SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 2, 1998
Seneca Foods Corporation
(Exact name of registrant as specified in its charter)
New York 0-1989 16-0733425
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1162 Pittsford-Victor Road, Pittsford, New York 14534
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 716/385-9500
Not Applicable
Former name or former address, if changed since last report
This document contains 7 pages.
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The Exhibit Index is located on Page 7.
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FORM 8-K
SENECA FOODS CORPORATION
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Item 1. Changes in Control of Registrant.
See discussion in Item 5 below.
Item 5. Other Events.
On September 2, 1998, the Registrant consummated a $50 million
equity investment previously described in the Company's Current Report on Form
8-K filed with the Securities and Exchange Commission (the "Commission") on July
2, 1998. The equity investment resulted from a Rights Offering to Registrant's
common shareholders as described in the following paragraph (the "Rights
Offering") and a Stock Purchase Agreement (the "Stock Purchase Agreement") with
certain investors as described in the second following paragraph.
The Rights Offering consisted of a distribution payable to the
holders of the Registrant's Class A common stock, $0.25 par value per share (the
"Class A Common Stock") and Class B common stock, $0.25 par value per share (the
"Class B Common Stock" and together with the Class A Common Stock, the "Common
Stock"), whereby, each holder of Common Stock received a right (the "Right") to
purchase at a subscription price of $12.00 per share (the "Subscription Price"),
shares of Convertible Participating Preferred Stock, $12.00 stated value per
share (the "New Preferred Stock"). The shares of New Preferred Stock are
convertible immediately on a share-for-share basis into shares of Class A Common
Stock. The Registrant distributed one-half of a Right for each share of Common
Stock held of record as of July 13, 1998. Each whole Right entitled the holder
thereof (a "Rights Holder") to receive upon payment of the Subscription Price,
one share of New Preferred Stock. The Rights were evidenced by Subscription
Certificates transferable by the holders thereof. The Rights expired at 5:00
p.m., Eastern Daylight Time, on August 27, 1998. Holders of the Registrant's
Common Stock acquired 1,146,639 shares of New Preferred Stock under the Rights
Offering for a total investment of $13,759,668.
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Pursuant to the Stock Purchase Agreement with Carl Marks
Strategic Investments, L.P., a Delaware limited partnership, Carl Marks
Strategic Investments II, L.P., a Delaware limited partnership and Uranus Fund,
Ltd., a Cayman Islands corporation (collectively, the "New Investors"), the New
Investors agreed to (i) purchase from the Registrant 1,166,667 shares of New
Preferred Stock for a total investment of $14,000,004 (or $12.00 per share) and
(ii) act as standby purchasers with respect to up to 2,500,000 shares of New
Preferred Stock not purchased by the Registrant's shareholders in the Rights
Offering. The Registrant was not required to sell under the Stock Purchase
Agreement and the Rights Offering more than 4,166,667 shares of New Preferred
Stock at a total price of $50,000,004. The New Investors acquired a total of
3,019,895 shares of New Preferred Stock for an aggregate purchase price of
$36,238,740. The total investment received by the Company as a result of the
Rights Offering and investment by the New Investors was $49,998,408 (4,166,534
shares of New Preferred Stock).
Concurrently with the Stock Purchase Agreement, the New
Investors, the Registrant, and certain of its substantial shareholders, entered
into a Shareholders Agreement dated June 22, 1998 (the "Shareholders
Agreement"). The members of the Kayser and Wolcott families agreed to certain
restrictions on sales by them of shares of (i) Class A Common Stock, (ii) Class
B Common Stock, (iii) New Preferred Stock and (iv) other securities of the
Registrant that are entitled to vote in the election of directors (the "Shares")
including a general restriction against sales of Shares to third persons before
September 2, 2000.
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The consummation of the foregoing agreements permit the New
Investors to participate significantly in the governance of the Registrant. As a
result of the equity investment transaction (and assuming conversion of all of
the shares of New Preferred Stock into Class A Common Stock) the New Investors
and certain of the Company's existing shareholders that are related to the New
Investors through family relationships and common ownership of certain business
entities collectively exercise approximately 16% of the total voting power of
the Company (in an election of directors). The terms of the Stock Purchase
Agreement and Shareholders Agreement provide other opportunities for the New
Investors to exercise influence over the Company. One such provision required
that the Registrant's Board of Directors be increased from seven to nine
members. The two new positions have been filled by designees of the New
Investors, Andrew M. Boas and Arthur H. Baer (the "Investor Designees"). The
Investor Designees will continue to be nominated for election to the Board and
shareholders who executed the Shareholders Agreement will continue to vote for
the Investor Designees until the Stock Purchase Agreement is terminated or such
time as the New Investors no longer own, in the aggregate, at least 10% of the
Registrant's Class A Common Stock (assuming conversion of all shares of the New
Preferred Stock into Class A Common Stock). As required by the Shareholders
Agreement, the Investor Designees have been nominated to the committees of the
Registrant's Board of Directors so that the Investor Designees comprise at least
22% of any such committees. Moreover, the Registrant has amended its Certificate
of Incorporation to require unanimous approval of the Registrant's Board of
Directors (excluding directors who abstain from voting) for certain defined
"major corporate actions", including (i) any amendment or modification to the
Registrant's Certificate of Incorporation or Bylaws; (ii) any business
combination; (iii) any sale or transfer of all or substantially all of the
assets of the Registrant; (iv) certain issuances of securities; (v) any
acquisition or disposition or series of related acquisitions or dispositions of
assets involving gross consideration in excess of $15 million; (vi) certain
changes in the Registrant's line of business; (vii) any change in the
Registrant's certified public accountants; (viii) the settlement of certain
litigation; or (ix) the commencement by the Registrant of proceedings relating
to bankruptcy, insolvency, reorganization or relief of debtors (the "Major
Corporate Actions"). The requirement of unanimous Board approval for the Major
Corporate Actions (excluding directors who abstain from voting) terminates when
the New Investors no longer own, in the aggregate, at least 15% of the
Registrant's Class A Common Stock (assuming conversion of all shares of New
Preferred Stock into shares of Class A Common Stock).
Pursuant to a Registration Rights Agreement dated June 22,
1998, the Registrant granted to the New Investors certain registration rights
under the Securities Act of 1933 (the "Registration Rights") with respect to the
shares purchased by the New Investors pursuant to the Stock Purchase Agreement
and the Rights Offering. The Registration Rights Agreement gives the New
Investors, subject to certain limitations, (i) demand Registration Rights and
(ii) Registration Rights to participate in other public securities offerings
initiated on behalf of the Registrant or other holders.
