and 10% Series B cumulative
convertible voting preferred stock will have priority of payment over all shares
of Class A Common Stock and Class B Common Stock. See "Description of Capital
Stock."
The shares of Class A Common Stock have low voting power.
Each share of Class A Common Stock has one-twentieth (1/20) of one vote on
all matters requiring a shareholder vote, while each share of Class B Common
Stock, as well as each share of our outstanding preferred stock has one vote
(other than the convertible participating preferred stock which have no votes
and the 6% cumulative voting preferred stock which is only entitled to vote with
respect to the election of directors). In the election of directors and other
matters which are not subject to a class vote, holders of Class A Common Stock
have substantially less voting power than holders of Class B Common Stock
proportionate to the relative market value of those two classes of stock. See
"Description of Capital Stock--Description of Class A Common Stock and Class B
Common Stock--Voting."
There is a concentration of voting power and other indications of influence on
the Company.
As of the date of this prospectus, the Wolcott and Kayser Families
collectively exercise approximately 39% of the total voting power of the Company
in an election of directors. The capital structure and the concentrated
ownership of the Wolcott and Kayser Families in the Class B Common Stock and our
preferred stock are likely to limit substantially the possibility of and chances
of success for a hostile tender offer, which is usually at a premium over the
then-current market price of a target company's stocks or other takeover
proposal or proxy contest which could remove directors if the Wolcott and Kayser
Families are opposed to such offer or proposal.
Carl Marks Strategic Investments, LP (CMSI) and certain other individual
and institutional shareholders which are related to CMSI through family
relationships and common ownership or control exercise in the aggregate
approximately 14% of the total voting power of the Company in an election of
directors. In connection with the 1998 issuance of convertible participating
preferred stock, the size of our Board of Directors was increased from seven to
nine members with designees of this investor group filling the newly created
positions. These designees are required to comprise at least 22% of the
membership of each committee of our Board of Directors. This investor group may
remove its designees and designate other persons to fill the resulting
vacancies. This investor group's right to have its designees nominated to our
Board of Directors and serve on committees of the Board of Directors continues
until such time as it owns less than 10% of the outstanding Class A Common
Stock. (For the purpose of this calculation, we assume conversion of the
convertible participating preferred stock owned by this investor group into
Class A Common Stock.) If we were to issue voting securities in the future, in
certain types of transactions, such as a sale for cash (but not a transaction
pursuant to an employee compensation plan or a business acquisition), this
investor group would have the right to acquire that percentage of the new
issuance equal to its percentage of ownership of Class A Common Stock
immediately prior to the new issuance. For purposes of the calculations in the
two preceding sentences, the outstanding shares of our convertible participating
preferred stock would be counted as if they were outstanding shares of Class A
Common Stock.
Furthermore, our Certificate of Incorporation was amended to require that
the following major corporate actions will require unanimous approval of our
Board of Directors (excluding directors who choose to abstain): (i) the
amendment or modification of our Certificate of Incorporation or Bylaws; (ii) a
merger, consolidation or other form of business combination; (iii) the sale or
other disposition of all or substantially all of our assets; (iv) acquisitions
or dispositions in our food business exceeding $15 million; (v) a change in our
line of food business; (vi) the issuance or acquisition of shares of our capital
stock except for stock buybacks not exceeding $100,000 in any single transaction
and $1 million in the aggregate; (vii) change in our accountants; (viii) the
settlement of litigation involving payment of more than 5% of our adjusted
tangible net worth or our consent to injunctive relief; and (ix) the
commencement of bankruptcy, insolvency or reorganization proceedings. Therefore,
any one director, including either of the investor group's designees, will have
the ability to prevent any of these major decisions from being approved.
Certain anti-takeover provisions may make it difficult for a change in our
control.
Certain provisions of the Alliance Agreement and our credit agreements, our
Certificate of Incorporation, and Bylaws, as amended, could have the effect of
preventing or delaying a person from acquiring or seeking to acquire a
substantial equity interest in, or control of, us. Our Bylaws and Certificate of
Incorporation provide, among other things, for staggered board of directors'
terms. See "Description of Capital Stock--Restrictions on Hostile Acquisitions
of Our Company--Certain Provisions of Our Certificate of Incorporation and
Bylaws." The Alliance Agreement states that it may be terminated by GMOI if any
person acquires 30% or more of the combined voting power of our then outstanding
voting securities, or our shareholders approve certain specified business
transactions. Our long-term credit agreement provides that the lenders may
require us to prepay certain of its indebtedness if (i) any person or group
(other than the Wolcott or Kayser Families) acquires our shares representing 50%
or more of the total number of votes which our shareholders shall be entitled to
cast or (ii) the Wolcott and Kayser Families shall cease to own, directly or
indirectly, at least 25% of the Company. Our short-term credit facility with a
bank provides that an event of default occurs if we allow (i) any person or
group, other than the Wolcott or Kayser Families, to acquire capital stock
possessing either 30% or more of the total number of votes which our
shareholders shall be entitled to cast or the right to elect 30% or more of our
Board of Directors or (ii) during any period of 12 consecutive months, the
individuals who at the beginning of such 12 month period were directors cease
for any reason to constitute a majority of our Board of Directors. The same
default provision is contained in our reimbursement agreement with an
institutional lender which has supported our four major industrial revenue bonds
with a letter of credit.
