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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
File Number 0-20539
PRO-FAC COOPERATIVE, INC.
(Exact Name of Registrant as Specified in its Charter)
New York 16-6036816
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification Number)
90 Linden Place, PO Box 682, Rochester, NY 14603
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (716) 383-1850
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of October 10, 1997.
Common Stock - 1,749,580
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Statement of Operations and Net Proceeds
(Dollars in Thousands)
<CAPTION>
Quarter Ended
September 27, September 28,
1997 1996
<S> <C> <C>
Net sales $176,397 $174,000
Cost of sales 130,748 132,309
-------- --------
Gross profit 45,649 41,691
Selling, administrative, and general expense (32,758) (32,916)
-------- --------
Operating income 12,891 8,775
Interest expense (7,770) (9,881)
-------- --------
Income/(loss) before taxes, dividends, allocation of net proceeds, and
cumulative effect of an accounting change 5,121 (1,106)
Tax provision (1,822) (527)
-------- --------
Income/(loss) before cumulative effect of an accounting change,
dividends, and allocation of net proceeds $ 3,299 (1,633)
Cumulative effect of an accounting change 0 4,516
-------- --------
Net income $ 3,299 $ 2,883
======== ========
Allocation of Net Proceeds:
Net income $ 3,299 $ 2,883
Dividends on common and preferred stock (1,850) (1,335)
-------- --------
Net proceeds 1,449 1,548
Allocation to earned surplus (788) (1,035)
-------- --------
Net proceeds available to members $ 661 $ 513
======== ========
Net Proceeds Available to Members:
Estimated cash payment $ 165 $ 103
Qualified retains 496 410
-------- --------
Net proceeds available to members $ 661 $ 513
======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Balance Sheet
<CAPTION>
(Dollars in Thousands) September 27, June 28, September 28,
1997 1997 1996
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 3,997 $ 2,838 $ 6,682
Accounts receivable, trade, net 65,053 48,661 62,020
Accounts receivable, other 3,845 2,795 6,268
Inventories -
Finished goods 140,056 87,904 158,474
Raw materials and supplies 28,396 27,001 35,161
-------- -------- --------
Total inventories 168,452 114,905 193,635
-------- -------- --------
Prepaid manufacturing expense 0 8,265 1,111
Prepaid expenses and other current assets 8,464 6,323 8,742
Current deferred tax assets 12,312 12,312 13,731
Current investment in Bank 631 946 0
--------- -------- ---------
Total current assets 262,754 197,045 292,189
Investment in Bank 24,320 24,321 24,439
Investment in Great Lakes Kraut Company 6,585 0 0
Property, plant, and equipment, net 209,216 217,923 269,254
Assets held for sale 3,259 3,259 5,113
Goodwill and other intangible assets, net 95,503 96,429 102,734
Other assets 7,525 7,700 12,550
-------- -------- ---------
Total assets $609,162 $546,677 $706,279
LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION ======== ======== ========
Current liabilities:
Notes payable $ 64,000 $ 0 $ 63,000
Current portion of obligations under capital leases 558 558 548
Current portion of long-term debt 8,073 8,075 8,075
Accounts payable 39,175 49,256 46,188
Income taxes payable 5,386 5,672 3,961
Accrued interest 3,960 8,663 4,767
Accrued employee compensation 7,981 11,063 8,143
Accrued manufacturing expense 2,899 0 0
Other accrued expenses 21,681 21,956 27,554
Dividends payable 0 61 0
Amounts due members 27,808 15,791 27,051
-------- -------- --------
Total current liabilities 181,521 121,095 189,287
Long-term debt 70,528 69,829 162,164
Senior subordinated notes 160,000 160,000 160,000
Obligations under capital leases 817 817 1,125
Deferred income tax liabilities 39,591 39,591 44,753
Other non-current liabilities 22,962 22,682 20,713
-------- -------- --------
Total liabilities 475,419 414,014 578,042
-------- -------- --------
Commitments and contingencies
Class B cumulative redeemable preferred stock liquidation preference $10 per
share, authorized - 500,000 shares; issued
and outstanding 31,435, 31,435, and 33,364 shares, respectively 314 315 334
Common stock, par value $5, authorized - 5,000,000 shares
September 27, June 28, September 28,
1997 1997 1996
Shares issued 1,749,580 1,788,815 1,855,329
Shares subscribed 44,808 54,557 57,859
--------- --------- ---------
Total subscribed and issued 1,794,388 1,843,372 1,913,188
Less subscriptions receivable in installments (44,808) (54,557) (57,859)
--------- --------- ---------
1,749,580 1,788,815 1,855,329 8,748 8,944 9,277
========= ========= =========
Shareholders' and members' capitalization:
Retained earnings allocated to members 32,409 31,920 32,728
Non-qualified allocation to members 2,960 2,960 3,275
Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
issued and outstanding - 53,797,
53,797, and 105,788, respectively 1,345 1,345 2,645
Class A cumulative preferred stock, liquidation preference
$25 per share; authorized - 49,500,000 shares; issued and
outstanding 3,215,709, 3,215,709 and 3,032,704 shares,
respectively 80,393 80,393 75,818
Earned surplus 7,574 6,786 4,160
-------- -------- --------
Total shareholders' and members' capitalization 124,681 123,404 118,626
-------- -------- --------
Total liabilities and capitalization $609,162 $546,677 $706,279
======== ======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative Inc.
Consolidated Statement of Cash Flows
<CAPTION>
(Dollars in Thousands)
Quarter Ended
September 27, September 28,
1997 1996
------------------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,299 $ 2,883
Amounts payable to members (165) (103)
Adjustments to reconcile net income to net cash provided by operating
activities:
Cumulative effect of an accounting change 0 (4,516)
Amortization of goodwill and other intangibles 990 1,093
Amortization of debt issue costs 199 200
Depreciation 4,597 6,135
Change in assets and liabilities:
Accounts receivable (17,442) (14,215)
Inventories (55,722) (63,061)
Accounts payable and accrued expenses (6,976) (629)
Amounts due to members 12,017 19,176
Federal and state taxes refundable (286) 471
Other assets and liabilities (2,463) (2,236)
--------- ---------
Net cash used in operating activities (61,952) (54,802)
--------- ---------
Cash flows from investing activities:
Purchase of property, plant, and equipment (3,231) (3,920)
Disposals of property, plant, and equipment 375 293
Proceeds from investment in CoBank 316 0
--------- ---------
Net cash used in investing activities (2,540) (3,627)
--------- ---------
Cash flows from financing activities:
Proceeds from short-term debt 64,000 63,000
Proceeds from long-term debt 2,000 0
Proceeds from Great Lakes Kraut Company 3,000 0
Payments on long-term debt (1,303) (5,519)
(Repurchases)/issuances of common stock (196) 92
Cash dividends paid (1,850) (1,335)
--------- ---------
Net cash provided by financing activities 65,651 56,238
--------- ---------
Net change in cash and cash equivalents 1,159 (2,191)
Cash and cash equivalents at beginning of period 2,838 8,873
--------- ---------
Cash and cash equivalents at end of period $ 3,997 $ 6,682
========= =========
Supplemental Disclosure of Cash Flow Information:
Investment in Great Lakes Kraut Company
Inventories $ 2,175
Prepaid expenses and other current assets 409
Property, plant, and equipment 6,966
Other accrued expenses (62)
---------
$ 9,488
=========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
PRO-FAC COOPERATIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles and, in the opinion
of management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results of operations for
these periods. The following summarizes the significant accounting policies
applied in the preparation of the accompanying financial statements. These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in Pro-Fac's Form 10-K for the fiscal year
ended June 28, 1997.
Consolidation: The consolidated financial statements include the Cooperative and
its wholly-owned subsidiary, Agrilink Foods, Inc. ("Agrilink" or "the Company")
after elimination of intercompany transactions and balances. Agrilink was
formerly known as Curtice Burns Foods, Inc. (see NOTE 3 - "Other Matters").
Change in Accounting Principle: Effective June 30, 1996, accounting procedures
were changed to include in prepaid expenses and other current assets,
manufacturing spare parts previously charged directly to expense. The favorable
cumulative effect of the change (net of income taxes of $1.2 million) was $4.5
million. Pro forma amounts for the cumulative effect of the accounting change on
prior periods are not determinable due to the lack of physical inventory counts
required to establish quantities at the respective dates.
NOTE 2. AGREEMENTS WITH AGRILINK
The contractual relationship between Agrilink and Pro-Fac is defined in the
Pro-Fac Marketing and Facilitation Agreement ("Agreement"). Under the Agreement,
the Company pays Pro-Fac the commercial market value ("CMV") for all crops
supplied by Pro-Fac. CMV is defined as the weighted average price paid by other
commercial processors for similar crops sold under preseason contracts and in
the open market in the same or competing market area. Although CMV is intended
to be no more than the fair market value of the crops purchased by Agrilink, it
may be more or less than the price Agrilink would pay in the open market in the
absence of the Agreement.
Under the Agreement the Company is required to have on its board of directors
some persons who are neither members of nor affiliated with Pro-Fac
("Disinterested Directors"). The number of Disinterested Directors must at least
equal the number of directors who are members of Pro-Fac. The volume and type of
crops to be purchased by Agrilink under the Agreement are determined pursuant to
its annual profit plan, which requires the approval of a majority of the
Disinterested Directors. In addition, in any year in which the Company has
earnings on products which were processed from crops supplied by Pro-Fac
("Pro-Fac Products"), the Company pays to Pro-Fac up to 90 percent of such
earnings, but in no case more than 50 percent of all pretax earnings (before
dividing with Pro-Fac) of the Company. In years in which the Company has losses
on Pro-Fac Products, the Company reduces the CMV it would otherwise pay to
Pro-Fac by up to 90 percent of such losses, but in no case by more than 50
percent of all pretax losses (before dividing with Pro-Fac) of the Company.
