As filed with the Securities and Exchange Commission on February 25, 2005
Registration No. 333-120982
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
- ------------------------------------------------------------------------------------------------------------------------------------
633,000 $18.25 (2) $11,552,250 (2) $1,464 (5)
Convertible Participating
Preferred Stock (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Common Stock (3) 633,000 (4) (4) 0
====================================================================================================================================
<FN>
(1) The Convertible Participating Preferred Stock ("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
Preferred Stock. The Class A Common Stock into which the 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 Preferred Stock may be converted.
There currently is no trading market for the 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 November 29, 2004.
(3) Includes an indeterminate number of shares of Class A Common Stock
as may be issuable upon conversion of the 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 Preferred Stock, no
registration fee is payable on the underlying Class A
Common Stock pursuant to Rule 457(i).
(5) Previously paid by the Registrant in connection with the original
filing of this registration statement on December 3, 2004.
</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 February 25, 2005
PROSPECTUS
SENECA FOODS CORPORATION
633,000 shares of Convertible Participating Preferred Stock
and shares of Class A Common Stock Issuable upon
Conversion of the Convertible Participating Preferred Stock
This prospectus relates to the public resale, from time to time, of up to
633,000 shares of Convertible Participating Preferred Stock (the "Preferred
Stock") by the selling stockholders named in this prospectus. If the selling
shareholders or their transferees convert all of their Preferred Stock, we will
issue up to a total of 633,000 shares of Class A Common Stock, par value $0.25
per share (the "Class A Common Stock"), subject to any adjustments.
We are registering the offered securities as required under the terms of a
registration rights agreement for the benefit of the selling shareholders. This
prospectus will be used by the selling shareholders to resell their Preferred
Stock and 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 shareholders reserve 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 shareholders.
Our Class A Common Stock is quoted on the NASDAQ National Market under the
symbol "SENEA." On February 24, 2005, the last reported sale price for our Class
A Common Stock was $16.75 per share. The 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 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.......................................14
USE OF PROCEEDS..................................................................................................15
SELLING SHAREHOLDERS.............................................................................................15
PLAN OF DISTRIBUTION.............................................................................................17
DESCRIPTION OF CAPITAL STOCK.....................................................................................18
LEGAL MATTERS....................................................................................................25
EXPERTS..........................................................................................................25
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 14 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 quarters ended June 26, 2004,
September 25, 2004 and December 25, 2004;
o........Our Current Reports on Form 8-K filed with the SEC on June 18, 2004,
June 30, 2004, August 4, 2004, September 28, 2004, October 1, 2004,
November 4, 2004 and November 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. In fiscal 2004, 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.
In fiscal 2004, 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 affect 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. Moreover, vegetable production
outside the United States, particularly in Asia and Latin America, is increasing
and, in the future, may have a significant effect on competition and create
downward pressure on prices.
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.
Adverse growing conditions in the second quarter of fiscal year 2005 in the
upper Midwestern United States, our major growing region, resulted in a delayed
start for our corn production. This was followed by a freeze in late September
2004. These events, which we cannot control, reduced our anticipated corn
harvest. Corn is our largest volume vegetable product. We anticipate an adverse
effect on our operating results which is not yet calculable, as the adverse
effects of the lower production may be partly mitigated by higher prices for
corn products.
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 December 25, 2004, we had a total of approximately $254 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 affect 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.
Green Giant volume has declined over the past three years. This is
reflected in a $42 million reduction in GMOI sales from fiscal year 2001 to
fiscal year 2004.
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. During the second quarter of our fiscal year
2005, the Company recalled certain products and recognized a charge of
$1,280,000 as previously reported.
We generate agricultural food processing wastes and are subject to substantial
environmental regulation.
As a vegetable processor, we regularly dispose of vegetable wastes (silage)
and processing water, as well as materials used in plant operation and
maintenance, and our plant boilers, which generate heat used in processing,
produce generally small emissions into the air. These activities and operations
are regulated by federal and state laws and the respective federal and state
environmental agencies. Occasionally, we may be required to remediate conditions
found by the regulators to be in violation of environmental law or to contribute
to the cost of remediating waste disposal sites which we neither owned nor
operated but in which we and many other companies deposited waste materials,
usually through independent waste disposal companies. The costs of these
remediations and contributions (including occasional fines) have not been
significant. As a major vegetable producer, we run the risk of occasional future
costs and inadvertent violations, even though we maintain an environmental
department to assist us in environmental compliance.