We have not paid and do not currently intend to pay dividends on our common
stock.
We historically have not declared or paid any cash dividends on our shares
of common stock and do not anticipate paying such dividends in the foreseeable
future. Furthermore, our multi-year credit facilities restrict dividend payments
on our common stocks.
As at March 31, 2004, the most restrictive credit agreement limitation on
the Company's payment of dividends and other distributions, such as purchases of
shares, to holders of Class A or Class B Common Stock is an annual total
limitation of $500,000, reduced by aggregate annual dividend payments totaling
$23,181 which the Company presently pays on two outstanding classes of preferred
stock. Other loan agreements restrict aggregate dividends and other
distributions paid after March 31, 2003 (except the preferred stock dividends
described in the preceding sentence) to the aggregate sum of $1,000,000 plus 50%
of Consolidated Net Income as deferred (or minus 100% of any deficit) for the
entire period beginning April 1, 2003 and ending on the last day of any fiscal
quarter preceding the proposed payment of a dividend or distribution. As stated
above, notwithstanding any permissibility of Class A or Class B Common Stock
dividends and distributions under the credit agreements, the Company does not
presently intend to pay any such dividend. Future credit agreements may also
restrict the payment of dividends on common stock without lender permission.
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table shows our ratios of earnings to combined fixed charges
and preferred stock dividends for the periods shown.
Three Months Ended Year Ended March 31,
---------------------------------- ----------------------------------------------------------------------------
6/26/2004 6/28/2003 2004 2003 2002 2001 2000
--------- --------- ---- ---- ---- ---- ----
2.20 2.20 1.91 1.79 1.09 1.05 1.33
The ratios of earnings to combined fixed charges and preferred stock
dividends were computed by dividing earnings by combined fixed charges and
preferred stock dividends. For this purpose, earnings consist of earnings before
income taxes plus fixed charges. Fixed charges consist of interest expense,
amortization of deferred financing fees and the interest portion of rental
expense.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the Series 2003
Preferred Stock or the Class A Common Stock by the selling shareholder. All
proceeds from the sale of such securities will be solely for the account of the
selling shareholder.
SELLING SHAREHOLDER
The selling shareholder may resell the offered securities from time to time
as provided under the section entitled "Plan of Distribution" in this prospectus
or as described in a prospectus supplement. We are registering the offered
securities as required under the terms of a registration rights agreement
between us and the selling shareholder dated as of May 27, 2003.
The following table sets forth the ownership of the selling shareholder,
the number of shares of Series 2003 Preferred Stock and Class A Common Stock
beneficially owned by the selling shareholder, and the number of shares which
may be offered for resale pursuant to this prospectus. The information included
below is based upon information provided by the selling shareholder. Because the
selling shareholder may offer all, some or none of its shares, the "After
Offering" column of the table assumes the sale of all of its securities;
however, we do not know that this will actually occur.
The selling shareholder has obtained the shares of Series 2003 Preferred
Stock and Class A Common Stock underlying the Series 2003 Preferred Stock
covered in this prospectus in connection with our acquisition of our
wholly-owned subsidiary, Seneca Foods, L.L.C., formerly Chiquita Processed
Foods, L.L.C. from the selling shareholder on May 27, 2003. The Series 2003
Preferred Stock is convertible into 967,742 shares of our Class A Common Stock
subject to adjustment if certain events occur. The issuance of the Series 2003
Preferred Stock to the selling shareholder was deemed to be exempt from the
registration requirements of the Securities Act, pursuant to Section 4(2)
thereof, and was made without general solicitation or advertising. We agreed to
register for resale the securities being offered by this prospectus under the
terms of the registration rights agreement executed in connection with this
transaction.
Chiquita Brands International, Inc. is not a registered broker-dealer, is
not an affiliate of a registered broker-dealer and is the only selling
shareholder with sole voting and investment power over all of the securities set
forth below:
Number of Securities Owned
--------------------------
Security Before Offering After Offering
-------- --------------- --------------
Series 2003 Preferred Stock...................... 967,742 -0-
Class A Common Stock underlying the Series 2003
Preferred Stock.................................. 967,742 -0-
PLAN OF DISTRIBUTION
This prospectus relates to the possible offer and sale from time to time of
up to 967,742 shares of Series 2003 Preferred Stock and up to 967,742 shares of
Class A Common Stock initially issuable upon conversion of the Series 2003
Preferred Stock. The Series 2003 Preferred Stock and Class A Common Stock
offered hereby is offered for the selling shareholder or for the account of
pledgees, donees, transferees or other successors in interest of the selling
shareholder. The selling shareholder may sell securities from time to time, in
one or more types of transactions, which may include sales in the open market,
underwritten offerings or block transactions on a national securities exchange
or automated interdealer quotation system on which the securities are then
listed or quoted, through put or call options transactions relating to the
securities, sales in the over-the-counter market, privately negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices. Such transactions may or may not involve brokers or dealers.