Additional patronage income is paid to Pro-Fac for services provided to
Agrilink, including the provision of a long term, stable crop supply, favorable
payment terms for crops and the sharing of risks of losses of certain operations
of the business. Earnings and losses are determined at the end of the fiscal
year, but are accrued on an estimated basis during the year. Under the Indenture
related to the Company's Senior Subordinated Notes, Pro-Fac is required to
reinvest at least 70 percent of the additional Patronage income in Agrilink.
NOTE 3. OTHER MATTERS
Name Change: On September 18, 1997, the Cooperative's wholly-owned subsidiary,
Curtice Burns Foods, Inc. changed its name to Agrilink Foods, Inc. The three
recently consolidated business units of Agrilink, Comstock Michigan Fruit,
Southern Frozen Foods, and Brooks Foods, are now called Curtice Burns Foods.
Formation of New Sauerkraut Company: Effective July 1, 1997, the Company and
Flanagan Brothers, Inc. of Bear Creek, Wisconsin, contributed all their assets
involved in sauerkraut production to form a new sauerkraut company. This new
company, Great Lakes Kraut Company, operates as a New York limited liability
company, with ownership split between the two companies. Management believes the
alliance will positively impact earnings.
Dividends: Subsequent to quarter end, the Cooperative declared a cash dividend
of $.43 per share on the Class A Cumulative Preferred Stock. These dividends
approximate $1.4 million and will be paid on October 31, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The purpose of this review is to highlight the more significant changes in the
major items in Consolidated Statement of Operations and Net Proceeds in the
first quarter of fiscal 1998 versus the first quarter of 1997.
PRO-FAC'S RESULTS OF OPERATIONS
Pro-Fac Cooperative, Inc.'s ("Pro-Fac" or the "Cooperative") wholly-owned
subsidiary, Agrilink has three primary business units: Curtice Burns Foods
("CBF"), Nalley Fine Foods, and its Snack Foods group. Each business unit offers
different products and is managed separately. The majority of each of the
business units' net sales are within the United States. In addition, all of the
Company's operating facilities are within the United States.
The CBF business unit produces products in several food categories, including
fruit fillings and toppings; aseptically-produced products; canned and frozen
fruits and vegetables, and popcorn. The Nalley business unit produces canned
meat products such as chilies and stews, pickles, salad dressings, peanut
butter, and syrup. The Company's snack foods business unit consists of the
Snyder of Berlin, Husman Snack Foods, and Tim's Cascade Potato Chip businesses.
This business unit produces and markets potato chips and other snack items.
The following tables illustrate the results of operations by business unit for
the quarters ended September 27, 1997 and September 28, 1996, and the total
assets by business unit as of September 27, 1997 and September 28, 1996.
<TABLE>
Net Sales
<CAPTION>
(Dollars in Millions)
Quarter Ended
September 27, September 28,
1997 1996
% of % of
$ Total $ Total
------ ------- ------ ------
<S> <C> <C> <C> <C>
CBF $112.2 63.6% $ 99.2 57.0%
Nalley Fine Foods 46.9 26.6 44.2 25.4
Snack Foods Group 17.3 9.8 17.2 9.9
------ ----- ------ -----
Subtotal ongoing operations 176.4 100.0 160.6 92.3
Businesses sold1 0.0 0.0 13.4 7.7
------ ------ ----- ------
Total $176.4 100.0% $174.0 100.0%
====== ===== ====== =====
<FN>
1 Includes the activity of Finger Lakes Packaging and the portion of the canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>
<TABLE>
Operating Income
<CAPTION>
(Dollars in Millions)
Quarter Ended
September 27, September 28,
1997 19961
% of % of
$ Total $ Total
------ -------- ----- ------
<S> <C> <C> <C> <C>
CBF $ 9.0 69.8% $ 6.4 72.7%
Nalley Fine Foods 3.7 28.7 2.1 23.9
Snack Foods Group 2.1 16.2 1.5 17.0
Corporate (1.9) (14.7) (1.7) (19.3)
----- ----- ----- -----
Subtotal ongoing operations 12.9 100.0 8.3 94.3
Businesses sold2 0.0 0.0 0.5 5.7
----- ----- ----- -----
Total $12.9 100.0% $ 8.8 100.0%
===== ===== ===== =====
<FN>
1 Excludes cumulative effect of an accounting change for the quarter ended September 28, 1996. See NOTE 1 - "Summary of
Accounting Policies - Change in Accounting Principle."
2 Includes the activity of Finger Lakes Packaging and the portion of the canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>
<PAGE>
<TABLE>
EBITDA1
<CAPTION>
(Dollars in Millions)
Quarter Ended
September 27, September 28,
1997 19962
% of % of
$ Total $ Total
----- ----- ------ ------
<S> <C> <C> <C> <C>
CBF $12.7 68.6% $10.6 66.3%
Nalley Fine Foods 5.1 27.6 3.6 22.5
Snack Foods Group 2.6 14.1 2.0 12.5
Corporate (1.9) (10.3) (1.7) (10.6)
----- ----- ------- -----
Subtotal ongoing operations 18.5 100.0 14.5 90.7
Businesses sold3 0.0 0.0 1.5 9.3
----- ----- ------- -----
Total $18.5 100.0% $16.0 100.0%
===== ===== ===== =====
<FN>
1 Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
does not represent information prepared in accordance with generally
accepted accounting principles, nor is such information considered superior
to information presented in accordance with generally accepted accounting
principles. The EBITDA calculation begins with Income/(loss) before taxes,
dividends, allocation of net proceeds, and cumulative effect of an
accounting change and adds to such amount interest expense, depreciation,
and amortization of goodwill and other intangibles.
2 The above information excludes the cumulative effect of an accounting change
for the quarter ended September 28, 1996. See NOTE 1 - "Summary of
Accounting Policies - Change in Accounting Principle."
3 Includes the activity of the canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>
<TABLE>
Total Assets
<CAPTION>
(Dollars in Millions)
Quarter Ended
September 27, September 28,
1997 1996
% of % of
$ Total $ Total
------ ------- ------- ------
<S> <C> <C> <C> <C>
CBF $377.3 61.9% $389.4 55.1%
Nalley Fine Foods 155.8 25.6 154.7 21.9
Snack Foods Group 26.5 4.4 27.6 3.9
Corporate 49.6 8.1 61.8 8.8
------ ----- ------ -----
Subtotal ongoing operations 609.2 100.0 633.5 89.7
Businesses sold1 0.0 0.0 72.8 10.3
------ ----- ------ -----
Total $609.2 100.0% $706.3 100.0%
====== ===== ====== =====
<FN>
1 Includes the assets of Finger Lakes Packaging and the portion of the canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>
CHANGES FROM FIRST QUARTER FISCAL 1998 TO FIRST QUARTER FISCAL 1997
Net Sales: Net sales from ongoing operations increased in the first quarter
compared to the prior year by $15.8 million or 10 percent. This significant
increase reflects improvements at all three of the Company's business units.
The most significant increases were noted in the vegetable and aseptic
categories. Net sales for the CBF aseptic category increased $9.2 million, while
the continuing vegetable business increased $4.6 million. The increase in
aseptic sales results from new business, while the increase in the vegetable
business is attributable to changes in product mix resulting in improvements in
volume/pricing.
The pickle and dressing categories at Nalley also increased $ 2.1 million and
$1.3 million, respectively due to increased volume.
Small gains were noted in the Snack Foods Group.
<PAGE>
Gross Profit: Gross profit of $45.6 million in the quarter ended September 27,
1997 increased $4.0 million or 9.5 percent from the quarter ended September 28,
1996. Excluding the businesses sold in fiscal 1997, the increase in gross profit
is approximately $6.3 million. This increase results from increased sales as
highlighted above.
Selling, Administrative, and General Expenses: Selling, administrative, and
general expenses have decreased $0.2 million as compared with the prior year.
During the first quarter of fiscal 1998, the Company settled an outstanding tax
claim with the state of Washington ($1.4 million). This settlement was, however,
offset by increased costs due to competitive promotional spending/selling
expenses (approximately $0.3 million) and the cost for employee incentive plans
($0.9 million).
Interest Expense: Interest expense for the quarter ended September 27, 1997
decreased $2.1 million or 21 percent. This significant improvement is primarily
the result of the focus on debt reduction which occurred throughout fiscal 1997.
These activities included the sale of Finger Lakes Packaging, the sale of the
canned vegetable business, and the sale of the Georgia distribution center.
Reductions in outstanding debt accounted for a decrease of $2.0 million, while
changes in rates accounted for a decrease of $0.1 million.
Provision for Taxes: The provision for taxes in the quarter ended September 27,
1997 of $1.8 million increased from $0.5 million in the quarter ended September
28, 1996 due to improvements in earnings. The Company's effective tax rate is
negatively impacted by the non-deductibility of goodwill.
Cumulative Effect of a Change in Accounting: Effective June 30, 1996, accounting
procedures were changed to include in prepaid expenses and other current assets,
manufacturing spare parts previously charged directly to expense. The favorable
cumulative effect of the change (net of income taxes of $1.2 million) was $4.5
million. Pro forma amounts for the cumulative effect of the accounting change on
prior periods are not determinable due to the lack of physical inventory counts
required to establish quantities at the respective dates.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion highlights the major variances in the "Consolidated
Statement of Changes in Cash Flows" for the first quarter of fiscal 1998
compared to the first quarter of fiscal 1997.
Net cash used in operating activities increased approximately $7.2 million.
Additional funds were used during the quarter to liquidate payments for crops.