We have been advised by the office of the New York State Attorney General
that it will seek reimbursement from us and other potentially responsible
parties for the costs incurred by New York in the cleanup of a closed landfill
in Yates County in Central New York. We did not own or operate the landfill,
but, in the early to mid-1970s, we disposed in it certain waste materials,
including empty paint cans, from a plant in Yates County formerly owned by us
and sold in 1998. We were not a major waste contributor to the landfill during
its operation. The Attorney General is permitting us and other known depositors
in the landfill to identify and search for other depositors in the landfill. A
publication of the New York Department of Environmental Conservation in 2003
stated that approximately $4.6 million had been expended by New York on cleanup
and containment of the landfill. We cannot reliably estimate what our share of
the reimbursement liability will be until we have identified other financially
responsible depositors of waste in the landfill who still exist and have
determined the character and volume of the wastes which they deposited.
Moreover, we will need to reach a reasonable allocation of costs with the other
depositors of wastes and the Attorney General.
Absence of a public trading market may affect the value of the 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 Preferred Stock and
none may ever develop. The absence of a public market may affect the value of
the Preferred Stock.
The Preferred Stock and other classes 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 (collectively, the "Marks Investor
Group") exercise in the aggregate approximately 15% of the total voting power of
the Company in an election of directors. In connection with the original
issuance of the 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
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 December 25, 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 defined (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.
Nine Months Ended Year Ended March 31,
---------------------------- ------------------------------------------------------------------
12/25/2004 12/27/2003 2004 2003 2002 2001 2000
---------- ---------- ---- ---- ---- ---- ----
1.50 1.91 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 Preferred
Stock or the Class A Common Stock by the selling shareholders. All proceeds from
the sale of such securities will be solely for the account of the selling
shareholder.
SELLING SHAREHOLDERS
The selling shareholders 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 dated as of June 22, 1998.
The following table sets forth the ownership of the selling shareholders
and the number of shares of Preferred Stock and Class A Common Stock
beneficially owned by the selling shareholders. All of such shares may be
offered for resale pursuant to this prospectus. The information included below
is based upon information provided by the selling shareholders. Because the
selling shareholders 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.
None of the selling shareholders has held a position or office or had a
material relationship with us within the past three years other than as a result
of the ownership of our common stock or other securities of ours or as a result
of being a service provider to us.
Number of Shares of Preferred Stock (Including the Underlying
Shares of Class A Common Stock) Owned
-------------------------------------------------------------
Name Before Offering After Offering
---- --------------- --------------
Franklin Microcap Value Fund (1) 200,000 -0-
LCLR, Ltd. (2) 25,000 -0-
Boericke, John 1,000 -0-
Christiansen, Nina IRA 500 -0-
Christiansen, Steve IRA 1,000 -0-
Cotswold Foundation (3) 20,000 -0-
Davidson Trust fbo Ana 7,000 -0-
Davidson Trust fbo Susan 7,000 -0-
Davison, William 1,300 -0-
Dupee, Matt IRA 1,000 -0-
Dupee, Susan IRA 1,500 -0-
Durham, Bob 3,000 -0-
Eleventh Generation (3) 60,000 -0-
Fekete, Edith IRA 1,000 -0-
Fekete, Lorand IRA 1,000 -0-
Gibbons, William 2,000 -0-
Graham, William 2,000 -0-
Haaland, Marie 1,000 -0-
Hamilton, A fbo Anne 4,000 -0-
Hamilton, A fbo Martha 5,500 -0-
Hamilton, H fbo Anne 6,200 -0-
Hamilton, H fbo Martha 10,000 -0-
Kane, Gregg 2,000 -0-
Kelley, Kate Trust 1,000 -0-
Lihota, Gerald 3,000 -0-
Lihota, Karlene 1,000 -0-
Looney, John IRA 5,000 -0-
Milne, David IRA 1,500 -0-
Morris, Eleanor Trust 11,300 -0-
Morris, Lydia Trust 7,000 -0-
Morris, I. Wistar IRA 60,000 -0-
Morris, I. Wistar 60,000 -0-
Morris, I Wistar 4,000 -0-
Morris, IW JR Trust 12,500 -0-
Morris, Martha 60,000 -0-
Murphy, Poco 7,000 -0-
Oehrle, Albert 3,000 -0-
Ravenscroft, Susan IRA 1,000 -0-
Retirement Investments (3) 2,500 -0-
Salisbury, Anne 3,000 -0-
Salisbury, Gregg IRA 400 -0-
Salisbury, Leland CRT 800 -0-
Salisbury, Leland IRA 400 -0-
Savage, Neil 2,000 -0-
Seibert, Kimberly 10,400 -0-
Simmons, Jeff IRA 1,500 -0-
Simmons, Kathy IRA 500 -0-
Spencer, Scott 2,000 -0-
Strickland, Ben 1,200 -0-
Rome, Joel 5,000 -0-
Rome, Ann Dee 3,000 -0-
- ---------------
<FN>
(1)......William J. Lippman, President of Franklin MicroCap Value Fund, is the
natural control person who has the power to sell, transfer or otherwise dispose
of these shares. (2)......Harold Scattergood is the natural control person who
has the power to sell, transfer or otherwise dispose of these shares.