In connection with an underwritten offering, underwriters or agents may
receive compensation in the form of discounts, concessions or commissions from
the selling shareholder or from purchasers of the offered securities for whom
they may act as agents. In addition, underwriters may sell the offered
securities to or through dealers, and those dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
In addition to the foregoing, the methods by which the securities may be
sold include: (i) direct negotiation of a sale by the selling shareholder and
one or more purchasers; (ii) a block trade in which the broker or dealer so
engaged will attempt to sell the securities offered hereby as an agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (iii) purchases by a broker or dealer for its account pursuant to
this prospectus; or (iv) ordinary brokerage transactions and transactions in
which the broker solicits purchases. In effecting sales, brokers or dealers
engaged by the selling shareholder may arrange for other brokers or dealers to
participate. In the event of a transaction hereunder in which a broker or dealer
acts as a principal (other than to facilitate an installment sale transaction,
or to a market maker acting as such in routine transactions in the
over-the-counter market), this prospectus will be supplemented to provide
material facts with respect to such transaction.
In order to comply with the securities laws of certain states, if
applicable, the securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, the securities may not
be sold in certain states unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and complied with.
We entered into a registration rights agreement for the benefit of the
selling shareholder to register the Series 2003 Preferred Stock and the Class A
Common Stock under applicable federal securities laws. The registration rights
agreement provides for cross-indemnification of the selling shareholder and us
and our respective directors and officers against specific liabilities in
connection with the offer and sale of the Series 2003 Preferred Stock and the
Class A Common Stock, including liabilities under the Securities Act. The
selling shareholder will pay all of the expenses incurred incident to the
offering and sale of the Series 2003 Preferred Stock and the Class A Common
Stock.
We have advised the selling shareholder that during the time it may be
engaged in a distribution of the securities offered by this prospectus, it is
required to comply with Regulation M promulgated under the Securities Exchange
Act of 1934. With certain exceptions, Regulation M precludes any selling
shareholder, any affiliated purchasers and any broker-dealer or other person who
participates in the distribution from bidding for or purchasing, or attempting
to induce any person to bid for or purchase, any security which is the subject
of the distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with an at the market offering such as this offering. All
of the foregoing may affect the marketability of the securities.
DESCRIPTION OF CAPITAL STOCK
The following table sets forth the classes of our capital stock
authorized and outstanding as of May 31, 2004:
Number of Shares Number of Shares
Title of Class or Series Authorized Outstanding
------------------------ ---------- -----------
Common Stocks:
Class A Common Stock, $0.25 par value per share.............. 20,000,000 3,950,380
Class B Common Stock, $0.25 par value per share.............. 10,000,000 2,764,005
Preferred Stocks:
Six Percent (6%) Voting Cumulative Preferred Stock, $0.25 par
value per share.......................................... 200,000 200,000
Preferred Stock Without Par Value............................ 30,000 0
Ten Percent (10%) Cumulative Convertible Voting Preferred
Stock--Series A, $0.25 stated value per share............ 1,000,000 407,240
Ten Percent (10%) Cumulative Convertible Voting Preferred
Stock--Series B, $0.25 stated value per share............ 400,000 400,000
Convertible Participating Preferred Stock.................... 4,166,667 3,443,596
Convertible Preferred Stock Series 2003...................... 967,742 967,742
Description of Class A Common Stock and Class B Common Stock
Voting. Under our Charter, the holders of Class A Common Stock and Class B
Common Stock have the right to vote for the election of all directors and on all
other matters submitted to our shareholders. Subject to the Class A special
rights discussed in detail below, each share of Class B Common Stock is entitled
to one full vote on all matters on which shareholders currently are entitled to
vote, including the election of directors. Each holder of Class A Common Stock
is entitled to one-twentieth (1/20) of one vote per share on all matters on
which shareholders are entitled to vote, including the election of directors.
Cumulative voting is not authorized for the holders of common stock. See "Risk
Factors--The shares of Class A Common Stock have low voting power."
The holders of Class A Common Stock are entitled to vote as a separate
class on any proposal to amend the Charter to increase the authorized number of
shares of Class B Common Stock, unless the increased authorization does not
exceed the number of shares of Class B Common Stock which must be issued in a
proposed stock dividend with respect to Class B Common Stock and an equivalent
stock dividend of Class A Common Stock will be effected concurrently with
respect to Class A Common Stock.
In addition, Section 804 of the New York Business Corporation Law confers
upon the holders of Class A Common Stock the right to vote as a class on any
amendment to our Charter which would (i) exclude or limit the shareholders'
right to vote on any matter, except as such rights may be limited by voting
rights given to new shares then being authorized; (ii) change Class A Common
Stock by (a) reducing the par value, (b) changing the shares into a different
number of the same class or into a different or same number of shares of a
different class, or (c) fixing, changing or abolishing the designation of Class
A Common Stock or any series thereof or any of the relative rights, preferences,
and limitations of the shares; or (iii) subordinate their rights by authorizing
shares having preferences which would be in any respect superior to their
rights. Other provisions of the New York Business Corporation Law would entitle
holders of Class A Common Stock to vote as a separate class for approval of any
plan of merger, consolidation or exchange which would effect any change in Class
A Common Stock described in the preceding sentence.