Crops in the current year have been available earlier for harvest than in the
prior year. In addition, the reduction in inventories, attributed to the sale of
the canned vegetable business in the fourth quarter of fiscal 1997, was offset
by the increase in net income and the timing of the liquidation of outstanding
receivables/payables.
Net cash used in investing activities decreased in the first quarter of fiscal
1998 due to the timing of various capital expenditures. The purchase of
property, plant, and equipment in both years was for general operating purposes.
Net cash provided by financing activities increased from the prior year due to
the receipt of proceeds from Great Lakes Kraut and additional borrowing incurred
in the first quarter of fiscal 1998 for operating needs.
Borrowings: Under the Company's Credit Agreement, as amended, Agrilink is able
to borrow up to $66.0 million for seasonal working capital purposes under the
Seasonal Facility, subject to a borrowing base limitation, and obtain up to
$18.0 million in aggregate face amount of letters of credit pursuant to a Letter
of Credit Facility. The borrowing base is defined as the lesser of (i) the total
available line or (ii) the sum of 60 percent of eligible accounts receivable
plus 50 percent of eligible inventory.
As of September 27, 1997, (i) cash borrowings outstanding under the Seasonal
Facility were $64.0 million and (ii) additional availability under the Seasonal
Facility, after taking into account the amount of the borrowing was $2.0
million. In addition to its seasonal financing, as of September 27, 1997, the
Company had $26.6 million available for long-term borrowings under the Term Loan
Facility. The Cooperative believes that the cash flow generated by its
operations and the amounts available under the Seasonal and Term Loan Facilities
should be sufficient to fund its working capital needs, fund its capital
expenditures, service its debt, and pay dividends for the foreseeable future.
Certain financing arrangements require that Pro-Fac and Agrilink meet certain
financial tests and ratios and comply with certain other restrictions and
limitations. As of September 27, 1997, Pro-Fac is in compliance with all such
covenants, restrictions and limitations.
Short- and Long-Term Trends: The vegetable portion of the business can be
positively or negatively affected by weather conditions nationally and the
resulting impact on crop yields. Favorable weather conditions can produce high
crop yields and an oversupply
<PAGE>
situation. This results in depressed selling prices and reduced profitability on
the inventory produced from that year's crops. Excessive rain or drought
conditions can produce low crop yields and a shortage situation. This typically
results in higher selling prices and increased profitability. While the national
supply situation controls the pricing, the supply can differ regionally because
of variations in weather.
The effect of the 1997 growing season on fiscal 1998 financial results cannot be
estimated until late 1997 or early calendar 1998 when harvesting is complete and
national supplies can be determined.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
Exhibit 3.3 Certificate of Incorporation of Pro-Fac
Exhibit 27 Financial Data Schedule
(b) No current report on Form 8-K was filed during the fiscal period to
which this report relates.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRO-FAC COOPERATIVE, INC.
Date: November 6, 1997 BY:/s/ Stephen R. Wright
---------------- ------------------------------
STEPHEN R. WRIGHT,
GENERAL MANAGER
Date: November 6, 1997 BY:/s/ Earl L. Powers
---------------- ------------------------------
EARL L. POWERS,
VICE PRESIDENT FINANCE AND
ASSISTANT TREASURER
(Principle Financial Officer and
Principle Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary finanical information extracted from Pro-Fac
Cooperative, Inc. Form 10-Q for the quarter ended September 27, 1997 and is
qualified in its entirety by reference to such financial statement.
</LEGEND>
<CIK> 0000202932
<NAME> Pro-Fac Cooperative, Inc.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Jun-29-1998
<PERIOD-START> Jun-29-1997
<PERIOD-END> Sep-27-1997
<CASH> 3,997
<SECURITIES> 0
<RECEIVABLES> 68,898
<ALLOWANCES> 0
<INVENTORY> 168,452
<CURRENT-ASSETS> 262,754
<PP&E> 264,149
<DEPRECIATION> 54,993
<TOTAL-ASSETS> 609,162
<CURRENT-LIABILITIES> 181,521
<BONDS> 160,000
314
81,738
<COMMON> 8,748
<OTHER-SE> 42,943
<TOTAL-LIABILITY-AND-EQUITY> 609,162
<SALES> 176,397
<TOTAL-REVENUES> 176,397
<CGS> 130,748
<TOTAL-COSTS> 130,748
<OTHER-EXPENSES> 32,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,770
<INCOME-PRETAX> 5,121
<INCOME-TAX> 1,822
<INCOME-CONTINUING> 3,299
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,299
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
RESTATED CERTIFICATE OF INCORPORATION
OF
PRO-FAC COOPERATIVE, INC.
Pursuant to Section 807 of the
Business Corporation Law and Section 5 of the
Cooperative Corporations Law
We, the undersigned, the President and the Secretary of Pro-Fac Cooperative,
Inc. (the "Corporation"), do hereby certify as follows:
1. The name of the corporation is Pro-Fac Cooperative, Inc.
2. The certificate of incorporation of Pro-Fac Cooperative, Inc. was
filed in the office of the Secretary of State on October 17, 1960. 3.
The certificate of incorporation is hereby amended to: (a) Change
Paragraph 4 to delete the reference to "City of Rochester"; and (b)
Change Paragraph 8 to provide that the address to which the Secretary
of State shall mail a copy of process in any action against the
corporation that may be served upon him is P.O. Box 682, Rochester,
New York 14603. 4. The text of the certificate of incorporation, as so
amended, is hereby restated to read as herein set forth in full: 1.
The name of the corporation is Pro-Fac Cooperative, Inc.
2. The purposes for which the corporation is to be formed are:
(a) To engage in activities connected with the marketing, processing,
manufacture and sale of agricultural products, including, without
limitation, the purchase, financing, production, manufacture, warehousing,
cultivating, harvesting, preservation, drying, processing, cleansing,
canning, blending, packing, grading storing, handling, utilization,
shipping, marketing, merchandising, and selling of agricultural and food
products of its members and the by-products thereof.
(b) To engage as a cooperative purchasing association in activities
relating to the purchase of supplies for producers of agricultural
products.
<PAGE>
20
(c) To perform services connected with the acquisition for its members of
supplies and articles of common use, including livestock, equipment,
machinery, food products and family and other household and personal
supplies to be used or consumed by members, their families and guests.
(d) To do all and everything incidental and necessary for the
accomplishment of any of the purposes or the attainment of any of the
objects or the furtherance of any of the powers hereinabove set forth or
permitted under Paragraphs 13 and 14 of Article 2 as limited by said
Article 6 of the Cooperative Corporation Law of the State of New York,
individually or as agent either alone or in association with other
corporations, firms or individuals.
3. Its duration shall be perpetual.
4. Its principal business office is to be located in the County of
Monroe, State of New York.
<PAGE>
5. The number of its directors shall be such number not less than 5 nor
more than 18 as the Bylaws shall from time to time provide.
6. The aggregate number of shares of stock which the Corporation shall
have the authority to issue is 60,000,000, of which 5,000,000 shares of the par
value of $5 per share shall be designated as Common Voting Stock, 5,000,000
shares of the par value of $25 per share shall be designated as Non-Cumulative
Preferred Stock, 10,000,000 shares of the par value of $1 per share shall be
designated as Class A Preferred Stock, 10,000,000 shares of the par value of $1
per share shall be designated as Class B Preferred Stock, 10,000,000 shares of
the par value of $1 per share shall be designated as Class C Preferred Stock,
10,000,000 shares of the par value of $1 per share shall be designated as Class
D Preferred Stock, 10,000,000 shares of the par value of $1 per share shall be
designated as Class E Preferred Stock.
The designation, rights, preferences, privileges, voting powers and
limitations of said classes of stock are as follows:
(a) The shares of the Non-Cumulative Preferred Stock may be issued in one
or more annual series, which the Board of Directors shall have the
authority to establish, the shares of each such series to be designated by
the year of issuance so as to distinguish them from shares of all other
series.
The holders of the Non-Cumulative Preferred Shares shall be entitled to
receive as and when declared by the Board of Directors out of funds
legally available therefor dividends at such rate as may, from time to
time, be determined by the Board of Directors, but not less than 6 percent
per annum of the par value of such shares. Such dividends, if any, shall
be non-cumulative and shall be payable at such times as shall be
determined by the Board of Directors. After full non-cumulative dividends
at the rate determined by the Board of Directors for the then current year
shall have been declared and paid or set apart for payment to the holders
of Preferred shares, dividends may be declared and paid or set apart for
payment to the holders of Common shares.
Subject to the foregoing provisions, the Non-Cumulative Preferred Stock
shall not be entitled to participate in any other or additional surplus or
net profits of the corporation. The corporation shall be entitled from
time to time to retire the whole or any portion or series of its
Non-Cumulative Preferred Stock upon payment of the par value of such stock
plus all accrued dividends unpaid at the date of such retirement. Such
retirement shall be effected by payment out of funds legally available for
such purpose, but no such stock shall be redeemed for cash under
circumstances which would produce any impairment of the capital or capital
stock of the corporation. Such retirement shall be on such other terms and
conditions as may be determined by the Board of Directors, provided that
no shares of the Non-Cumulative Preferred Stock shall be retired except
upon 90 days' written notice of such retirement given to the holders
thereof.
Upon dissolution or other termination of the Corporation or its business,
or the distribution of its assets, prior to any payment to the holders of
the Common Voting Stock, the holders of the Non-Cumulative Preferred Stock
shall first receive the full par value of such stock, together with the
amount of such dividends as have been declared but are unpaid as of such
distribution of payment.