To effect the foregoing matters in this Item 5, Registrant
filed a Certificate of Amendment with the New York Secretary of State, (pursuant
to shareholder approval) to amend its Certificate of Incorporation to: (i)
increase the number of authorized shares of Class A Common Stock from 10,000,000
shares to 20,000,000 shares; (ii) increase the number of authorized shares of
Preferred Stock with $.025 par value per share, Class A from 4,000,000 shares to
8,200,000 shares; (iii) set forth the rights, preferences and limitations of the
New Preferred Stock; (iv) require unanimous board approval (excluding directors
who choose to abstain), in accordance with Section 709 of the New York Business
Corporation Law, of the Major Corporate Actions; and (v) remove the acquisition
by the New Investors of Class A Common Stock issuable upon conversion of the New
Preferred Stock from the operation of certain provisions of the Certificate of
Incorporation with respect to the purchase of Class A Common Stock.
Registrant used the proceeds from the equity investment to
reduce its indebtedness to its revolving credit bank lenders.
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Item 7. Financial Statements and Exhibits.
Exhibits:
2(a) Stock Purchase Agreement dated as of June 22, 1998
between the Registrant and the New Investors
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
2(b) Shareholders Agreement dated as of June 22, 1998
between the Registrant, the New Investors and certain
substantial shareholders of the Registrant
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
2(c) Registration Rights Agreement dated as of June 22,
1998 between the Registrant and the New Investors
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
3(i) Certificate of Amendment of the Registrant's
Certificate of Incorporation (filed herewith).
10 Amendment No. 2 to Alliance Agreement dated July 1,
1998 (filed herewith).*
20(a) Press Release of the Registrant dated June 22, 1998
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
(b) Press Release of the Registrant dated September 2,
1998 (filed herewith).
* Portions of this exhibit have been omitted based upon a
request for confidential treatment and the omitted portions
have been filed with the Securities and Exchange Commission.
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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 hereunto duly authorized.
SENECA FOODS CORPORATION
Date: September 17, 1998 By:/s/Philip G. Paras
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Name: Philip G. Paras
Title: Vice President-Finance
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Exhibit Index
Exhibit No. Description
2(a) Stock Purchase Agreement dated as of June 22, 1998
between the Registrant and the New Investors
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
2(b) Shareholders Agreement dated as of June 22, 1998
between the Registrant, The New Investors and certain
substantial shareholders of the Registrant
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
2(c) Registration Right Agreement dated as of June 22,
1998 between the Registrant and the New Investors
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
3(i) Certificate of Amendment of the Registrant's
Certificate of Incorporation (filed herewith).
10 Amendment No. 2 to Alliance Agreement dated July 1,
1998 (filed herewith).*
20 (a) Press Release of the Registrant dated June 22, 1998.
(incorporated by reference to Registrant's Current
Report on Form 8-K filed with the Commission on July
2, 1998).
(b) Press release of the Registrant dated September 2,
1998 (filed herewith).
* Portions of this exhibit have been omitted based upon a request for
confidential treatment and the omitted portions have been filed with
the Securities and Exchange Commission
503006
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
SENECA FOODS CORPORATION
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Under Section 805 of the
Business Corporation Law
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We, the undersigned, being the President and Secretary of
SENECA FOODS CORPORATION, do hereby certify as follows:
FIRST: The name of the Corporation is SENECA FOODS CORPORATION. The
name under which the Corporation was formed is SENECA GRAPE JUICE
CORPORATION.
SECOND: The certificate of incorporation of the Corporation was filed
by the Department of State on August 17, 1949.
THIRD: The certificate of incorporation of the Corporation hereby is
amended to:
(a) Increase the number of authorized shares of Class A Common
Stock, $0.25 par value per share from ten million (10,000,000) shares to twenty
million (20,000,000) shares; and
(b) Increase the number of authorized shares of Preferred
Stock with $.025 par value, Class A from four million (4,000,000) shares to
eight million two hundred thousand (8,200,000) shares.
To accomplish this, Article 3 of the certificate of
incorporation, hereby is amended to read in its entirety as follows:
(a) The Capital Stock of the Corporation shall consist of
twenty million (20,000,000) shares of Class A Common Stock of the par value of
$0.25 each; ten million (10,000,000) shares of Class B Common Stock of the par
value of $0.25 each; two hundred thousand (200,000) shares of Six Percent (6%)
Voting Cumulative Preferred Stock of the par value of $0.25 each; thirty
thousand (30,000) shares of Preferred Stock Without Par Value, to be issued in
series by the Board of Directors, pursuant to the provisions of Article 4,
Section (c) hereof, subject to the limitations prescribed by law; and eight
million two hundred thousand (8,200,000) shares of Preferred Stock with $.025
par value, Class A, to be issued in series by the Board of Directors pursuant to
the provisions of Article 4, Section (d) hereof, subject to the limitations
prescribed by law.
FOURTH: Article 4, paragraph (a)(C) of the certificate of incorporation
of the Corporation hereby is amended as follows:
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(a) The definition of "Person" in paragraph (a)(C)(ii) hereby
is amended to read in its entirety as follows:
As used in this Article 4(a)(C), "Person" shall include one or
more persons or entities who act or agree to act in concert with respect to the
acquisition or disposition of Class B Common Stock or with respect to proposing
or effecting a plan or proposal to (a) a merger, reorganization or liquidation
of the Corporation or a sale of a material amount of its assets, (b) a change in
the Corporation's Board of Directors or management, including any plans or
proposal to fill vacancies on the Board of Directors or change the number or
term of Directors, (c) a material change in the business or corporate structure
of the Corporation, or (d) any material change in the capitalization or dividend
policy of the Corporation. As used in the preceding sentence, "act or agree to
act in concert" shall not include acts or agreements to act by persons pursuant
to their official capacities as Directors or officers of the Corporation or
because they are related by blood or marriage; it being determined for purposes
of this paragraph that the agreements dated as of June 22, 1998 made with
respect to capitalization and management changes between the Corporation,
certain of its directors and officers and various shareholders, including
certain shareholders related to said directors and officers and the Investors
(as defined in paragraph (a)(C)(iii) of this Article 4), as they may be amended
from time to time, were "acts or agreements to act by persons pursuant to their
official capacities as Directors or officers of the Corporation or because they
are related by blood or marriage."
(b) The following new paragraph (a)(C)(iii) hereby is added to
Article 4:
"(iii) For purposes of Article 4(a)(C)(ii), any shares of Participating
Preferred Stock (as defined in paragraph (d)(F) of this Article 4) held by Carl
Marks Strategic Investments, L.P., Carl Marks Strategic Investments, II, L.P.,
Uranus Fund, Ltd., or any of their Affiliates (as defined in paragraph (d)(F) of
this Article 4) (the "Investors") shall be deemed to have been converted into
shares of Class A Common Stock that are acquired after the Threshold Date. Any
such shares of Class A Common Stock deemed to be held by the Investors or their
Affiliates pursuant to the preceding sentence or any shares of Class A Common
Stock issued upon conversion of the Convertible Participating Preferred Stock
and held by the Investors shall be deemed to have been acquired for an
"equitable price" for purposes of Article 4(a)(C)(ii)."
(c) The existing paragraph (a)(C)(iii) hereby is renumbered as
paragraph (a)(C)(iv).