On proposals on which holders of Class A Common Stock are entitled to vote
as a separate class, the proposal must be approved by a majority of the votes of
all outstanding shares of Class A Common Stock. Consequently, holders of Class A
Common Stock, by withholding such approval, can defeat a proposal
notwithstanding that holders of a majority of Class B Common Stock vote in favor
of the proposal.
Dividends and Other Distributions. Each share of Class A Common Stock and
Class B Common Stock is equal in respect to dividends and other distributions in
cash, stock or property except that (i) if declared, a dividend or distribution
in our shares on Class A Common Stock will be paid only in Class A Common Stock,
and (ii) if declared, a dividend or distribution in our shares on Class B Common
Stock will be paid only in Class B Common Stock. The number of shares so paid as
a dividend or distribution on each share of Class A Common Stock and Class B
Common Stock shall be equal, although the class of the shares so paid shall
differ depending upon whether the recipient of the dividend is a holder of Class
A Common Stock or Class B Common Stock.
Mergers and Consolidations. In the event of our merger, consolidation, or
combination with another entity (whether or not we are the surviving entity) or
in the event of our dissolution, the holders of Class A Common Stock will be
entitled to receive the same per share consideration as the per share
consideration, if any, received by holders of Class B Common Stock in that
transaction. However, any shares of common stock that holders of Class A Common
Stock become entitled to receive in the transaction may have terms substantially
similar to the Class A Common Stock themselves. Thus, the surviving entity in
any such transaction could have a dual-class capital structure like ours and
could, upon consummation of the merger or consolidation, give full voting shares
to the holders of Class B Common Stock and one-twentieth (1/20) voting shares to
the holders of Class A Common Stock.
Class A Special Rights. Our Charter contains a two-pronged "Class A special
rights" provision which is intended to protect holders of Class A Common Stock
in the event that a person attempts to gain control of us.
First, the Class A special rights seek to prevent a person who has crossed
a certain ownership threshold from gaining control of us by acquiring Class B
Common Stock without buying Class A Common Stock. If any person acquires more
than 15% of the outstanding Class B Common Stock after August 5, 1995, referred
to herein as the Threshold Date, and does not acquire after the Threshold Date a
percentage of the Class A Common Stock outstanding at least equal to the
percentage of Class B Common Stock that the person acquired in excess of the 15%
threshold, such person will not be allowed to vote shares of Class B Common
Stock acquired in excess of the 15% threshold. For example, if a person acquires
20% of the outstanding Class B Common Stock after the Threshold Date but
acquires no Class A Common Stock, that person would be unable to vote the 5% of
the Class B Common Stock acquired in excess of the 15% threshold. With respect
to persons who owned our common stock on or prior to the Threshold Date, only
shares of Class B Common Stock acquired after the Threshold Date will be counted
in determining whether that shareholder has exceeded the 15% threshold for
acquisitions of Class B Common Stock and only acquisitions of Class A Common
Stock after the Threshold Date will be counted in determining whether that
shareholder's Class A Common Stock acquisitions have been at least equal to the
acquisition of Class B Common Stock in excess of the 15% threshold. The
inability of the person to vote the excess Class B Common Stock will continue
until such time as a sufficient number of shares of Class A Common Stock have
been acquired by the person to satisfy the requirements of the Class A special
rights.
The second prong of the Class A special rights is an "equitable price"
requirement. It is intended to prevent a person seeking to acquire control of us
from paying a discounted price for the Class A Common Stock required to be
purchased by the acquiring person under the first prong of the Class A special
rights. These provisions provide that an equitable price has been paid for
shares of Class A Common Stock only when they have been acquired at a price at
least equal to the greater of (i) the highest per share price paid by the
acquiring person, in cash or in non-cash consideration, for any Class B Common
Stock acquired within the 60 day periods preceding and following the acquisition
of the Class A Common Stock or (ii) the highest closing market sale price of
Class B Common Stock during the 30 day periods preceding and following the
acquisition of the Class A Common Stock. The value of any non-cash consideration
will be determined by our Board of Directors acting in good faith. The highest
closing market sale price of a share of Class B Common Stock will be the highest
closing sale price reported by NASDAQ National Market or on any such other
securities exchange then constituting the principal trading market for either
class of the common stock. In the event that no quotations are available, the
highest closing market sale price will be the fair market value during the 30
day periods preceding and following the acquisition of a share of Class B Common
Stock as determined by our Board of Directors acting in good faith. The
equitable price provision is intended to require a person seeking to acquire
control of us to buy the Class B Common Stock and the Class A Common Stock at
virtually the same time and the same price, as might occur in a tender offer, to
ensure that the acquiring person would be able to vote the Class B Common Stock
acquired in excess of the 15% threshold.