(b) Each of the Class A Preferred Stock, the Class B Preferred Stock, the
Class C Preferred Stock, the Class D Preferred Stock and the Class E
Preferred Stock may be issued from time to time by the Board of Directors
as shares of one or more series of Class A Preferred Stock, Class B
Preferred Stock, the Class C Preferred Stock, Class D Preferred Stock or
Class E Preferred Stock, as the case may be, and the Board of Directors is
expressly authorized, prior to issuance, in the resolution or resolutions
providing for the issue of shares of each particular series of any such
class of preferred stock, to fix the following:
<PAGE>
(i) The distinctive serial designation of such series which shall
distinguish it from other series;
(ii) The number of shares included in such series, which number may
be increased or decreased from time to time unless otherwise provided
by the Board of Directors in creating the series;
(iii) The annual dividend rate (or method of determining such rate)
for shares of such series, the date or dates upon which, and the form
or method of payment in which, such dividends shall be payable and,
subject to paragraph (c) below, the relative priority of the right to
such dividends;
(iv) Whether dividends on the shares of such series shall be
cumulative or non-cumulative, and, in the case of shares of any
series having cumulative dividend rights, the date or dates or method
of determining the date or dates from which dividends on the shares
of such series shall be cumulative;
(v) The amount or amounts which shall be paid out of the assets of
the Corporation to the holders of the shares of such series upon
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation and, subject to paragraph (c) below, the relative
priority of the right to such distribution;
(vi) The price or prices at which, the period or periods within which
and the terms and conditions upon which the shares of such series may
be redeemed, in whole or in part, at the option of the Corporation;
(vii) The obligation, if any, of the Corporation to purchase or
redeem shares of such series pursuant to a sinking fund or otherwise
and the price or prices at which, the period or periods within which
and the terms and conditions upon which the shares of such series
shall be redeemed, in whole or in part, pursuant to such obligations;
(viii)The period or periods within which and the terms and
conditions, if any, including the price or prices or the rate or
rates of conversion and the terms and conditions of any adjustments
thereof, upon with the shares of such series shall be convertible at
the option of the holder into shares of any class of stock or into
shares of any other series of such class of preferred stock, except
into share of a class having rights or preferences as dividends or
distribution of assets upon liquidation which are prior or superior
in rank to those of the shares being converted;
(ix) The voting rights, if any, of the shares of such series in
addition to those required by law; and
(x) Any other relative designations, rights, preferences, privileges,
voting powers or limitations of the shares of the series not
inconsistent herewith or with applicable law.
(c) All shares of Class A Preferred Stock, Class B Preferred Stock, Class
C Preferred Stock, Class D Preferred Stock and Class E Preferred Stock (i)
shall rank senior in priority to the Common Voting Stock and, as
determined by the Board of Directors, on a parity with or junior in
priority to the Non-Cumulative Preferred Stock in respect of the right to
receive dividends and the right to receive payments out of the assets of
the Corporation upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, (ii) shall, with respect to other shares of
its class, be of equal rank with respect to all other shares of such
class, regardless of series, and (iii) shall be identical in all respects
except as provided in paragraph (b) above. The shares of any one series of
the Class A Preferred Stock, the Class B Preferred Stock, the Class C
Preferred Stock, the Class D Preferred Stock or the Class E Preferred
Stock shall be identical with each other in all respects except as to the
dates from and after which dividends thereon shall be cumulative. In case
the stated dividends or the amounts payable on liquidation are not paid in
full, the shares of any series of the Class A Preferred Stock, the Class B
Preferred Stock, the Class C Preferred Stock, the Class D Preferred Stock
or the Class E Preferred Stock shall share ratably with the shares of all
other series of Class
<PAGE>
A Preferred Stock, Class B Preferred Stock, Class C Preferred Stock, Class
D Preferred Stock or Class E Preferred Stock, as the case may be, in the
payment of dividends, including accumulations, if any, in accordance with
the sums which would be payable on said shares if all dividends were
declared and paid in full, and in any distribution of assets other than by
way of dividends in accordance with the sums which would be payable on
such distribution if all sums payable were discharged in full. Shares of
Class A Preferred Stock, Class B Preferred Stock, Class C Preferred Stock,
Class D Preferred Stock and Class E Preferred Stock redeemed, purchased or
otherwise acquired by the Corporation (including shares surrendered for
conversion) shall, as determined by the Board of Directors and subject to
applicable law, be canceled and thereupon restored to the status of
authorized but unissued Class A Preferred Stock, Class B Preferred Stock,
Class C Preferred Stock, Class D Preferred Stock or Class E Preferred
Stock, as the case may be, undesignated as to series, or retained as
treasury shares.
(d) Except as otherwise provided by the Board of Directors in accordance
with paragraph (b) above in respect of any series of the Class A Preferred
Stock, the Class B Preferred Stock, the Class C Preferred Stock, the Class
D Preferred Stock or the Class E Preferred Stock or as otherwise expressly
required by law, all voting rights of the Corporation shall be vested
exclusively in the holders of the Common Voting Stock. Each holder of
Common Voting Stock shall have one vote regardless of the number of such
shares held by such shareholder. When two or more holders of Common Voting
Stock join in an agricultural venture which markets crops through the
Corporation, the Board of Directors shall in its discretion determine
whether such venture is a single agricultural enterprise for which the
holders of the Common Voting Stock who participate in the enterprise shall
have one vote among them or whether the venture is a multiple enterprise
entitling the holders of Common Voting Stock who participate in the
enterprise to more than one vote.
Any holder of Common Voting Stock who ceases to be a producer of
agricultural products which he sells to the Corporation shall be obligated
to dispose of his Common Voting Stock as provided in the Bylaws of the
Corporation.
Upon dissolution or other termination of the Corporation or its business,
or the distribution of its assets, after payment to the holders of
Non-Cumulative Preferred Stock, Class A Preferred Stock, Class B Preferred
Stock, Class C Preferred Stock, Class D Preferred Stock and Class E
Preferred Stock as herein provided, out of funds so remaining there shall
first be paid to the holders of the Common Voting Stock the par value
thereof, together with the amount of such dividends as may have been
declared but are unpaid as of such distribution and payment. Should there
be insufficient funds to make such payment, then the holders of such
Common Voting Stock shall share such funds as are available in such
proportion as the par value of and accrued dividends on their stock shall
bear to the total par value of and accrued dividends on all outstanding
Common Voting Stock. After payment to the holders of all classes of stock
as herein provided, the funds remaining shall be distributed as provided
by law and in the Bylaws of the Corporation.
********************
DESIGNATION, PREFERENCES AND RIGHTS OF CLASS A CUMULATIVE PREFERRED STOCK
1. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings
(with terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
<PAGE>
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, Sunday, national
holiday or other day on which commercial banks in New York City are authorized
or required to close under the laws of the State of New York.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Common Stock" means the Common Voting Stock, par value $5.00 per
share, of the Corporation and any other class of common stock hereafter
authorized by the Corporation from time to time.
"Corporation" means Pro-Fac Cooperative, Inc.
"Cumulative Preferred Stock" means the Class A Cumulative Preferred
Stock, par value $1.00 per share, of the Corporation.
"Dividend Payment Date" means the April 30, July 31, October 31 and
January 31 of each year.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each Quarterly Dividend Period.
"Dividend Record Date" means, with respect to the dividend payable on
each Dividend Payment Date, the immediately preceding April 15, July 15, October
15 or January 15 or such other record date as may be designated by the Board of
Directors with respect to the dividend payable on such Dividend Payment Date;
provided, however, that such record date may not be more than fifty (50) days
prior to such Dividend Payment Date.
"Holder" means a registered holder of shares of Cumulative Preferred
Stock.
"Initial Dividend Period" means, with respect to each share of
Cumulative Preferred Stock, the dividend period commencing on the Issue Date of
such share of Cumulative Preferred Stock and ending on and including the
immediately succeeding Dividend Payment Date.
"Issue Date" means, with respect to each share of Cumulative Preferred
Stock, the date upon which such share was originally issued by the Corporation.
"Junior Dividend Securities" has the meaning specified in Section 3(a)
hereof and includes the Common Stock.
"Junior Liquidation Securities" has the meaning specified in Section
3(a) hereof and includes the Common Stock.
"Liquidation Preference" means, with respect to each share of
Cumulative Preferred Stock, the Original Liquidation Preference, plus an amount
in cash equal to all accrued and unpaid dividends (including an amount equal to
a prorated dividend from the last Dividend Payment Date to the date such
Liquidation Preference is being determined). The Liquidation Preference of a
share of Cumulative Preferred Stock will increase on a daily basis as dividends
accrue on such share and will decrease only to the extent such dividends are
actually paid.
"Non-Cumulative Amount" has the meaning specified in Section 4(a) hereof.
<PAGE>
"Non-Cumulative Preferred Stock" means the Non-Cumulative Preferred
Stock, par value $25.00 per share, of the Corporation.
"Original Liquidation Preference" means $25.00 per share of Cumulative
Preferred Stock.
"Other Class A Series" means any series of Class A Preferred Stock, par
value $1.00 per share, of the Corporation other than the Cumulative Preferred
Stock.
"Parity Dividend Securities" has the meaning specified in Section 3(b)
hereof and includes the Non-Cumulative Preferred Stock and any Other Class A
Series.
"Parity Liquidation Securities" has the meaning specified in Section
3(b) hereof and includes the Non-Cumulative Preferred Stock and any Other Class
A Series.
"Quarterly Dividend Period" means the quarterly period commencing on
and including the day after each Dividend Payment Date and ending on and
including the immediately subsequent Dividend Payment Date.
"Redemption" has the meaning specified in Section 6(a) hereof.
"Redemption Date" has the meaning specified in Section 6(b) hereof.
"Redemption Notice" has the meaning specified in Section 6(b) hereof.