FIFTH: The certificate of incorporation of the Corporation is amended to
permit the Board of Directors to provide for additional or participating
distributions to holders of shares of Preferred Stock with $.025 Par Value,
Class A.
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To accomplish this, Article 4, paragraph (d)(C) hereby is
amended to read in its entirety as follows:
(C) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of shares of each series of Class A Preferred Stock
then outstanding shall be entitled to receive out of the
assets of the Corporation, before any distribution or payment
shall be made to the holders of any class of common stock, an
amount equal to the stated value of the stock plus, in respect
of each share with respect to which dividends are cumulative,
a sum computed at the dividend rate or dividend amount
provided for in the certificate of incorporation from and
after the date on which dividends on such shares became
cumulative to and including the date fixed for such payment,
less the aggregate of the dividends theretofore paid thereon,
but computed without interest. If the amounts payable on
liquidation in respect to the shares of all series of Class A
Preferred Stock are not paid in full, the shares of all series
of such class shall share ratably in any distribution of
assets other than by way of dividends in accordance with the
sums which would be payable in such distribution if all sums
payable were discharged in full. If such payment shall have
been made in full to the holders of all shares of Class A
Preferred Stock on voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the remaining
assets of the Corporation shall, except as otherwise provided
herein, be distributed among the holders of each class of
common stock pro rata in accordance with their respective
holdings. For the purpose of this paragraph, a consolidation
or merger of the Corporation with one or more other
corporations shall not be deemed to be a liquidation or
winding up of the Corporation. In addition to the above-stated
distributions to holders of preferred stock, the Board of
Directors is authorized, in the rights, preferences and other
provisions with respect to any one or more series of Class A
Preferred Stock, to provide for additional or participating
distributions to holders of shares of such series on
liquidation, dissolution or winding up of the Corporation.
SIXTH: The certificate of incorporation of the Corporation hereby is
amended to authorize a third series of Class A Preferred Stock to be designated
Convertible Participating Preferred Stock.
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To accomplish this, the following new Article 4(d)(F) hereby
is added to the certificate of incorporation:
"(F) Third Series of Class A Preferred Stock. The third series
of 4,166,667 shares of Class A Preferred Stock shall be designated Convertible
Participating Preferred Stock (hereinafter "Participating Preferred Stock"), and
shall have the following rights, preferences and limitations:
(i) Stated Value. The stated value for each share of Participating
Preferred Stock shall be $12 (the "Stated Value").
(ii) Dividends and Distributions. At any time after the Issue Date,
the holders of each share of Participating Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, but out of funds
legally available therefor, a dividend or distribution in cash, evidences of
indebtedness of the Corporation or another issuer, options, warrants or rights
to acquire securities or other property (including, without limitation, rights
issued pursuant to a shareholder rights plan, "poison pill" or similar plan or
arrangement and options or rights granted to each holder of Class A Common
Stock), securities of the Corporation or another issuer (excluding securities
for which adjustment is made under paragraph (vii)(d)(1) or paragraph
(vii)(d)(2)) or other property or assets, including, without limitation, any
such distribution made in connection with a consolidation or merger in which the
Corporation is the resulting or surviving corporation), at a rate per share (and
in the type of property) equal to the amount of any dividend or distribution
(and in the same type of property) as that declared or made on any shares
(including, without limitation, Class A Common Stock) into which one share of
Participating Preferred Stock may be converted pursuant to paragraph (vii) below
on the record date for such dividend or distribution. Any such dividend or
distribution shall be paid to the holders of shares of Participating Preferred
Stock at the same time such dividend or distribution is made to the holders of
the shares of Class A Common Stock. No dividend or distribution shall be
declared or made on any shares of Class A Common Stock unless any dividend or
distribution required to be declared or made under the first sentence of this
paragraph is previously or simultaneously declared or made. Dividends and
distributions shall be cumulative from and after the date of issuance of such
shares of Participating Preferred Stock, but any arrearage in payment shall not
pay interest.
(iii) Voting Rights. (a) Except as otherwise required by law or as
set forth in paragraph (b), the holders of shares of Participating Preferred
Stock shall not be entitled or permitted to vote on any matter required or
permitted to be voted upon by the shareholders of the Corporation.
(b) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Participating Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of shareholders called for the purpose,
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shall be necessary to (i) authorize the issuance after the Issue Date of any
class of capital stock that will rank as to payment of dividends or rights on
liquidation, dissolution or winding up of the Corporation senior to the
Participating Preferred Stock, (ii) authorize, adopt or approve an amendment to
the certificate of incorporation that would increase or decrease the par value
of the shares of Participating Preferred Stock, (iii) amend, alter or repeal the
certificate of incorporation so as to affect the shares of Participating
Preferred Stock adversely or (iv) effect the voluntary liquidation, dissolution,
winding up, recapitalization or reorganization of the Corporation, or the
consolidation or merger of the Corporation with or into any other Person, or the
sale or other distribution to another Person of all or substantially all of the
assets of the Corporation; provided, however, that no separate vote of the
holders of Participating Preferred Stock shall be required to effect any of the
transactions described in clause (iv) above unless such transaction would either
require a class vote pursuant to clause (i), (ii) or (iii) above or would
require a vote by any shareholders of the Corporation.
(iv) Redemption. The shares of Participating Preferred Stock shall
not be redeemed or subject to redemption, whether at the option of the
Corporation or any holder thereof, or otherwise.
(v) Acquired Shares. Any shares of Participating Preferred Stock
converted, exchanged, redeemed, purchased or otherwise acquired by the
Corporation or any of its subsidiaries in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares of
Participating Preferred Stock shall upon their cancellation become authorized
but unissued shares of Class A Preferred Stock and, upon the filing of an
appropriate certificate with the Department of State of the State of New York,
may be reissued as part of another series of Class A Preferred Stock subject to
the conditions or restrictions on issuance set forth herein, but in any event
may not be reissued as shares of Participating Preferred Stock unless all of the
shares of Participating Preferred Stock issued on the Issue Date shall have
already been converted or exchanged.
(vi) Participating Distribution upon Liquidation of the Corporation.
In addition to the preferential distribution payable to holders of Participating
Preferred Stock equal to the Stated Value (the "Preferential Distribution") as
provided for under Article 4(d)(C) of this certificate of incorporation, an
additional participating distribution shall be payable to holders of
Participating Preferred Stock upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (the "Participating Distribution")
with the effect that the total distribution to holders of the Participating
Preferred Stock shall be the greater of (a) the Preferential Distribution or (b)
the total distribution which holders of Participating Preferred Stock would have
received if all outstanding shares of Participating Preferred Stock were
converted into shares of common stock immediately prior to the date for
calculating the total distribution available to holders of preferred stocks and
common stocks. To achieve the distribution required by the preceding sentence,
the following calculation shall be made:
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(1) Calculate the sum of (a) the total
amounts available for distribution
to holders of all classes of common
stock after payment of all
preferential distributions to all
classes of preferred stocks of the
Corporation, including the
Preferential Distribution to
Participating Preferred Stock, plus
(b) the total amount of the
Preferential Distribution to holders
of all outstanding shares of
Participating Preferred Stock.