Under the Class A special rights, an acquisition of Class B Common Stock is
deemed to include any shares that an acquiring person acquires directly or
indirectly, in one transaction or a series of transactions, or with respect to
which that person acts or agrees to act in concert with any other person. As
used in the preceding sentence, "person" includes one or more persons and
entities who act or agree to act in concert with respect to the acquisition or
disposition of Class B Common Stock or with respect to proposing or effecting a
plan or proposal to (a) a merger, reorganization or liquidation of us or a sale
of a material amount of our assets, (b) a change in our Board of Directors or
management, including any plan or proposal to fill vacancies on the Board of
Directors or change the number or term of Directors, (c) a material change in
our business or corporate structure, or (d) any material change in our
capitalization or dividend policy. Unless there are affirmative attributes of
concerted action, however, "acting or agreeing to act in concert with any other
person" does not include acts or agreements to act by persons pursuant to their
official capacities as directors or officers of us or because they are related
by blood or marriage.
For purposes of calculating the 15% threshold, the following acquisitions
and increases are excluded: (i) shares of Class B Common Stock held by any
person on the Threshold Date, (ii) an increase in a holder's percentage
ownership of Class B Common Stock resulting solely from a change in the total
number of shares of Class B Common Stock outstanding as a result of our
repurchase of Class B Common Stock since the last date on which that holder
acquired Class B Common Stock, (iii) acquisitions of Class B Common Stock (a)
made pursuant to contracts existing prior to the Threshold Date, including the
acquisition of Class B Common Stock pursuant to the conversion provisions of
Series A preferred stock outstanding prior to the Threshold Date, (b) by bequest
or inheritance or by operation of law upon the death or incompetency of any
individual, and (c) by any other transfer made without valuable consideration,
in good faith and not for the purpose of circumventing the Class A special
rights. A gift made to any person who is related to the donor by blood or
marriage, a gift made to a charitable organization qualified under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, or a successor
provision and a gift to a person who is a fiduciary solely for the benefit of,
or which is owned entirely by, one or more persons or entities (a) who are
related to the donor by blood or marriage or (b) which is a tax-qualified
charitable organization or (c) both will be presumed to be made in good faith
and not for purposes of circumventing the restrictions imposed by the Class A
special rights.
The Class A special rights also provide that, to the extent that the voting
power of any share of Class B Common Stock cannot be exercised pursuant to the
provision, that share will be excluded from the determination of the total
shares eligible to vote for any purpose for which a vote of shareholders is
taken.
Convertibility. The Class B Common Stock is convertible into Class A Common
Stock at any time on a share-for-share basis. The Class A Common Stock is not
convertible into shares of Class B Common Stock unless the number of outstanding
shares of Class B Common Stock falls below 5% of the aggregate number of
outstanding shares of Class B Common Stock and Class A Common Stock. In that
event, immediately upon the occurrence thereof, all of the outstanding Class A
Common Stock is converted automatically into Class B Common Stock on a
share-for-share basis and Class B Common Stock will no longer be convertible
into Class A Common Stock. For purposes of this provision, Class B Common Stock
or Class A Common Stock repurchased by us and not reissued is not considered to
be "outstanding" from and after the date of repurchase.
In the event of any such conversion of the Class A Common Stock,
certificates which formerly represented outstanding shares of Class A Common
Stock thereafter will be deemed to represent a like number of shares of Class B
Common Stock, and all common stock then authorized will be deemed to be Class B
Common Stock.
Preemptive Rights. Neither the Class A Common Stock nor the Class B Common
Stock carry any preemptive rights enabling a holder to subscribe for or receive
shares of the Company of any class or any other securities convertible into any
class of our shares.
Transferability; Trading Market. The Class A Common Stock and the Class B
Common Stock are freely transferable and are listed for trading on the NASDAQ
National Market.
Description of Convertible Preferred Stock Series 2003
Stated Value. The stated value for each share of Series 2003 Preferred
Stock is $15.50.
Dividends and Distributions. The Series 2003 Preferred Stock has the right
to receive dividends or distributions at a rate per share equal to the amount of
any dividend or distribution as that declared or made on any shares of the
Company's stock into which the Series 2003 Preferred Stock is convertible on the
date of such dividend or distribution. Any such dividend or distribution shall
be paid to the holders of the Series 2003 Preferred Stock at the same time such
dividend or distribution is made to the holders of Class A Common Stock.
Dividends and distributions on the Series 2003 Preferred Stock shall be
cumulative from and after the date of issuance of the Series 2003 Preferred
Stock, but any arrearage in payment shall not pay interest. The Series 2003
Preferred Stock ranks junior to the 6% Voting Cumulative Preferred Stock and the
Preferred Stock Without Par Value and on a parity with the 10% Series A
preferred stock, the 10% Series B preferred stock and the other series of
Convertible Participating Preferred Stock as to the payment of dividends or
rights on liquidation, dissolution or winding up of the Company.