(3)......Wistar Morris is the natural control person who has the power to sell,
transfer or otherwise dispose of these shares.
</FN>
PLAN OF DISTRIBUTION
This prospectus relates to the possible offer and sale from time to time of
up to 633,000 shares of Preferred Stock and up to 633,000 shares of Class A
Common Stock initially issuable upon conversion of the Preferred Stock. The
Preferred Stock and Class A Common Stock offered hereby is offered for the
selling shareholders or for the account of pledgees, donees, transferees or
other successors in interest of the selling shareholders. The selling
shareholders 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 shareholders 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 a 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
a 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 shareholders to register their shares of Preferred Stock and the Class A
Common Stock under applicable federal securities laws. The registration rights
agreement provides for cross-indemnification of the selling shareholders and us
and our respective directors and officers against specific liabilities in
connection with the offer and sale of the Preferred Stock and the Class A Common
Stock, including liabilities under the Securities Act. The selling shareholders
will pay all of the expenses incurred incident to the offering and sale of the
Preferred Stock and the Class A Common Stock.
We have advised the selling shareholders 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 December 25, 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 Preferred Stock
Stated Value. The stated value for each share of Preferred Stock is $12.00.
Dividends and Distributions. The 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 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 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
Preferred Stock shall be cumulative from and after the date of issuance of the
Preferred Stock, but any arrearage in payment shall not pay interest. The
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 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 September 2, 1998 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 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 Preferred
Stock, (iii) amend, alter or repeal the Charter so as to affect the shares of
Preferred Stock adversely or (iv) effect the voluntary liquidation, dissolution
or winding up of the Company, however, no separate vote of the holders of
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 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 Preferred Stock converted,
exchanged, redeemed, purchased or otherwise acquired by the Company shall be
retired and cancelled promptly after acquisition. The cancelled shares of
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 Preferred Stock unless all shares of
Preferred Stock issued on September 2, 1998 have already been converted or
exchanged.
Conversion. Subject to certain limitations discussed below, any holder of
Preferred Stock shall have the right, at its option, at any time, to convert any
or all of the holder's shares of 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 $12.00 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 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 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 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 Preferred Stock is outstanding, make a purchase by the
Company of the Common Stock effected while any of the shares of 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 4,166,667 authorized shares of 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 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.
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 Preferred
Stock and other classes of our preferred stock have priority over the Class A
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 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 the Preferred Stock, we and certain
of our substantial shareholders agreed that they would facilitate the election
of two nominees of the Marks Investor Group to our nine-person Board of
Directors, that the Marks 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, an 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 as of March 31, 2003 and for the
years ended March 31, 2003 and 2002, and the related consolidated financial
statement schedules for 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, an
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.
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..................................$ 1,464
Legal Fees and Expenses.........................................15,000
Accounting Fees and Expenses....................................36,000
Miscellaneous Expenses........................................ 536
--------
Total $53,000
=======
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 (incorporated by reference to Exhibit 5 to the
Company's Registration Statement on Form S-3 filed with the SEC on December
3, 2004)
10 Registration Rights Agreement dated as of June 22, 1998 (incorporated by
reference to Exhibit 2(c) to the Company's Current Report on Form 8-K filed
July 2, 1998)
12 Statement Regarding the Computations of the Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends (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 (incorporated by reference to Exhibit 24 to the
Company's Registration Statement on Form S-3 filed with the SEC on December
3, 2004)
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
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 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 February 25, 2005.
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 amendment
to the Registration Statement has been signed by Kraig H. Kayser on February 25,
2005, individually and as attorney-in-fact for the following persons:
Signature Title
--------- -----
________*________
-
Arthur S. Wolcott Chairman and Director
________*________ President, Chief Executive
-
Kraig H. Kayser Officer and Director
________*________
-
Philip G. Paras Chief Financial Officer
________*________
-
Jeffrey L. Van Riper Controller and Secretary
________*________
-
Arthur H. Baer Director
________*________
-
Andrew M. Boas Director
________*________
-
Robert T. Brady Director
________*________
-
Douglas F. Brush Director
________*________
-
G. Brymer Humphreys Director
________*________
-
Thomas Paulson Director
________*________
-
Susan W. Stuart Director
* /s/ Kraig H. Kayser
Individually and as Attorney-In-Fact
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