(2) Divide the sum calculated in
subparagraph (1) by the total number
of shares of common stock into which
the Participating Preferred Stock is
convertible and of all classes of
common stock deemed outstanding for
purposes of calculating the
distribution on liquidation,
dissolution or winding up of the
Corporation. The product of this
calculation is the "Per Share
Distribution on Assumed Conversion."
(3) The excess, if any, of the Per Share
Distribution on Assumed Conversion
over the Preferential Distribution
to each share of Participating
Preferred Stock shall be distributed
as a Participating Distribution to
the holders of the Participating
Preferred Stock upon liquidation,
dissolution or winding up of the
Corporation.
(vii) Conversion. (a) Any holder of Participating Preferred Stock
shall have the right, as its option, at any time (but subject to the provisions
of paragraph (vii)(b)) to convert, subject to the terms and provisions of this
paragraph (vii), any or all of such holder's shares of Participating Preferred
Stock into such number of fully paid and nonassessable shares of Class A Common
Stock as is equal to the product of the number of shares of Participating
Preferred Stock being so converted multiplied by the quotient of (i) the Stated
Value divided by (ii) the conversion price of $12.00 per share, subject to
adjustment as provided in paragraph (vii)(d) (the "Conversion Price"), then in
effect. Such conversion right shall be exercised by the surrender of the shares
of Participating Preferred Stock to be converted to the Corporation at any time
during usual business hours at its principal place of business to be maintained
by it, accompanied by written notice that the holder elects to convert such
shares and specifying the name or names (with addresses) in which a certificate
or certificates for shares of Class A Common Stock are to be issued and (if so
required by the Corporation) by a written instrument or instruments of transfer
in form reasonably satisfactory to the Corporation duly executed by the holder
or its duly authorized legal representative and transfer tax stamps or funds
therefor, if required pursuant to paragraph (vii)(k). All shares of
Participating Preferred Stock surrendered for conversion shall be delivered to
the Corporation for cancellation and canceled by it and no shares shall be
issued in lieu thereof.
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(b) As promptly as practicable after the surrender, as herein
provided, of any shares of Participating Preferred Stock for conversion pursuant
to paragraph (vii)(a), the Corporation shall deliver to or upon the written
order of the holder of the shares so surrendered a certificate or certificates
representing the number of fully paid non-assessable shares of Class A Common
Stock into which such shares may be or have been converted in accordance with
the provisions of this paragraph (vii). Subject to the following provisions of
this paragraph and of paragraph (vii)(d), such conversion shall be deemed to
have been made immediately prior to the close of business on the date that such
shares shall have been surrendered in satisfactory form for conversion, and the
Person or Persons entitled to receive the Class A Common Stock deliverable upon
conversion of such shares shall be treated for all purposes as having become the
record holder or holders of such Class A Common Stock at such time.
(c) To the extent permitted by law, when shares of
Participating Preferred Stock are converted, all unpaid dividends (whether or
not currently payable) on the Participating Preferred Stock so converted to the
date of conversion shall be immediately due and payable and must accompany the
shares of the Class A Common Stock issued upon such conversion.
(d) The Conversion Price shall be subject to adjustment as
follows:
(1) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding shares
of Class A Common Stock in Class A Common Stock, (B) sub-divide the outstanding
shares of Class A Common Stock into a larger number of shares, (C) combine the
outstanding shares of Class A Common Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification of the Class A
Common Stock, then, and in each such case, the Conversion Price in effect
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Corporation) so that the holder of any share of
Participating Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Class A Common Stock or other
capital stock of the Corporation that such holder would have owned or would have
been entitled to receive upon or by reason of any of the events described above,
had such share of Participating Preferred Stock been converted immediately prior
to the occurrence of such event. An adjustment made pursuant to this paragraph
(vii)(d)(1) shall become effective retroactively (A) in the case of any such
dividend or distribution, to the opening of business on the day immediately
following the close of business on the record date for the determination of
holders of Class A Common Stock entitled to receive such dividend or
distribution or (B) in the case of any such subdivision, combination or
reclassification, to the close of business on the day upon which such corporate
action becomes effective.
(2) In case the Corporation shall at any time or from
time to time issue or sell shares of Class A Common Stock or Class B Common
Stock (or
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securities convertible into or exchangeable for shares of Class A Common Stock
or Class B Common Stock), or any options, warrants or other rights to acquire
shares of Class A Common Stock or Class B Common Stock (other than (x) options
granted to any employee or director of the Corporation pursuant to a stock
option plan approved by the shareholders of the Corporation, (y) options,
warrants or rights granted to each holder of Class A Common Stock or (z) rights
issued pursuant to a shareholder right plans, "poison pill" or similar
arrangement that complies with paragraph (vii)(j)) for a consideration per share
less than the Current Market Price at the record date or issuance date, as the
case may be (the "Date"), referred to in the following sentence (treating the
price per share of any security convertible or exchangeable or exercisable into
Class A Common Stock and/or Class B Common Stock as equal to (A) the sum of the
price for such security convertible, exchangeable or exercisable into Class A
Common Stock and/or Class B Common Stock plus any additional consideration
payable (without regard to any anti-dilution adjustments) upon the conversion,
exchange or exercise of such security into Class A Common Stock and/or Class B
Common Stock divided by (B) the number of shares of Class A Common Stock and/or
Class B Common Stock initially underlying such convertible, exchangeable or
exercisable security), other than issuances or sales for which an adjustment is
made pursuant to another paragraph of this paragraph (vii)(d), then, and in each
case, the Conversion Price then in effect shall be adjusted by dividing the
Conversion Price in effect on the day immediately prior to the Date by a
fraction (x) the numerator of which shall be the sum of the numbers of shares of
Class A Common Stock and Class B Common Stock outstanding immediately prior to
the Date plus the number of additional shares of Class A Common Stock and Class
B Common Stock issued or to be issued (or the maximum number into which such
convertible or exchangeable securities initially may convert or exchange or for
which such options, warrants or other right initially may be exercised) and (y)
the denominator of which shall be the sum of the number of shares of Class A
Common Stock and Class B Common Stock outstanding immediately prior to the Date
plus the number of shares of Class A Common Stock and Class B Common Stock that
the aggregate consideration (if any of such aggregate consideration is other
than cash, as valued by the Board of Directors including a majority of the
directors who are not officers or employees of the Corporation or any of its
subsidiaries, which determination shall be conclusive and described in a
resolution of the Board of Directors) for the total number of such additional
shares of Class A Common Stock and/or Class B Common Stock so issued (or into
which such convertible or exchangeable securities may convert or exchange for
which such options, warrants or other rights may be exercised plus the aggregate
amount of any additional consideration initially payable upon conversion,
exchange or exercise of such security) would purchase at the Current Market
Price. Such adjustment shall be made whenever such shares, securities, options,
warrants or other rights are issued, and shall become effective retroactively to
a date immediately following the close of business (i) in the case of issuance
to shareholders of the Corporation, as such, on the record date for the
determination of shareholders entitled to receive such shares, securities,
options, warrants or other rights and (ii) in all other cases, on the date (the
"Issuance Date") of such issuance; provided, however, that the determination as
to whether an adjustment is required to be made pursuant to this paragraph
(vii)(d)(2) shall only be made upon the issuance of such shares or such
convertible
8
<PAGE>
or exchangeable securities, options, warrants or other rights, and not upon the
issuance of the security into which such convertible or exchangeable security
converts or exchanges, or the security underlying such options, warrants or
other right.