Voting Rights. The holders of shares of Series 2003 Preferred Stock are not
entitled or permitted to vote on any matter required or permitted to be voted
upon by shareholders of the Company except as required by law and for class
voting on proposals to: (i) authorize the issuance after May 27, 2003 of any
class of capital stock that will rank as to payment of dividends or rights on
liquidation, dissolution or winding up of the Company senior to the Series 2003
Preferred Stock, (ii) authorize, adopt or approve an amendment to the Charter
that would increase or decrease the par value or stated value of the shares of
Series 2003 Preferred Stock, (iii) amend, alter or repeal the Charter so as to
affect the shares of Series 2003 Preferred Stock adversely or (iv) effect the
voluntary liquidation, dissolution or winding up of the Company, however, no
separate vote of the holders of Series 2003 Preferred Stock shall be required to
effect any of the transactions described in clause (iv) above unless such
transaction would either require a class vote pursuant to clause (i), (ii) or
(iii) above or would require a vote by any shareholders of the Company.
Redemption. The shares of Series 2003 Preferred Stock may not be redeemed
and are not subject to redemption, whether at the option of the Company or any
holder thereof.
Company Acquired Shares. Any shares of Series 2003 Preferred Stock
converted, exchanged, redeemed, purchased or otherwise acquired by the Company
shall be retired and cancelled promptly after acquisition. The cancelled shares
of Series 2003 Preferred Stock shall become authorized but unissued shares of
Class A Preferred Stock, which may (upon filing of an appropriate certificate
with the New York Secretary of State) be reissued as part of another series of
Class A Preferred Stock subject to certain conditions or restrictions on
issuance, but in any event may not be reissued as shares of Series 2003
Preferred Stock unless all shares of Series 2003 Preferred Stock issued on May
27, 2003 have already been converted or exchanged.
Conversion. Subject to certain limitations discussed below, any holder of
Series 2003 Preferred Stock shall have the right, at its option, at any time, to
convert any or all of the holder's shares of Series 2003 Preferred Stock into
such number of fully paid and non-assessable shares of Class A Common Stock as
is equal to the product of the number of Conversion Shares, multiplied by the
quotient of (i) the Stated Value divided by (ii) the conversion price of $15.50
per share (the "Conversion Price"). Unless prohibited by law on the date of
conversion, all unpaid dividends declared (whether or not currently payable) on
the Series 2003 Preferred Stock so converted shall be immediately due and
payable and must accompany the shares of Class A Common Stock issued upon such
conversion. Upon conversion of any shares of Series 2003 Preferred Stock, the
Company shall not issue any fractional shares or scrip representing fractional
shares and, in lieu thereof, the Company shall issue cash in lieu of fractional
shares in an amount equal to such fraction multiplied by the current market
price of the Class A Common Stock on the business day preceding the date the
shares are converted. The same rights and limitations apply if the Series 2003
Preferred Stock is convertible into any securities or property other than Class
A Common Stock.
The Conversion Price shall be subject to adjustment if: (i) the Company
shall at any time or from time to time (A) pay a dividend or make a distribution
on the outstanding shares of Class A Common Stock in Class A Common Stock, (B)
sub-divide the outstanding shares of Class A Common Stock into a larger number
of shares, (C) combine the outstanding shares of Class A Common Stock into a
smaller number of shares or (D) issue any shares of its capital stock in a
reclassification of the Class A Common Stock; (ii) the Company shall at any time
or from time to time issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock), or any options,
warrants or other rights to acquire shares of Common Stock (other than (x)
options granted to any employee or director of the Company pursuant to a stock
option plan approved by the shareholders of the Company, (y) options, warrants
or rights granted to each holder of Class A Common Stock or (z) rights issued
pursuant to a shareholder right plans, "poison pill" or similar arrangement in
accordance with the Charter) for a consideration per share less than the current
market price (as defined in the Charter) at the record date or issuance date;
(iii) the Company or any subsidiary thereof shall at any time or from time to
time while any of the Series 2003 Preferred Stock is outstanding, make a
purchase by the Company of the Common Stock effected while any of the shares of
Series 2003 Preferred Stock are outstanding, which purchase is subject to
Section 13(e) of the Exchange Act or is made pursuant to an offer made available
to all holders of Class A Common Stock or Class B Common Stock; or (iv) the
Company at any time or from time to time shall take any action affecting its
Class A Common Stock, other than an action permitted by the Charter.
The Company may make such reductions in the Conversion Price, in addition
to those required by subparagraphs (i) through (iv) above, as the Board of
Directors considers to be advisable in order to avoid or to diminish any income
tax to holders of Class A Common Stock or rights to purchase Class A Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
Notwithstanding anything herein to the contrary, no adjustment of the Conversion
Price (i) shall be required by reason of the initial issuance or sale of any of
the 967,742 authorized shares of Series 2003 Preferred Stock or (ii) need to be
made to the Conversion Price unless such adjustment would require an increase or
decrease of at least 1% of the Conversion Price then in effect. Any lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment, which, together with any
adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least 1% of such Conversion Price. Any adjustment to the
Conversion Price carried forward and not theretofore made shall be made
immediately prior to the conversion of any shares of Series 2003 Preferred Stock
pursuant hereto; provided, however, that any such adjustment shall in any event
be made no later than one year after the occurrence of the event giving rise to
such adjustment.