"Redemption Price" means a price per share equal to the Liquidation
Preference as of the applicable Redemption Date.
"Replaced Securities" has the meaning specified in Section 7 hereof.
"Replacing Securities" has the meaning specified in Section 7 hereof.
"Senior Dividend Securities" has the meaning specified in Section 3(c)
hereof.
"Senior Liquidation Securities" has the meaning specified in Section
3(c) hereof.
2. DESIGNATION
The series of preferred stock authorized hereunder shall be designated
as the "Class A Cumulative Preferred Stock." The number of shares constituting
such series shall initially be 10,000,000, which number may from time to time be
changed (but not above 10,000,000 or below the number then outstanding) by the
Board of Directors. The par value of the Cumulative Preferred Stock shall be
$1.00 per share. All shares of Cumulative Preferred Stock shall be identical
with each other in all respects except as to the dates from and after which
dividends thereon shall be cumulative.
<PAGE>
3. RANK
The Cumulative Preferred Stock shall rank, with respect to priority of
dividend rights or rights on liquidation, dissolution and winding-up of the
affairs of the Corporation or both:
(a)senior to all classes or series of Common Stock of the Corporation
and to any other class or series of Capital Stock (except the
Non-Cumulative Preferred Stock and any Other Class A Series)
that does not expressly provide that it ranks senior to or on
a parity with the Cumulative Preferred Stock as to dividends
or upon liquidation, dissolution and winding-up, as the case
may be (with respect to such junior dividend rights or junior
rights upon liquidation, dissolution and winding up,
collectively referred to, as the context may require, as
"Junior Dividend Securities" or "Junior Liquidation
Securities");
(b)on a parity with the Non-Cumulative Preferred Stock and any Other
Class A Series and each class or series of Capital Stock that
expressly provides that it ranks on a parity with the
Cumulative Preferred Stock as to dividends or upon
liquidation, dissolution and winding-up, as the case may be
(with respect to such parity dividend rights or parity rights
upon liquidation, dissolution and winding-up, collectively
referred to, as the context may require, as "Parity Dividend
Securities" or "Parity Liquidation Securities"); and
(c)junior to each class or series of Capital Stock (except any Other
Class A Series) which expressly provides that it ranks senior
to the Cumulative Preferred Stock as to dividends or upon
liquidation, dissolution and winding-up, as the case may be
(with respect to such senior dividend rights or senior rights
upon liquidation, dissolution and winding-up, collectively
referred to, as the context may require, as "Senior Dividend
Securities" or "Senior Liquidation Securities").
4. DIVIDENDS, ETC.
(a)Beginningon the applicable Issue Date, the Holders of outstanding
shares of Cumulative Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors,
but only out of funds legally available for the payment of
dividends, dividends payable in cash at the rate per share of
$0.43 per quarter and no more; provided that the dividend
payable on October 31, 1995 on any shares of Cumulative
Preferred Stock to holders of record thereof on October 15,
1995 shall equal $0.43 per share. All dividends shall be fully
cumulative and shall accrue (whether or not earned or
declared, whether or not permitted under any agreement of the
Corporation and whether or not there are funds legally
available therefor), without interest, from the first day of
the Quarterly Dividend Period with respect to which such
dividend may be payable as herein provided, except that with
respect to the first dividend payable with respect to any
share of Cumulative Preferred Stock, such dividend shall
accrue from the applicable Issue Date; provided that with
respect to the dividend payable on October 31, 1995 with
respect to any share of Cumulative Preferred Stock, such
dividend shall equal $0.43. All dividends shall be cumulative
and shall be payable in arrears on each Dividend Payment Date
commencing on the Dividend Payment Date immediately succeeding
the applicable Issue Date, in preference to and with priority
over dividends on Junior Dividend Securities. No full dividend
and no distribution shall be declared by the Board of
Directors or paid or set apart for payment by the Corporation
on the Cumulative Preferred Stock for any period unless
dividends aggregating at least the Non-Cumulative Amount have
been or contemporaneously are declared on the Non-Cumulative
Preferred Stock (including any dividends previously declared
for the same stated dividend payment date pursuant to this
sentence), payable not later than the stated dividend payment
date for the Non-Cumulative Preferred Stock on or next
following the date of payment of such dividend or distribution
on the Cumulative Preferred Stock, and a sum has been or
contemporaneously is set apart sufficient for such payment.
The "Non-Cumulative Amount"
<PAGE>
means the pro rata portion of the anticipated annual dividends (in
any case, not less than six percent per annum) on the
Non-Cumulative Preferred Stock calculated for the period from,
but not including, its immediately preceding stated dividend
payment date (whether or not any dividend was paid on such
date) through, and including, the date of payment of such
dividend or distribution on the Cumulative Preferred Stock.
(b)All dividends and distributions paid with respect to shares of the
Cumulative Preferred Stock pursuant to Section 4(a) hereof
shall be paid pro rata to the Holders entitled thereto. No
full dividend and no distribution shall be declared by the
Board of Directors or paid or set apart for payment by the
Corporation on Parity Dividend Securities for any period
unless full cumulative dividends have been or
contemporaneously are declared and a sum set apart sufficient
for such payment on the Cumulative Preferred Stock for all
Dividend Periods terminating on or prior to the date of
payment of such full dividends on the Parity Dividend
Securities. If any dividends are not paid in full upon the
shares of the Cumulative Preferred Stock and the Parity
Dividend Securities, (i) all dividends declared for any period
upon shares of the Cumulative Preferred Stock and the Parity
Dividend Securities shall be declared pro rata so that the
amount of dividends declared on the Cumulative Preferred Stock
and on each class or series of the Parity Dividend Securities
shall in all cases bear to each other the same ratio that
accrued dividends (or, in the case of the Non-Cumulative
Preferred Stock, that portion of the Non-Cumulative Amount
which has not previously been declared and set apart) on the
Cumulative Preferred Stock and on each class or series of
Parity Dividend Securities bear to each other, and (ii) a sum
shall be set apart sufficient to pay any such declared
dividends which are not being paid immediately. Any dividend
not paid on the Cumulative Preferred Stock pursuant to this
Section 4 shall be fully cumulative and shall accrue, without
interest, as set forth in Section 4(a) hereof and shall be in
arrears until paid.
(c)The Corporation shall not declare, pay or set apart for payment
any dividend on any of the Junior Dividend Securities or make
any distribution in respect thereof either directly or
indirectly and whether in cash, obligations or shares of the
Corporation or other property (other than dividends or
distributions in Junior Dividend Securities which are no
higher in priority with respect to the Cumulative Preferred
Stock, as to rights on liquidation, dissolution and
winding-up, than the Junior Dividend Securities upon which
such dividend or distribution is issued), unless on or prior
to the date of declaration of such dividend or distribution on
the Junior Dividend Securities full cumulative dividends have
been or contemporaneously are declared in compliance with
Section 4(a) hereof, and a sum set apart sufficient for such
payment, on the Cumulative Preferred Stock for all Dividend
Periods terminating on or prior to the date of payment of such
dividend or distribution on the Junior Dividend Securities.
(d)Except as otherwise provided in Section 4(a) hereof with respect to
the dividend payable on October 31, 1995, the amount of
dividends payable on the Cumulative Preferred Stock for any
period less than a full Quarterly Dividend Period (including
the Initial Dividend Period) and the Non-Cumulative Amount
shall be computed on the basis of twelve 30-day months and a
360-day year. Dividends shall accrue on a daily basis during
each Dividend Period as provided above, and the Liquidation
Preference of each outstanding share of Cumulative Preferred
Stock shall be correspondingly increased on a daily basis.
Each such dividend shall be payable to Holders of record as
their names shall appear on the stock books of the Corporation
on the Dividend Record Date for such dividends, except that
dividends in arrears for any past Dividend Payment Date may be
declared and paid at any time without reference to such
regular Dividend Payment Date to Holders of record on such
date not more than fifty (50) days prior to the date of
payment as shall be determined by the Board of Directors.
<PAGE>
(e)Dividendsshall cease to accrue in respect of any particular share of
Cumulative Preferred Stock on the Redemption Date with respect
thereto unless the Corporation defaults in payment of the
Redemption Price with respect to such share of Cumulative
Preferred Stock.
5. PAYMENT ON LIQUIDATION
Upon any liquidation, dissolution or winding-up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of Cumulative
Preferred Stock will be entitled to receive out of the assets of the Corporation
available for distribution to the holders of its Capital Stock an amount in cash
per share equal to the Liquidation Preference determined as of the date of such
liquidation, dissolution or winding-up, before any payment or other distribution
is made on any Junior Liquidation Securities. Holders of Cumulative Preferred
Stock shall not be entitled to any other distribution in the event of
liquidation, dissolution or winding-up of the affairs of the Corporation. If
upon any liquidation, dissolution or winding-up of the affairs of the
Corporation, the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of the
Cumulative Preferred Stock and all Parity Liquidation Securities, then the
holders of all such shares shall share equally and ratably in any distribution
of assets in proportion to the full liquidation payments determined as of the
date of such liquidation, dissolution or winding-up, to which each of them is
entitled. For the purposes of this Section 5, neither a consolidation or merger
of the Corporation with or into one or more corporations nor a sale, lease,
exchange or transfer of all or substantially all of the Corporation's assets
shall be deemed to be a liquidation, dissolution or winding-up of the
Corporation.
6. REDEMPTION
(a)Redemption. The Corporation may redeem at the option of the Corporation
in its sole discretion, at any time or from time to time, in
whole or in part, shares of Cumulative Preferred Stock (a
"Redemption"), at the Redemption Price. With respect to any
Redemption of fewer than all the outstanding shares of
Cumulative Preferred Stock, the number of shares to be
redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata or by lot,
except that the Corporation may first redeem all shares held
by any Holder of a number of shares not to exceed 100, as may
be specified by the Corporation. The Board of Directors shall
have full power and authority, subject to the provisions
herein contained, to prescribe the terms and conditions upon
which shares of the Cumulative Preferred Stock shall be
redeemed from time to time.