(3) In case the Corporation or any subsidiary thereof
shall, at any time or from time to time while any of the Participating Preferred
Stock is outstanding, make a Pro Rata Repurchase, the Conversion Price shall be
adjusted by dividing the Conversion Price in effect immediately prior to such
action by a fraction (which in no event shall be less than one), the numerator
of which shall be the product of (i) the number of shares of Class A Common
Stock and Class B Common Stock outstanding immediately before such Pro Rata
Repurchase minus the number of shares of Class A Common Stock and Class B Common
Stock repurchased in such Pro Rata Repurchase and (ii) the Current Modified
Market Price as of the day immediately preceding the first public announcement
by the Corporation of the intent to effect such Pro Rata Repurchase, and the
denominator of which shall be (i) the product of (x) the number of shares of
Class A Common Stock and Class B Common Stock outstanding immediately before
such Pro Rata Repurchase and (y) the Current Modified Market Price as of the day
immediately preceding the first public announcement by the Corporation of the
intent to effect such Pro Rata Repurchase minus (ii) the aggregate purchase
price of the Pro Rata Repurchase.
(4) In case the Corporation at any time or from time
to time shall take any action affecting its Class A Common Stock, other than an
action described in any of paragraph (vii)(d)(1) through paragraph (vii)(d)(3),
inclusive, or paragraph (vii)(g), then, the Conversion Price shall be adjusted
in such manner and at such time as the Board of Directors of the Corporation in
good faith determines to be equitable in the circumstances (such determinations
to be evidenced in a resolution, a certified copy of which shall be mailed to
the holders of the Participating Preferred Stock).
(5) The Corporation may make such reductions in the
Conversion Price, in addition to those required by subparagraphs (1) through (4)
of this paragraph (vii)(d), as the Board of Directors considers to be advisable
in order to avoid or to diminish any income tax to holders of Class A Common
Stock or rights to purchase Class A Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
(6) Notwithstanding anything herein to the contrary,
no adjustment of the Conversion Price shall be required pursuant to this
paragraph (vi)(d) by reason of the initial issuance or sale of any of the
4,166,667 authorized shares of Participating Preferred Stock.
(7) Notwithstanding anything herein to the contrary,
no adjustment under this paragraph (vii)(d) need to be made to the Conversion
Price unless such adjustment would require an increase or decrease of at least
1% of the Conversion Price then in effect. Any lesser adjustment shall be
carried forward and shall be made at the time
9
<PAGE>
of and together with the next subsequent adjustment, which, together with any
adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least 1% of such Conversion Price. Any adjustment to the
Conversion Price carried forward and not theretofore made shall be made
immediately prior to the conversion of any shares of Participating Preferred
Stock pursuant hereto; provided, however, that any such adjustment shall in any
event be made no later than one year after the occurrence of the event giving
rise to such adjustment.
(e) Upon any increase or decrease in the Conversion Price,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Participating Preferred Stock at least ten Business Days
prior to effecting any of the foregoing transactions a certificate, signed by
the President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Corporation, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased
Conversion Price then in effect following such adjustment.
(f) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares of Participating
Preferred Stock. If more than one share of Participating Preferred Stock shall
be surrendered for conversion at one time by the same holder, the number of full
shares of Class A Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate Stated Value of the shares of
Participating Preferred Stock so surrendered. If the conversion of any share or
shares of Participating Preferred Stock results in a fraction, an amount equal
to such fraction multiplied by the Current Market Price of the Class A Common
Stock on the Business Day preceding the day of conversion shall be paid to such
holder in cash by the Corporation on the date of issuance of the certificates
representing the shares by the Corporation upon such conversion.
(g) In case of any capital reorganization or reclassification or
other change of outstanding shares of Class A Common Stock, or in case of any
consolidation or merger of the Corporation with or into another Person (other
than a consolidation or merger in which the Corporation is the resulting or
surviving Person and which does not result in any reclassification or change of
outstanding Class A Common Stock), or in case of any sale or other disposition
to another Person of all or substantially all of the assets of the Corporation
(any of the foregoing, a "Transaction"), the Corporation, or such successor or
purchasing Person, as the case may be, shall execute and deliver to each holder
of Participating Preferred Stock at least ten Business Days prior to effecting
any of the foregoing Transactions a certificate that the holder of each share of
Participating Preferred Stock then outstanding shall have the right hereafter to
convert such share of Participating Preferred Stock into the kind and amount of
shares of stock or other securities (of such Corporation or another issuer) or
property or cash receivable upon such Transaction by a holder of the number of
shares of Class A Common Stock into which such share of Participating Preferred
Stock could have been converted immediately prior to such
10
<PAGE>
transaction. Such certificate shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
paragraph (vii). If, in the case of any such Transaction, the stock, other
securities, cash or property receivable thereupon by a holder of Class A Common
Stock includes shares of stock or other securities of a Person other than the
successor or purchasing Person and other than the Corporation, which controls or
is controlled by the successor or purchasing Person or which, in connection with
such Transaction, issues, stock securities, other property or cash to holders of
Class A Common Stock, then such certificate also shall be executed by such
Person, and such Person shall, in such certificate, specifically acknowledge the
obligations of such successor or purchasing Person and acknowledge its
obligations to issue such stock, securities, other property or cash to the
holders of the Participating Preferred Stock upon conversion of the shares of
Participating Preferred Stock as provided above. The provisions of this
paragraph (vii) and any equivalent thereof in any such certificate similarly
shall apply to successive Transactions.
(h) In case at any time or from time to time:
(1) the Corporation shall authorize the granting to the
holders of its Class A Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights or warrants;
(2) there shall be any reclassification of the Class A
Common Stock (other than a subdivision or combination of the outstanding Class A
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or any sale or other disposition of all or
substantially all of the assets of the Corporation; or
(3) the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall mail to each holder of shares of Participating
Preferred Stock at such holder's address as it appears on the transfer books of
the Corporation, at least 20 days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such rights or warrants or, if a record is not to be taken, the
date as of which the holders of Class A Common Stock of record to be entitled to
such rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up is expected to become effective. Such notice also
shall specify the date as of which it is expected that holders of Class A Common
Stock of record shall be entitled to exchange their Class A Common Stock for
shares of stock or other securities or property or cash deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.