In addition, no adjustment to the Conversion Price will be made if certain
of these adjustments will, either singly or after giving effect to prior
adjustments, cause the number of shares of Class A Common Stock issuable upon
conversion of the shares of Series 2003 Preferred Stock to exceed 1,328,421
shares.
Description of Other Preferred Stocks
No dividends or other distributions are payable on our common stock unless
dividends or distributions are first paid on the preferred stock. In the event
of our liquidation or dissolution, the outstanding shares of preferred stock and
convertible participating preferred stock (see "Risk Factors--The convertible
participating preferred stock and other preferred stock have priority over the
common stock in the event of liquidation or dissolution.") would have priority
over the common stock in the distribution of our remaining assets. The 10%
Series A preferred stock is convertible into shares of common stock on the basis
of one share of Class A Common Stock and one share of Class B Common Stock for
every 20 shares of 10% Series A preferred stock.
The 10% Series B preferred stock is convertible into common stock on the
basis of one share of Class A Common Stock and one share of Class B Common Stock
for every 30 shares of 10% Series B preferred stock. The convertible
participating preferred stock, including the Series 2003 Preferred Stock, is
convertible on a share-for-share basis into shares of Class A Common Stock.
Restrictions on Hostile Acquisitions of Our Company--Certain Provisions of Our
Certificate of Incorporation and Bylaws
In addition to the restrictions imposed by the "Class A special rights"
provisions, the Charter contains two super-majority voting provisions. Paragraph
5 of the Charter provides that the affirmative vote of two-thirds of the shares
present and entitled to vote at the meeting is necessary to amend our Bylaws.
Paragraph 6 provides that a director may be removed regardless of cause only
upon the affirmative vote of two-thirds of the shares entitled to vote for the
election of that director. Both of these provisions reduce the possibility of
the shareholders receiving and accepting hostile takeover bids, mergers, proxy
contests, removal of current management, removal of directors or other changes
in control.
Our Bylaws require the affirmative vote of two-thirds of the shares present
and entitled to vote to (i) effectuate an amendment to the Bylaws and (ii)
remove a director.
The Bylaws provide for the staggered voting of directors for three-year
terms so that shareholders desiring to replace the incumbent directors and gain
control of the Board would be required to win at least two successive annual
contests before their nominees constituted a majority of directors. See "Risk
Factors--Certain anti-takeover provisions may make it difficult for a change in
our control."
Shareholders Agreement
In connection with the 1998 issuance of our convertible participating
preferred stock, we and certain of our substantial shareholders agreed that they
would facilitate the election of two nominees of the investor group affiliated
with the selling shareholder to our nine-person Board of Directors, that the
investor group would have at least 22% representation on committees of the Board
and that certain major corporate actions would require unanimous approval of the
Board of Directors.
Agreements Restricting Change in Control
The Alliance Agreement and certain significant agreements between us and
our lenders provide for penalties in the event of our change of control as
defined in the respective agreements.
LEGAL MATTERS
The legality of the securities and certain other legal matters have been
passed upon for us by Jaeckle Fleischmann & Mugel, LLP, Buffalo, New York.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule as of March 31, 2004 and for the year then ended,
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended March 31, 2004 have been audited by Ernst & Young
LLP, independent registered public accounting firm, as stated in their reports,
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements and the related consolidated
financial statement schedule as of March 31, 2003 and for the years ended March
31, 2003 and 2002, incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended March 31, 2004 have been
audited by Deloitte & Touche LLP, independent registered public accounting firm,
as stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
II-5
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in connection with the
issuance and distribution of the securities. The selling shareholder will be
responsible for the payment of these expenses. All amounts shown are estimated
except the Securities and Exchange Commission registration fee.
Filing and Registration Fees....................................$2,239
Legal Fees and Expenses.........................................19,000
Accounting Fees and Expenses....................................49,000
Miscellaneous Expenses...........................................2,761
Total $73,000
Item 15. Indemnification of Directors and Officers.
Our Charter provides that we are required to indemnify each and every
officer or director of the Company, even those whose term has expired, for any
and all expenses actually and necessarily incurred by such director or officer
in connection with the defense of any action, suit or proceeding in which he is
made a party by reason of being or having been a director or officer of the
Company. We are not required to indemnify a director or officer for matters as
to which such officer or director is adjudged to be liable for neglect or
misconduct in the performance of his duties as director or officer. Further, the
rights of the officers or directors to indemnification are not exclusive of any
other rights to which an officer or director of the Company is entitled.