(b)Notice of Redemption. Notice of any Redemption of shares of
Cumulative Preferred Stock shall be given by publication at
least once in a newspaper printed in the English language and
customarily published on each Business Day and of general
circulation in the County of Monroe, State of New York and in
such other local, regional or national publications, if any,
as the Board of Directors may determine. Such publication
shall be not more than sixty (60) days nor less than thirty
(30) days prior to the date fixed for Redemption (the
"Redemption Date"). Notice of any Redemption of shares of
Cumulative Preferred Stock, specifying the time and place of
Redemption and the Redemption Price (a "Redemption Notice"),
shall also be mailed, not more than sixty (60) nor less than
thirty (30) days prior to the Redemption Date, in a postage
prepaid envelope to each Holder of Cumulative Preferred Stock
to be redeemed, at the address for such Holder shown on the
Corporation's records. No failure to give such Redemption
Notice nor any defect therein shall affect the validity of the
procedure for the Redemption of any shares of Cumulative
Preferred Stock to be redeemed. Each such Redemption Notice
shall state:
<PAGE>
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the number of shares of Cumulative Preferred Stock to be
redeemed and, if fewer than all the shares of Cumulative
Preferred Stock held by a Holder are to be redeemed, the
number of shares thereof to be redeemed from such Holder;
(iv) the manner and place or places at which payment for the shares
of Cumulative Preferred Stock offered for Redemption will be
made, upon presentation and surrender to the Corporation of
the certificates evidencing the shares being redeemed;
(v) that dividends on the shares of Cumulative Preferred Stock
being redeemed shall cease to accrue on the Redemption Date
unless the Corporation defaults in the payment of the
Redemption Price with respect to such shares; and
(vi) that the rights of Holders of Cumulative Preferred Stock as
stockholders of the Corporation with respect to shares being
redeemed shall terminate as of the Redemption Date unless the
Corporation defaults in the payment of the Redemption Price
with respect to such shares.
Upon mailing any such Redemption Notice, the Corporation shall become
obligated to redeem at the Redemption Price on the applicable
Redemption Date all shares of Cumulative Preferred Stock therein
specified.
(c)On any Redemption Date, the full Redemption Price shall become
payable in cash for the shares of Cumulative Preferred Stock
being redeemed on such Redemption Date. As a condition of
payment of the Redemption Price, each Holder of Cumulative
Preferred Stock must surrender the certificate or certificates
representing the shares of Cumulative Preferred Stock being
redeemed to the Corporation in the manner and at the place
designated in the Redemption Notice. Each surrendered
certificate shall be canceled and retired. All Redemption
payments will be made to the Holders of the shares being
redeemed.
(d)On any Redemption Date, unless and to the extent that the
Corporation defaults in the payment of the Redemption Price
for any shares called for Redemption, dividends on the
Cumulative Preferred Stock called for Redemption shall cease
to accumulate, and all rights of Holders of such shares shall
terminate, except for the right to receive the Redemption
Price, without interest.
7. RESTRICTION ON REDEMPTIONS AND
OTHER ACQUISITIONS OF CERTAIN STOCK
Except in the case of repurchases of Common Stock by the Corporation
pursuant to Article II, Section 7 of the Bylaws of the Corporation, the
Corporation shall not purchase, redeem or otherwise acquire for consideration,
directly or indirectly, any shares of Cumulative Preferred Stock, Parity
Dividend Securities, Parity Liquidation Securities, Junior Dividend Securities
or Junior Liquidation Securities unless on or prior to the date of such
purchase, redemption or acquisition full cumulative dividends have been or
contemporaneously are declared in compliance with Section 4(a) hereof, and a sum
set apart sufficient for such payment, on the Cumulative Preferred Stock for all
Dividend Periods terminating on or prior to such date. Notwithstanding the
foregoing, the Corporation may acquire Cumulative Preferred Stock, Parity
Dividend Securities, Parity Liquidation Securities, Junior Dividend Securities
or Junior Liquidation Securities (the "Replaced Securities") as a result of a
reclassification, exchange or conversion of the Replaced Securities solely into
or for other Capital Stock of the
<PAGE>
Corporation (the "Replacing Securities"), or through the use solely of
the proceeds of a substantially simultaneous sale of Replacing Securities,
provided in any such case that the Replacing Securities are no higher in
priority with respect to the Cumulative Preferred Stock and the Non-Cumulative
Preferred Stock, as to either dividend rights or rights on liquidation,
dissolution and winding-up, than the Replaced Securities.
8. VOTING RIGHTS
The Cumulative Preferred Stock, except as otherwise required by law,
shall be non-voting.
9. MUTILATED OR MISSING CUMULATIVE PREFERRED STOCK CERTIFICATES
If any of the Cumulative Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the Corporation shall issue, in exchange
and substitution for and upon cancellation of the mutilated Cumulative Preferred
Stock certificate, or in lieu of and substitution for the Cumulative Preferred
Stock certificate lost, stolen or destroyed, a new Cumulative Preferred Stock
certificate of like tenor and representing an equivalent number of shares of
Cumulative Preferred Stock, but only upon receipt of evidence satisfactory to
the Corporation of such loss, theft or destruction of such Cumulative Preferred
Stock certificate and indemnity and bond, if requested.
10. REISSUANCE OF CUMULATIVE PREFERRED STOCK
Shares of Cumulative Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed or exchanged,
shall (upon compliance with any applicable provisions of the laws of the State
of New York) have the status of authorized and unissued shares of Class A
Preferred Stock of the Corporation undesignated as to series and may be
redesignated and reissued as part of any series of Class A Preferred Stock of
the Corporation.
11. BUSINESS DAY
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a Business Day, such payment, redemption
or exchange shall be made on the immediately succeeding Business Day.
12. HEADINGS OF SUBDIVISIONS
The headings of various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
13. SEVERABILITY OF PROVISIONS
If any right, preference or limitation of the Cumulative Preferred
Stock set forth herein is invalid, unlawful or incapable of being enforced by
reason of any rule or law or public policy, all other rights, preferences and
limitations set forth herein which can be given effect without the invalid,
unlawful or unenforceable right, preference or limitation shall, nevertheless,
remain in full force and effect, and no right, preference or limitation herein
set forth shall be deemed dependent upon any other such right, preference or
limitation unless so expressed herein.
<PAGE>
14. LIMITATIONS
Except as may otherwise be required by law, the shares of Cumulative
Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth herein or otherwise in the Certificate of Incorporation of the
Corporation.
********************
DESIGNATION, PREFERENCES AND RIGHTS OF CLASS B, SERIES 1 10% CUMULATIVE
PREFERRED STOCK
1. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings
(with terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
"Annual Dividend Period" means the annual period commencing on and
including each Dividend Payment Date and ending on and including the day before
the immediately subsequent Dividend Payment Date.
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, Sunday, national
holiday or other day on which commercial banks in New York City are authorized
or required to close under the laws of the State of New York.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Class A Series" means any series of Class A Preferred Stock, par value
$1.00 per share, of the Corporation.
"Common Stock" means the Common Voting Stock, par value $5.00 per share,
of the Corporation and any other class of common stock hereafter authorized by
the Corporation from time to time.
"Corporation" means Pro-Fac Cooperative, Inc.
"Dividend Payment Date" means the April 1 of each year.
"Dividend Period" means the Initial Dividend Period and, thereafter, each
Annual Dividend Period.
"Dividend Record Date" means with respect to the dividend payable on each
Dividend Payment Date, the immediately preceding March 15 or such other record
date as may be designated by the Board of Directors with respect to the dividend
payable on such Dividend Payment Date.
"Holder" means a registered holder of shares of Series 1 Preferred Stock.
"Initial Dividend Period" means, with respect to each share of Series 1
Preferred Stock, the dividend period commencing on the Issue Date of such share
of Series 1 Preferred Stock and ending on and including the day before the
immediately succeeding Dividend Payment Date.
<PAGE>
"Issue Date" means, with respect to each share of Series 1 Preferred
Stock, the April 1 or October 1 upon which or next succeeding the date upon
which such share was originally issued by the Corporation.
"Junior Dividend Securities" has the meaning specified in Section 3(a)
hereof and includes the Common Stock.
"Junior Liquidation Securities" has the meaning specified in Section 3(a)
hereof and includes the Common Stock.
"Liquidation Preference" means, with respect to each share of Series 1
Preferred Stock, the Original Liquidation Preference, plus an amount in cash
equal to all accrued and unpaid dividends (including an amount equal to a
prorated dividend from the last Dividend Payment Date to the date such
Liquidation Preference is being determined). The Liquidation Preference of a
share of Series 1 Preferred Stock will increase on a daily basis as dividends
accrue on such share and will decrease only to the extent such dividends are
actually paid.
"Non-Cumulative Amount" has the meaning specified in Section 4(a) hereof.
"Non-Cumulative Preferred Stock" means the Non-Cumulative Preferred Stock,
par value $25.00 per share, of the Corporation.
"Original Liquidation Preference" means $10.00 per share of Series 1
Preferred Stock.
"Other Class B Series" means any series of Class B Preferred Stock, par
value $1.00 per share, of the Corporation other than the Series 1 Preferred
Stock.
"Parity Dividend Securities" has the meaning specified in Section 3(b)
hereof and includes the Non-Cumulative Preferred Stock, any Class A Series and
any Other Class B Series.
"Parity Liquidation Securities" has the meaning specified in Section 3(b)
hereof and includes the Non-Cumulative Preferred Stock, any Class A Series, and
any Other Class B Series.