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<PAGE>
(i) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Participating Preferred Stock,
such number of its authorized but unissued shares of Class A Common Stock as
will from time to time be sufficient to permit the conversion of all outstanding
shares of Participating Preferred Stock.
(j) The Corporation shall not adopt a shareholder rights
plan, "poison pill" or similar arrangement unless such plan or arrangement shall
provide that each holder of a share of Participating Preferred Stock shall be
entitled to receive thereunder rights for each share of Class A Common Stock
that may be issued upon conversion of such share of Participating Preferred
Stock in an amount equal to the amount of rights issued with respect to each
outstanding share of Class A Common Stock pursuant to such plan.
(k) The issuance or delivery of certificates for Class A
Common Stock upon the conversion of shares of Participating Preferred Stock
shall be made without charge to the converting holder of shares of Participating
Preferred Stock for such certificates or for any tax in respect of the issuance
or delivery of such certificates or the securities represented thereby, and such
certificates shall be issued or delivered in the respective names of, or in such
names as may be directed by, the holders of the shares of Participating
Preferred Stock converted; provided, however, that the Corporation shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in a name other than that
of the holder of the shares of Participating Preferred Stock converted, and the
Corporation shall not be required to issue or deliver such certificates unless
or until the Person or Persons requesting the issuance or delivery thereof shall
have paid to the Corporation the amount of such tax or shall have established to
the reasonable satisfaction of the Corporation that such tax has been paid.
(l) To the extent that pursuant to the terms of this
paragraph (vii), the Participating Preferred Stock is convertible into any
securities or property other than Class A Common Stock, then for purposes of
this Article 4(d)(F), references to Class A Common Stock shall be deemed
appropriately amended to refer to such other securities or property.
(viii) Definitions. As used in this Article 4(d)(F), the
following terms shall have the meanings indicated:
(a) An "Affiliate" of, or a person "affiliated" with a
specified Person, means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified. The term "control" (including the terms
"controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
12
<PAGE>
(b) "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which commercial banks in the City of New York
are authorized or required by law or executive order to close.
(c) "Current Market Price" per share shall mean, on any
date specified herein for the determination thereof, (A) the average daily
Market Price of the Class A Common Stock for those days during the period
commencing not more than 30 days before, and ending not later than such date, on
which the national securities exchanges were open for trading or the Class A
Common Stock was quoted in the over-the-counter market, and (B) if the Class A
Common Stock is not then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, the Market Price
on such date.
(d) "Current Modified Market Price" per share shall mean,
on any date specified herein for the determination thereof, (A) the average
daily Modified Market Price of the Class A Common Stock for those days during
the period commencing not more than 30 days before, and ending not later than
such date, on which the national securities exchanges were open for trading or
the Class A Common Stock was quoted in the over-the-counter market, and (B) if
the Class A Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Modified Market Price on such date.
(e) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.
(f) "Fair Market Value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length transaction.
(g) "Issue Date" shall mean the first date on which
shares of Participating Preferred Stock are issued.
(h) "Market Price" shall mean, per share of Class A
Common Stock, on any date specified herein: (a) the closing price per share of
the Class A Common Stock on such date published in The Wall Street Journal or,
if no such closing price on such date is published in The Wall Street Journal,
the closing bid price on such date, as officially reported on the principal
national securities exchange on which the Class A Common Stock is then listed or
admitted to trading; or (b) if the Class A Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of the Class
A Common Stock on such date; or (c) if there shall have been no trading on such
date or if the Class A Common Stock is not so designated, the reported closing
bid price of the Class A Common Stock, on such date as shown by the Nasdaq
National Market or other over-the-counter market and reported by any member firm
of the New York Stock Exchange selected
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<PAGE>
by the Corporation; or (d) if none of (a), (b) or (c) is applicable, a market
price per share determined at the Corporation's expense by a nationally
recognized appraiser chosen by the holders of a majority of the shares of
Participating Preferred Stock and approved by the Corporation, which approval
shall not be unreasonably withheld. If no such appraiser is chosen more than 20
Business Days after notice of the necessity of such calculation shall have been
delivered by the Corporation to the holders of Participating Preferred Stock,
then the appraiser shall be chosen by the Corporation.
(i) "Modified Market Price" shall mean, per share of Class
A Common Stock, on any date specified herein: (a) the closing price per share of
the Class A Common Stock on such date published in The Wall Street Journal or,
if no such closing price on such date is published in The Wall Street Journal,
the closing asked price on such date, as officially reported on the principal
national securities exchange on which the Class A Common Stock is then listed or
admitted to trading; or (b) if the Class A Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of the Class
A Common Stock on such date; or (c) if there shall have been no trading on such
date or if the Class A Common Stock is not so designated, the reported closing
asked price of the Class A Common Stock on such date as shown by the Nasdaq
National Market or other over-the-counter market and reported by any member firm
of the New York Stock Exchange selected by the Corporation; or (d) if none of
(a), (b) or (c) is applicable, a market price per share determined at the
Corporation's expense by a nationally recognized appraiser chosen by the holders
of a majority of the shares of Participating Preferred Stock and approved by the
Corporation, which approval shall not be unreasonably withheld. If no such
appraiser is chosen more than 20 Business Days after notice of the necessity of
such calculation shall have been delivered by the Corporation to the holders of
Participating Preferred Stock, then the appraiser shall be chosen by the
Corporation.
(j) "NASD" shall mean the National Association of
Securities Dealers, Inc.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, government (or
any agency or political subdivision thereof) or other entity of any kind, and
shall include any successor (by merger or otherwise) of such entity.
(l) "Pro Rata Repurchase" shall mean any purchase of
shares of Class A Common Stock or Class B Common Stock by the Corporation or by
any of its subsidiaries whether for cash, shares of capital stock of the
Corporation, other securities of the Corporation, evidences of indebtedness of
the Corporation or any other Person or any other property (including, without
limitation, shares of capital stock, other securities or evidences of
indebtedness of a subsidiary of the Corporation), or any combination thereof,
effected while any of the shares of Participating Preferred Stock are
outstanding, which
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<PAGE>
purchase is subject to Section 13(e) of the Exchange Act or is made pursuant to
an offer made available to all holders of Class A Common Stock or Class B Common
Stock.
SEVENTH: The certificate of incorporation of the Corporation is hereby amended
to require unanimous approval of the Corporation's Board of Directors for
certain major corporate actions.