Under our Bylaws, as amended (the "Bylaws"), the Company has the authority
to indemnify its directors and officers to the fullest extent permitted by the
New York Business Corporation Law (Sections 721-726) (the "BCL"). The Bylaws,
reflecting New York law, extend such protection to any person made or threatened
to be made a party to any action or proceeding, including an action by or in the
right of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director, officer or employee of the
Company served in any capacity at the request of the Company, by reason of the
fact that such director or officer, his testator or intestate, is or was a
director or officer of the Company or is or was serving such enterprise at the
request of the Company. The Bylaws provide that such indemnification may be
authorized pursuant to the terms and conditions of (i) a resolution of
shareholders; (ii) a resolution of the Board of Directors; (iii) an agreement
providing for such indemnification; or (iv) any judicial or other legal
authority which entitles the director, officer or employee to such
indemnification.
The BCL provides that, if successful on the merits or otherwise, an officer
or director is entitled to indemnification by the Company against amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of such action or
proceeding, or any appeal therein, if such director or officer acted in good
faith, for a purpose which he reasonably believed to be in, or at least not
opposed to, the best interests of the Company. The termination of any action or
proceeding by judgment, settlement, conviction or plea of nolo contendere, or
its equivalent, does not itself create the presumption that such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or not opposed to, the best interests of the Company or that he had
reasonable cause to believe that his conduct was unlawful.
If a corporation fails to provide indemnification to its directors or
officers, the BCL provides that despite any contrary resolution of the board of
directors or shareholders, indemnification may be awarded by application to the
appropriate judicial authority. Application for such court-ordered
indemnification may be made either in the civil action or proceeding in which
the expenses were incurred or other amounts were paid or to the supreme court in
a separate proceeding.
Item 16. Exhibits.
Exhibit
Number Description
3.1 The Company's Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3.1 to the Company's Form
10-Q/A filed August 1995 for the quarter ended July 1, 1995)
3.2 Certificate of Amendment to the Company's Restated Certificate of
Incorporation, as amended (incorporated by reference to Exhibit 3.2
to the Company's Form 10-Q/A filed August 1995 for the quarter ended
July 1, 1995)
3.3 Certificate of Amendment to the Company's Restated Certificate of
Incorporation, as amended (incorporated by reference to Exhibit 3
to the Company's Form 10-K for the fiscal year ended March 31, 1996)
3.3 Certificate of Amendment to the Company's Restated Certificate of
Incorporation, as amended (incorporated by reference to Exhibit
3(i) to the Company's Current Report on Form 8-K dated September 17,
1998)
3.4 Certificate of Amendment to the Company's Restated Certificate of
Incorporation, as amended (incorporated by reference to Exhibit 3 to
the Company's Current Report on Form 8-K dated June 10, 2003)
3.5 Certificate of Amendment to the Company's Restated Certificate of
Incorporation, as amended (incorporated by reference to Exhibit 3 to
the Company's Current Report on Form 8-K dated June 18, 2004)
3.6 The Company's Bylaws as amended (incorporated by reference to
Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q/A filed
August 1995)
5 Opinion of Jaeckle Fleischmann & Mugel, LLP regarding legality
of securities being registered (previously filed)
12 Statement of the Computation of the Ratio of Earnings to Fixed Charges
(filed herewith)
23.1 Consent of Ernst & Young LLP (filed herewith)
23.2 Consent of Deloitte & Touche LLP (filed herewith)
23.3 Consent of Jaeckle Fleischmann & Mugel, LLP (incorporated by reference
to Exhibit 5 above)
24 Powers of Attorney (include on signature page)
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Sections 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the town of Marion, state of New
York, on September 1, 2004.
SENECA FOODS CORPORATION
By: /s/Philip G. Paras
------------------------
Philip G. Paras
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the capacity
and on the date indicated.
Signature Title Date
--------- ----- ----
* Chairman and Director
- ------------------------------------
Arthur S. Wolcott
* President, Chief Executive
- ------------------------------------
Kraig H. Kayser Officer and Director
* Chief Financial Officer
- ------------------------------------
Philip G. Paras
* Controller and Secretary
- ------------------------------------
Jeffrey L. Van Riper
* Director
- ------------------------------------
Arthur H. Baer
* Director
- ------------------------------------
Andrew M. Boas
* Director
- ------------------------------------
Robert T. Brady
* Director
- ------------------------------------
Douglas F. Brush
* Director
- ------------------------------------
G. Brymer Humphreys
/s/Thomas Paulson Director August 24, 2004
- ------------------------------------
Thomas Paulson
* Director
- ------------------------------------
Susan W. Stuart
*/s/Kraig H. Kayser
- ------------------------------------
Kraig H. Kayser
Individually and as Director August 25, 2004
Attorney-In-Fact
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that I, THOMAS PAULSON whose signature appears
below, hereby constitutes and appoints each of Arthur S. Wolcott or Kraig H.
Kayser my true and lawful attorney-in-fact and agent, each with full power of
substitution and revocation, for me and in my name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each attorney-in-fact and
agent, full power and authority to do and perform each such and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as such I might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his/her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/Thomas Paulson Director August 24, 2004
- ---------------------------------------
Thomas Paulson