"Redemption" has the meaning specified in Section 6(a) hereof.
"Redemption Date" has the meaning specified in Section 6(b) hereof.
"Redemption Notice" has the meaning specified in Section 6(b) hereof.
"Redemption Price" means a price per share equal to the Liquidation
Preference as of the applicable Redemption Date.
"Replaced Securities" has the meaning specified in Section 7 hereof.
"Replacing Securities" has the meaning specified in Section 7 hereof.
"Senior Dividend Securities" has the meaning specified in Section 3(c)
hereof.
"Senior Liquidation Securities" has the meaning specified in Section 3(c)
hereof.
"Series 1 Preferred Stock" means the Class B, Series 1 10% Cumulative
Preferred Stock, par value $1.00 per share, of the Corporation.
<PAGE>
2. DESIGNATION
The series of preferred stock authorized hereunder shall be designated as
the "Class B, Series 1 10% Cumulative Preferred Stock." The number of shares
constituting such series shall initially be 500,000, which number may from time
to time be changed (but not above 500,000 or below the number then outstanding)
by the Board of Directors. The par value of the Series 1 Preferred Stock shall
be $1.00 per share. All shares of Series 1 Preferred Stock shall be identical
with each other in all respects except as to the dates from and after which
dividends thereon shall be cumulative.
3. RANK
The Series 1 Preferred Stock shall rank, with respect to priority of
dividend rights or rights on liquidation, dissolution and winding-up of the
affairs of the Corporation or both:
(a)senior to all classes or series of Common Stock of the Corporation
and to any other class or series of Capital Stock (except the
Non-Cumulative Preferred Stock, any Class A Series, and any
Other Class B Series) that does not expressly provide that it
ranks senior to or on a parity with the Series 1 Preferred
Stock as to dividends or upon liquidation, dissolution and
winding-up, as the case may be (with respect to such junior
dividend rights or junior rights upon liquidation, dissolution
and winding up, collectively referred to, as the context may
require, as "Junior Dividend Securities" or "Junior
Liquidation Securities");
(b)on a parity with the Non-Cumulative Preferred Stock, any Class A
Series, and any Other Class B Series and each class or series
of Capital Stock that expressly provides that it ranks on a
parity with the Series 1 Preferred Stock as to dividends or
upon liquidation, dissolution and winding-up, as the case may
be (with respect to such parity dividend rights or parity
rights upon liquidation, dissolution and winding-up,
collectively referred to, as the context may require, as
"Parity Dividend Securities" or "Parity Liquidation
Securities"); and
(c)junior to each class or series of Capital Stock (except any Class A
Series or Other Class B Series) that expressly provides that
it ranks senior to the Series 1 Preferred Stock as to
dividends or upon liquidation, dissolution and winding-up, as
the case may be (with respect to such senior dividend rights
or senior rights upon liquidation, dissolution and winding-up,
collectively referred to, as the context may require, as
"Senior Dividend Securities" or "Senior Liquidation
Securities").
4. DIVIDENDS, ETC.
(a)Beginningon the applicable Issue Date, the Holders of outstanding
shares of Series 1 Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors,
but only out of funds legally available for the payment of
dividends, dividends payable in cash at the rate per share of
$1.00 per year and no more. All dividends shall be fully
cumulative and shall accrue (whether or not earned or
declared, whether or not permitted under any agreement of the
Corporation and whether or not there are funds legally
available therefor), without interest, from the first day of
the Annual Dividend Period with respect to which such dividend
may be payable as herein provided, except that with respect to
the first dividend payable with respect to any share of Series
1 Preferred Stock, such dividend shall accrue from the
applicable Issue Date. All dividends shall be cumulative and
shall be payable in arrears on each Dividend Payment Date
commencing on the Dividend Payment Date that follows the
Dividend Record Date immediately succeeding the applicable
Issue Date, in preference to and with priority over dividends
on Junior Dividend Securities. No full dividend and no
distribution shall be declared by the Board of Directors or
paid or set apart for payment by the Corporation on the Series
1
<PAGE>
Preferred Stock for any period unless dividends aggregating at least the
Non-Cumulative Amount have been or contemporaneously are
declared on the Non-Cumulative Preferred Stock (including any
dividends previously declared for the same stated dividend
payment date pursuant to this sentence), payable not later
than the stated dividend payment date for the Non-Cumulative
Preferred Stock on or next following the date of payment of
such dividend or distribution on the Series 1 Preferred Stock,
and a sum has been or contemporaneously is set apart
sufficient for such payment. The "Non-Cumulative Amount" means
the pro rata portion of the anticipated annual dividends (in
any case, not less than six percent per annum) on the
Non-Cumulative Preferred Stock calculated for the period from,
but not including, its immediately preceding stated dividend
payment date (whether or not any dividend was paid on such
date) through, and including, the date of payment of such
dividend or distribution on the Series 1 Preferred Stock.
(b)All dividends and distributions paid with respect to shares of the
Series 1 Preferred Stock pursuant to Section 4(a) hereof shall
be paid pro rata to the Holders entitled thereto. No full
dividend and no distribution shall be declared by the Board of
Directors or paid or set apart for payment by the Corporation
on Parity Dividend Securities for any period unless full
cumulative dividends have been or contemporaneously are
declared and a sum set apart sufficient for such payment on
the Series 1 Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of such full
dividends on the Parity Dividend Securities. If any dividends
are not paid in full upon the shares of the Series 1 Preferred
Stock and the Parity Dividend Securities, (i) all dividends
declared for any period upon shares of the Series 1 Preferred
Stock and the Parity Dividend Securities shall be declared pro
rata so that the amount of dividends declared on the Series 1
Preferred Stock and on each class or series of the Parity
Dividend Securities shall in all cases bear to each other the
same ratio that accrued dividends (or, in the case of the
Non-Cumulative Preferred Stock, that portion of the
Non-Cumulative Amount which has not previously been declared
and set apart) on the Series 1 Preferred Stock and on each
class or series of Parity Dividend Securities bear to each
other, and (ii) a sum shall be set apart sufficient to pay any
such declared dividends that are not being paid immediately.
Any dividend not paid on the Series 1 Preferred Stock pursuant
to this Section 4 shall be fully cumulative and shall accrue,
without interest, as set forth in Section 4(a) hereof and
shall be in arrears until paid.
(c)The Corporation shall not declare, pay or set apart for payment
any dividend on any of the Junior Dividend Securities or make
any distribution in respect thereof either directly or
indirectly and whether in cash, obligations or shares of the
Corporation or other property (other than dividends or
distributions in Junior Dividend Securities that are no higher
in priority with respect to the Series 1 Preferred Stock, as
to rights on liquidation, dissolution and winding-up, than the
Junior Dividend Securities upon which such dividend or
distribution is issued), unless on or prior to the date of
declaration of such dividend or distribution on the Junior
Dividend Securities full cumulative dividends have been or
contemporaneously are declared in compliance with Section 4(a)
hereof, and a sum set apart sufficient for such payment, on
the Series 1 Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of such
dividend or distribution on the Junior Dividend Securities.
(d)The amount of dividends payable on the Series 1 Preferred Stock
for any period less than a full Annual Dividend Period
(including, in some cases, the Initial Dividend Period) and
the Non-Cumulative Amount shall be computed on the basis of
twelve 30 day months and a 360-day year. Dividends shall
accrue on a daily basis during each Dividend Period as
provided above, and the Liquidation Preference of each
outstanding share of Series 1 Preferred Stock shall be
correspondingly increased on a daily basis. Each such dividend
shall be payable to Holders of record as their names shall
appear on the stock books of the Corporation on the Dividend
Record Date for such dividends, except that dividends in
arrears for any past Dividend Payment Date may be declared
<PAGE>
and paid at any time without reference to such regular Dividend
Payment Date to Holders of record on such date not more than
fifty (50) days prior to the date of payment as shall be
determined by the Board of Directors.
(e)Dividendsshall cease to accrue in respect of any particular share of
Series 1 Preferred Stock on the Redemption Date with respect
thereto unless the Corporation defaults in payment of the
Redemption Price with respect to such share of Series 1
Preferred Stock.
5. PAYMENT ON LIQUIDATION
Upon any liquidation, dissolution or winding-up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of Series 1 Preferred
Stock will be entitled to receive out of the assets of the Corporation available
for distribution to the holders of its Capital Stock an amount in cash per share
equal to the Liquidation Preference determined as of the date of such
liquidation, dissolution or winding-up, before any payment or other distribution
is made on any Junior Liquidation Securities. Holders of Series 1 Preferred
Stock shall not be entitled to any other distribution in the event of
liquidation, dissolution or winding-up of the affairs of the Corporation. If
upon any liquidation, dissolution or winding-up of the affairs of the
Corporation, the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of the Series
1 Preferred Stock and all Parity Liquidation Securities, then the holders of all
such shares shall share equally and ratably in any distribution of assets in
proportion to the full liquidation payments determined as of the date of such
liquidation, dissolution or winding-up, to which each of them is entitled. For
the purposes of this Section 5, neither a consolidation or merger of the
Corporation with or into one or more corporations nor a sale, lease, exchange or
transfer of all or substantially all of the Corporation's assets shall be deemed
to be a liquidation, dissolution or winding-up of the Corporation.