To accomplish this, the following new Article 10 hereby is
added to the certificate of incorporation:
10. Until such time as the Investors and any permitted assignees under
the Shareholders Agreement shall own, in the aggregate, 15% or less of
the outstanding Class A Common Stock (assuming conversion of all shares
of Participating Preferred Stock into Class A Common Stock):
(a) All of the directors of the Corporation shall be present
at any meeting of the directors in order to constitute a quorum for the
transaction of any Major Corporate Actions (as defined in subparagraph (b))
below; and
(b) Each of the following actions (the "Major Corporate
Actions") shall require the unanimous approval of all of the Corporation's
directors voting thereon (excluding directors who abstain from voting):
(i) any amendment or modification of the Corporation's
Restated Certificate of Incorporation, as amended, or ByLaws;
(ii) any merger, consolidation, amalgamation,
recapitalization or other form of business combination (other that any
acquisition that would be permitted under paragraph (d) below)
involving the Corporation or any subsidiary of the Corporation;
(iii) any sale, conveyance, lease, transfer or other
disposition of all or substantially all of the assets of the
Corporation;
(iv) any single acquisition or disposition or series
of related acquisitions or disposition of assets, including stock
(whether by purchase, merger or otherwise), in the Principal Line of
Business (as hereinafter defined) of the Corporation involving gross
consideration in excess of $15 million;
(v) any change in the line of business (food
processing, packaging, distribution and canning of fruits and
vegetables and other business operations complementary or incidental
thereto) of the Corporation and its subsidiaries (the "Principal Line
of Business"), whether by acquisition of assets or otherwise; provided,
that the Corporation and its subsidiaries may
15
<PAGE>
change or dispose of any existing business or acquire any business
that, in each case, is not within their Principal Line of Business, if
the consolidated net sales from all such business engaged in (or
proposed to be engaged in) by the Corporation and its subsidiaries do
not exceed in the aggregate 2% of the consolidated net sales of the
Corporation and its subsidiaries (determined by reference to the latest
annual or quarterly period in the latest available consolidated
financial statements of the Corporation and any business proposed to be
acquired);
(vi) any issuance of or agreement to issue, or any
repurchase, redemption or other acquisition or agreement to repurchase,
redeem or otherwise acquire, any shares of capital stock of the
Corporation or any of its subsidiaries or rights of any kind
convertible into or exercisable or exchangeable for, any shares of
capital stock of the Corporation or any of its subsidiaries, or any
option, warrant or other subscription or purchase right with respect to
shares of capital stock except for (i) any stock buybacks not to exceed
$100,000 in any one transaction or $1 million in the aggregate and (ii)
any issuances of shares of Class A Common Stock pursuant to the terms
of Seneca Foods Corporation Employees' Savings Plan in effect on the
date hereof;
(vii) any change in the Corporation's certified
public accountants from Deloitte & Touche LLP, or any successor of
Deloitte & Touche LLP;
(viii) the settlement of any litigation to which the
Corporation or any of its subsidiaries is a party involving the payment
by the Corporation or its subsidiaries of an aggregate amount greater
than 5% of the Company's Adjusted Tangible Net Worth, or involving the
consent to any injunctive or similar relief; and
(ix) the commencement by the Corporation or any of
its subsidiaries or proceedings under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the making by
the Corporation or any of its subsidiaries of a general assignment for
the benefit of its creditors.
16
<PAGE>
To the extent that the above-referenced Board approval is not obtained with
respect to any Major Corporate Action, the Corporation may not take or perform
such Major Corporate Action. For purposes of paragraph (h) above, the
Corporation's "Adjusted Tangible Net Worth" shall mean (i) the net book value
(after deducting related depreciation, obsolescence, amortization, valuation and
other proper reserves, which reserves will be determined in accordance with
generally accepted accounting principles) at which the assets of the Corporation
and its subsidiaries on a consolidated basis (except (w) patents, copyrights,
trademarks, trade names, franchises, goodwill and other similar intangibles, (x)
unamortized debt discount and expense, (y) accounts, notes and other receivables
due from any person directly or indirectly controlling, controlled by or under
common control with the Corporation, and (z) write-ups in the book value of any
fixed asset resulting from a revaluation thereof effective after June 22, 1998)
are shown on the latest available consolidated balance sheet of the Corporation
on such date minus (ii) the amount at which the liabilities of the Corporation
and its subsidiaries are shown on such consolidated balance sheet (including as
liabilities all reserves for contingencies and other potential liabilities as
shown on such consolidated balance sheet).
EIGHTH: The manner in which shares of the Corporation shall be changed hereby
upon the filing of this certificate by the Department of State is as follows:
<TABLE>
<CAPTION>
Shares Changed Hereby Shares Resulting From Change
<S> <C>
Class A Common Stock with a par value of Class A Common Stock with a par value of
$0.25 per share: $0.25 per share:
3,143,125 issued shares 3,143,125 issued shares
6,856,875 unissued shares 16,856,875 unissued shares
Preferred Stock with $.025 par value per Preferred Stock with $.025 par value per
share, Class A: share, Class A:
807,240 issued shares 807,240 issued shares
3,192,760 unissued shares 7,392,760 unissued shares
</TABLE>
NINTH: The foregoing amendments of the certificate of incorporation were
authorized at a meeting of the Board of Directors, followed by the votes cast in
person or by proxy of the holders of record of a majority of the votes cast in
favor of or against such action at an annual shareholders meeting of the
Corporation by the shareholders entitled to vote thereon.
17
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Certificate of Amendment to be executed this 7th day of August 1998,
and affirm that the statements made herein are true under penalty of perjury.
SENECA FOODS CORPORATION
By:/s/Kraig H. Kayser
----------------------
Name: Kraig H. Kayser
Title: President
By:/s/Jeffrey L. Van Riper
-----------------------
Name: Jeffrey L. Van Riper
Title: Secretary
18
<PAGE>
Exhibit 10
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE COMMISSION.
Amendment No. 2
To First Amended And Restated Alliance Agreement
This Agreement is entered into effective as of the 1st day of July, 1998 by and
among The Pillsbury Company having its principal offices at Pillsbury Center,
200 South Sixth Street, Minneapolis, Minnesota 55402 ("Pillsbury"), and Seneca
Foods Corporation having its principal offices at 1162 Pittsford-Victor Road,
Pittsford, New York 14534 ("Seneca").
W I T N E S S E T H
WHEREAS, Pillsbury and Seneca are parties to a First Amended and Restated
Alliance Agreement entered into December 8, 1994 as amended on February 10, 1995
(The "Agreement"), and
WHEREAS, to improve the overall working arrangement between the parties for the
remainder of the term of the Agreement, the parties agree to make the following
changes to the Agreement for their mutual benefit:
1. The seventh Whereas clause is amended in its entirety to read as follows:
"WHEREAS, following such sale, Seneca intends to provide
Pillsbury with such long-term, strategic alliance supply from Seneca
Plants and the Sold Plants under this Agreement. As identified on
Exhibit A hereto, the Seneca Plants and the Sold Plants located in the
Midwest and Northwest and two plants located in the state of New York
are collectively referred to herein as the "Central Division Plants,"
the Seneca Plants located in the Northeast (other than the two New York
plants referred to above) which will be producing Products under the
terms of this Agreement, if any, are collectively referred to herein as
the "Eastern Division Plants", and the Central Division Plants and the
Eastern Division Plants are collectively referred to herein as the
Alliance Plants";
2. The following definitions are hereby amended and replaced in their entirely:
"Agreement" means this Alliance Agreement as amended from time to time.