6. REDEMPTION
(a)Redemption. The Corporation may redeem at the option of the Corporation
in its sole discretion, at any time or from time to time, in
whole or in part, shares of Series 1 Preferred Stock (a
"Redemption"), at the Redemption Price. With respect to any
Redemption of fewer than all the outstanding shares of Series
1 Preferred Stock, the number of shares to be redeemed and the
manner of selecting the shares to be redeemed (which may be
pro rata, by lot, by Issue Date, based on whether the Holder
is or has ceased to be an employee of the Corporation or a
subsidiary thereof, or such other method as the Board of
Directors deems appropriate) shall be determined by the Board
of Directors. The Board of Directors shall have full power and
authority, subject to the provisions herein contained, to
prescribe the terms and conditions upon which shares of the
Series 1 Preferred Stock shall be redeemed from time to time.
(b)Notice of Redemption. Notice of any Redemption of shares of Series 1
Preferred Stock, specifying the time and place of Redemption
and the Redemption Price (a "Redemption Notice"), shall be
mailed, not more than sixty (60) nor less than thirty (30)
days prior to the date fixed for Redemption (the "Redemption
Date"), in a postage prepaid envelope to each Holder of Series
1 Preferred Stock to be redeemed, at the address for such
Holder shown on the Corporation's records. No failure to give
such Redemption Notice nor any defect therein shall affect the
validity of the procedure for the Redemption of any shares of
Series 1 Preferred Stock to be redeemed. Each such Redemption
Notice shall state:
<PAGE>
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the number of shares of Series 1 Preferred Stock to be
redeemed and, if fewer than all the shares of Series 1
Preferred Stock held by a Holder are to be redeemed, the
number of shares thereof to be redeemed from such Holder;
(iv) the manner and place or places at which payment for
the shares of Series 1 Preferred Stock offered for
Redemption will be made, upon presentation and
surrender to the Corporation of the certificates
evidencing the shares being redeemed (if such shares
are certificated shares);
(v) that dividends on the shares of Series 1 Preferred
Stock being redeemed shall cease to accrue on the
Redemption Date unless the Corporation defaults in
the payment of the Redemption Price with respect to
such shares; and
(vi) that the rights of Holders of Series 1 Preferred
Stock as stockholders of the Corporation with respect
to shares being redeemed shall terminate as of the
Redemption Date unless the Corporation defaults in
the payment of the Redemption Price with respect to
such shares.
Upon mailing any such Redemption Notice, the Corporation shall become
obligated to redeem at the Redemption Price on the applicable
Redemption Date all shares of Series 1 Preferred Stock therein
specified.
(c)On any Redemption Date, the full Redemption Price shall become
payable in cash for the shares of Series 1 Preferred Stock
being redeemed on such Redemption Date. As a condition of
payment of the Redemption Price, if the shares of Series 1
Preferred Stock being redeemed are certificated shares, each
Holder of Series 1 Preferred Stock must surrender the
certificate or certificates representing the shares of Series
1 Preferred Stock being redeemed to the Corporation in the
manner and at the place designated in the Redemption Notice.
Each surrendered certificate shall be canceled and retired.
All Redemption payments will be made to the Holders of the
shares being redeemed.
(d)On any Redemption Date, except to the extent that the Corporation
defaults in the payment of the Redemption Price for any shares
called for Redemption, dividends on the Series 1 Preferred
Stock called for Redemption shall cease to accumulate, and all
rights of Holders of such shares shall terminate, except for
the right to receive the Redemption Price, without interest.
7. RESTRICTION ON REDEMPTIONS AND
OTHER ACQUISITIONS OF CERTAIN STOCK
Except in the case of repurchases of Common Stock by the Corporation
pursuant to Article II, Section 7 of the Bylaws of the Corporation, the
Corporation shall not purchase, redeem or otherwise acquire for consideration,
directly or indirectly, any shares of Series 1 Preferred Stock, Parity Dividend
Securities, Parity Liquidation Securities, Junior Dividend Securities or Junior
Liquidation Securities unless on or prior to the date of such purchase,
redemption or acquisition full cumulative dividends have been or
contemporaneously are declared in compliance with Section 4(a) hereof, and a sum
set apart sufficient for such payment, on the Series 1 Preferred Stock for all
Dividend Periods terminating on or prior to such date. Notwithstanding the
foregoing, the
<PAGE>
Corporation may acquire Series 1 Preferred Stock, Parity Dividend
Securities, Parity Liquidation Securities, Junior Dividend Securities or Junior
Liquidation Securities (the "Replaced Securities") as a result of a
reclassification, exchange or conversion of the Replaced Securities solely into
or for other Capital Stock of the Corporation (the "Replacing Securities"), or
through the use solely of the proceeds of a substantially simultaneous sale of
Replacing Securities, provided in any such case that the Replacing Securities
are no higher in priority with respect to the Series 1 Preferred Stock and the
Non-Cumulative Preferred Stock, as to either dividend rights or rights on
liquidation, dissolution and winding-up, than the Replaced Securities.
8. VOTING RIGHTS
The Series 1 Preferred Stock, except as otherwise required by law, shall
be non-voting.
9. MUTILATED OR MISSING SERIES 1 PREFERRED STOCK CERTIFICATES
If any of the Series 1 Preferred Stock certificates shall be mutilated,
lost, stolen or destroyed, the Corporation shall issue, in exchange and
substitution for and upon cancellation of the mutilated Series 1 Preferred Stock
certificate, or in lieu of and substitution for the Series 1 Preferred Stock
certificate lost, stolen or destroyed, a new Series 1 Preferred Stock
certificate of like tenor and representing an equivalent number of shares of
Series 1 Preferred Stock, but only upon receipt of evidence satisfactory to the
Corporation of such loss, theft or destruction of such Series 1 Preferred Stock
certificate and indemnity and bond, if requested.
10. REISSUANCE OF SERIES 1 PREFERRED STOCK
Shares of Series 1 Preferred Stock that have been issued and reacquired in
any manner, including shares purchased or redeemed or exchanged, shall (upon
compliance with any applicable provisions of the laws of the State of New York)
have the status of authorized and unissued shares of Class B Preferred Stock of
the Corporation undesignated as to series and may be redesignated and reissued
as part of any series of Class B Preferred Stock of the Corporation.
11. BUSINESS DAY
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a Business Day, such payment, redemption
or exchange shall be made on the immediately succeeding Business Day.
12. HEADINGS OF SUBDIVISIONS
The headings of various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
13. SEVERABILITY OF PROVISIONS
If any right, preference or limitation of the Series 1 Preferred Stock set
forth herein is invalid, unlawful or incapable of being enforced by reason of
any rule or law or public policy, all other rights, preferences and limitations
set forth herein that can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set forth
shall be deemed dependent upon any other such right, preference or limitation
unless so expressed herein.
<PAGE>
14. LIMITATIONS
Except as may otherwise be required by law, the shares of Series 1
Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth herein or otherwise in the Certificate of Incorporation of the
Corporation.
********************
7. The following provisions are adopted for the regulations of the
business and conduct of the affairs of the corporation:
(a) No transaction, right or liability entered into, enjoyed or incurred
by or in respect of the corporation, shall be affected by the fact that
any director or directors of the corporation are or may have been
personally interested in or concerning the same, and each director of the
corporation is hereby relieved of and from any and all liability which
otherwise might prevent him from contracting with the corporation for the
benefit of himself, or any firm, association or corporation, in which in
any way he may be interested.
(b) The Board of Directors may, from time to time, sell any or all of the
unissued capital stock of the corporation, whether the same be any of the
original authorized capital or of any increase thereof, without first
offering the same to the stockholders then existing, and all such sales
may be made upon such terms and conditions as by the Board may be deemed
advisable, and may restrict a purchase, sale, distribution, transfer,
owning and holding of stock as fully and to the extent as authorized by
the Cooperative Corporations Law.
(c) The earnings and savings of the corporation, after payment of
dividends as aforesaid and after deduction of reserve and other funds in
amounts required or permitted by law to be established, shall be
distributed, whether in the form of stock, cash, or evidence of
indebtedness, or notices of equity or participation or in services,
proportionately and equitably among the persons for whom it does business,
on the basis of the amount of sales, purchases or other services, rendered
to or by such persons, and within the limits of law provided.
(d) No director of the corporation shall be personally liable to the
corporation or to any member or shareholder for damages for any breach of
duty in such capacity except where a judgment or other final adjudication
adverse to such director establishes: (i) that the director's acts or
omissions were in bad faith or involved intentional misconduct or a
knowing violation of law; or (ii) that the director personally gained in
fact a financial profit or other advantage to which the director was not
legally entitled; or (iii) that the director's acts violated Section 719
of the New York Business Corporation Law. If the New York Business
Corporation Law or Cooperative Corporation Law is hereafter amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of the directors of the
corporation shall be eliminated or limited to the fullest extent permitted
by the New York Business Corporation Law and Cooperative Corporation Law,
as so amended.
8. The Secretary of State of the State of New York is designated as the
agent of the corporation upon whom process against it may be served, and the
post office address to which the Secretary of State shall mail a copy of such
process served upon him is P.O. Box 682, Rochester, New York 14603.
<PAGE>
5. The amendment and restatment of the certificate of
incorporation was authorized by vote of a majority of the Board of Directors at
a meeting duly convened and held on August 21, 1997.
IN WITNESS WHEREOF, we have made and subscribed this
certificate this ____ day of August, 1997 and affirm the statements contained
herein as true under penalties of perjury.
/s/Bruce R. Fox
Bruce R. Fox, President
/s/Tommy R. Croner_____________
Tommy R. Croner, Secretary
STATE OF NEW YORK )
) ss:
COUNTY OF MONROE )
On this ____ day of August, 1997, before me personally came
Bruce R. Fox and Tommy R. Croner, to me personally known, who, being by me duly
sworn did depose and say that they are the President and Assistant Secretary,
respectively, of Pro-Fac Cooperative, Inc., the corporation described in the
foregoing certificate, and that they signed their names thereto by order of the
Board of Directors of said corporation.
----------------------------------
Notary Public