"Central Division Plants" means, collectively, the Seneca Plants and
the Sold Plants located in the Midwest, Northwest and in the state of New York
which are identified on Exhibit A hereto.
<PAGE>
"Continuous Improvement Program Team" means a team of employees of
Seneca and, initially, Pillsbury who are charged with developing and
implementing cost reduction projects at the Central Division Plants under this
Alliance Agreement.
"Cost Reduction Project" means a cost saving initiative proposed or
implemented by the Continuous Improvement Program Team.
"Eastern Division Plants" means, collectively, the Seneca Plants
located in the Northeast, if any, which will be producing Products under the
terms of this Agreement.
"Seneca" means Seneca Foods Corporation, a New York corporation.
3. The following sentences are added at the end of Section 3.2 (Central Division
Transfer Prices):
"The parties may agree from time to time in writing without further
need to amend this Agreement to add additional plants to the Central
Division Plants, either for a given Product or Fiscal Year. In the
event such plants are added, they will be accounted for based upon the
percentage of the plant's production which is sold to Pillsbury."
4. Section 3.3 of the Agreement titled Eastern Division Transfer Prices in
hereby amended in its entirety as follows:
3.3 Eastern Division Transfer Prices. The price charged by Seneca to
Pillsbury for all Acceptable Cases of Products (identified by SKU)
produced at any Eastern Division Plant, if any, shall be calculated by
adding * per Equivalent Case to the Transfer Prices for such Products
then in effect. In addition, to the extent can supplies are
manufactured, or purchased by Seneca especially for use, in the Eastern
Division, Seneca shall include in its invoice to Pillsbury the ED Can
Differential.
5. A New Subsection 3.6(g) is added as follows:
3.6 Payment Terms.
(g) Management Fee Calculations. For purposes of calculating the
Management Fee only, the Plants located in Marion, New York and Geneva, New
York, as well as any Plants temporarily added pursuant to Section 3.2 shall not
be treated as Central Division Plants.
6. A New Section is added as follows:
7.6 For certain major capital additions and potential fixed asset
write-offs (over *) at the Central Division Plants, Pillsbury and Seneca agree
to review such projects on a stand-alone basis and ascertain the most equitable
approach to funding such projects.
* Confidential Information Has Been Omitted Pursuant to a Request for
Confidential Treatment and the Omitted Information Has been Separately
Filed With the Securities and Exchange Commission.
<PAGE>
7. ARTICLE VIII titled "COST REDUCTIONS" shall be replaced in its entirety with
the following:
8.1 Cost Reduction Incentives. Seneca and Pillsbury agree to share
equally in any savings derived during the first year of the Cost
Reduction Project from a Cost Reduction Project that is proposed by the
Continuous Improvement Program Team and approved by the ARB or their
designees. The Continuous Improvement Program Team will initially be
headed by a Pillsbury employee and supported by Seneca employees to
develop, implement and track specific Cost Reduction Projects. It is
the intent of the Parties that Seneca will internalize the function of
the Continuous Improvement Program Team when each party mutually agrees
that the program is successfully implemented. The calculations of the
cost savings will be determined in accordance with the Accounting
Procedures and will be payable each year to each party at the Year-End
Reconciliation as described in Section 3.6. After the first year of
each cost Reduction Project, all savings derived from such Cost
Reduction Project will accrue to Pillsbury or Seneca based upon the
percentage of products respectively purchased from the Plant in
question by Pillsbury or retained by Seneca for sale to non-Pillsbury
buyers, and will be built into the Standard Costs. Attached hereto as
Exhibit J-1 are the Guiding Principles under which the Continuous
Improvement Project Team will account for Cost Reduction Projects.
8.2 Cost Reduction in Supply Procurement. Pillsbury shall use its good
efforts to cooperate with Seneca to enable Seneca to procure supplies
and raw materials in a manner which seeks to maximize Seneca's
efficiency hereunder; provided that Seneca agrees that the foregoing
agreement of Pillsbury shall not obligate Pillsbury to incur
out-of-pocket expenses or costs.
* Confidential Information Has Been Omitted Pursuant to a Request for
Confidential Treatment and the Omitted Information Has been Separately
Filed With the Securities and Exchange Commission.
<PAGE>
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8. Exhibit A is amended in its entirety as follows:
EXHIBIT A
Vegetable Division Plants
Buhl, Idaho
Blue Earth, Minnesota
Cumberland, Wisconsin
Dayton, Washington
Geneva, New York
Glencoe, Minnesota
Janesville, Wisconsin
Marion, New York
Mayville, Wisconsin
Montgomery, Minnesota
Rochester, Minnesota
9. A new Exhibit J-1 is added as follows:
EXHIBIT J-1
Cost Improvement Process Guiding Principles
Savings will be measured on the net savings basis, by determining gross
savings less capital and one-time expenses.
Savings must be measurable and tangible, and will include cost
avoidance projects only with the specific approval of the ARB.
Calculations of savings of Cost Reduction Projects will be benchmarked
against plan standards, which will be reflective of normal crop years.
Cost savings realized in one year will be folded into the Standard
Costs for the following Fiscal Year.
Cost improvement program will be managed in coordination with Seneca's
fiscal year, that is from April 1 through March 31, including the fiscal year
from April 1, 1998 through March 31, 1999.
Cost savings will be recorded when incurred (generally during seasonal
pack).
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2
to be executed by their duly authorized officers or representatives.
SENECA FOODS CORPORATION THE PILLSBURY COMPANY
By: /s/Kraig H. Kayser By: /s/Thomas Paulson
Its: President Its: V.P. Finance
322790
September 2, 1998 FOR IMMEDIATE RELEASE
PRESS RELEASE
Seneca Foods Corporation announced today that it has completed the issue of
4,166,667 shares of Convertible Participating Preferred Stock. As a result, the
Company has raised $50 million through a combination of a $36 million rights
offering to its common shareholders and a $14 million direct placement of stock
to Carl Marks Strategic Investments, L.P. and related entities at a subscription
price of $12 per share. Through the rights offering, Seneca raised $36 million
as the Company's common shareholders acquired 1,146,772 shares for a total of
$13,761,264 and the Carl Marks investors acted as standby purchasers of
1,853,228 shares for a total of $22,238,736. The Carl Marks investors also
purchased 1,166,667 shares of the convertible participating preferred stock in
the $14 million direct equity placement. Seneca used proceeds from the equity
investment to extinguish outstanding short-term bank debt and for general
corporate purposes.
Seneca is primarily a fruit and vegetable processing company with manufacturing
facilities located throughout the United States. Its products are sold under the
Seneca, Libby's and TreeSweet labels as well as through the private label and
industrial markets. In addition, under an alliance with The Pillsbury Company,
Seneca produces canned and frozen vegetables which are sold by Pillsbury under
the Green Giant label. Seneca's common stock is traded on the Nasdaq National
Stock Market under the symbols "SENEA" and "SENEB".
