<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE J. M. SMUCKER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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OHIO 2033 34-0538550
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
STRAWBERRY LANE
ORRVILLE, OHIO 44667-0280
TELEPHONE: (330) 682-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEVEN J. ELLCESSOR, ESQ.
VICE PRESIDENT, FINANCE AND ADMINISTRATION
THE J. M. SMUCKER COMPANY
STRAWBERRY LANE
ORRVILLE, OHIO 44667-0280
(330) 682-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
LYLE G. GANSKE, ESQ.
DAVID P. PORTER, ESQ.
JONES, DAY, REAVIS & POGUE
NORTH POINT
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114-1190
(216) 586-3939
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the date that this registration statement has become
effective and all other conditions to the merger of JMS-Ohio, Inc. with and into
The J. M. Smucker Company pursuant to the merger agreement described in the
enclosed document have been satisfied or waived. The securities being offered
are not presently traded on any national securities exchange or on the Nasdaq
Stock Market.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER SHARE(2) PRICE(2) REGISTRATION FEE(3)
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Common Shares, without par value..... 28,325,280 $16.50 $467,367,120.00 $123,384.00
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</TABLE>
(1) The maximum number of common shares of The J. M. Smucker Company that may be
registered is based on the maximum number of shares to be issued in
connection with the merger described within.
(2) One preferred purchase right will attach to and trade with each common
share. These rights are also covered by this registration statement and the
value attributed to them, if any, is reflected in the market price of the
common shares.
(3) Pursuant to Rules 457(f)(1) and 457(c) under the Securities Act and solely
for the purpose of calculating the registration fee, the proposed maximum
aggregate offering price is equal to the average of the high and low prices
of Smucker's Class A common shares as reported on the New York Stock
Exchange Composite Tape on May 11, 2000 times the number of common shares
registered hereby.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
PRELIMINARY COPY
PROXY STATEMENT FOR
THE J. M. SMUCKER COMPANY
------------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
AUGUST 15, 2000
------------------------
PROSPECTUS FOR
THE J. M. SMUCKER COMPANY
------------------------
COMMON SHARES, WITHOUT PAR VALUE
You are cordially invited to attend The J. M. Smucker Company's Annual
Meeting of Shareholders at 11:00 a.m., Eastern Daylight Time, on August 15,
2000, at the Wooster High School Performing Arts Center, 515 Oldman Road,
Wooster, Ohio. A map showing the location of Wooster High School is on the back
cover. A notice of the annual meeting and the proxy statement follow.
In addition to the election of directors and other matters customarily
addressed at our annual meeting, you are being asked to approve the combination
of our voting Class A and non-voting Class B common shares into a single class
of voting common shares, on a one share for one share basis. The new class of
voting common shares will have time-phased voting rights similar to those of our
Class A common shares. As part of the combination, you will have a limited
opportunity to sell some or all of your Class A and/or Class B common shares to
Smucker for $18.50 per share in cash, to a maximum of $100 million in the
aggregate.
Your board of directors believes that this unique repurchase opportunity
and a simplified capital structure will enhance shareholder value by eliminating
the potential investor confusion, administrative expense, and perceived negative
impact on the market price of our common shares that results from having a dual,
voting and non-voting, class structure. Your board of directors also believes
that the combination of our Class A and Class B common shares may potentially
increase the liquidity, trading volume, and trading efficiencies of our common
shares, and potentially increase our investor base. Your board of directors
unanimously recommends that you approve the combination of our Class A and Class
B common shares into a single class.
This document provides you with detailed information about the annual
meeting, the combination of our Class A and Class B common shares into a single
class, and the opportunity to sell some or all of your shares to Smucker for
$18.50 per share in cash. The common shares you will receive in the combination
will be listed on the New York Stock Exchange.
Your participation in this annual meeting, either in person or by proxy, is
very important. Your Class A and/or Class B proxy card(s) and a return envelope
are enclosed. If you are a record holder of both Class A and Class B common
shares you should sign, date, and return both cards. For more information
concerning voting by proxy, please see the section of this document beginning on
page 11 entitled "Voting by Proxy; Revocation of Proxies." We encourage you to
read this entire document carefully. You may also obtain information about
Smucker from publicly available documents that we have filed with the Securities
and Exchange Commission. See "Where You Can Find More Information" beginning on
page 56.
It is very important that your shares be represented and voted at the
annual meeting, even if you plan to attend in person. PLEASE COMPLETE, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY CARD(S) AT YOUR EARLIEST CONVENIENCE. Thank
you for your consideration and continued support.
Sincerely,
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/s/ TIM SMUCKER /s/ RICHARD SMUCKER
Chairman President
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE COMMON SHARES TO BE ISSUED UNDER THIS DOCUMENT OR
DETERMINED IF THIS DOCUMENT IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this document is July , 2000 and
it is first being mailed to shareholders on or about July , 2000.
<PAGE> 3
PRELIMINARY COPY
THE J. M. SMUCKER COMPANY
STRAWBERRY LANE
ORRVILLE, OHIO 44667
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2000 Annual Meeting of Shareholders of The J. M. Smucker Company will
be held at 11:00 a.m., Eastern Daylight Time, on August 15, 2000, at the Wooster
High School Performing Arts Center, 515 Oldman Road, Wooster, Ohio, for the
following purposes:
(1) to approve the combination of our voting Class A and non-voting
Class B common shares into a single class of voting common shares through
the merger of a newly formed, wholly owned subsidiary of Smucker into
Smucker;
(2) to elect directors to the class whose term of office will expire
in 2003;
(3) to ratify the appointment of Ernst & Young LLP as our independent
auditors for the 2001 fiscal year; and
(4) to consider any other matter that may properly come before the
meeting.
Please note that admission to the meeting will be by admission card only.
If you plan to attend the meeting, you may obtain an admission card as follows:
- If you are a record holder of Class A or Class B common shares, mark the
appropriate box on the enclosed proxy card(s) so that we can mail an
admission card to you in advance of the meeting.
- If you are not a record holder, but instead hold Class A and/or Class B
common shares in the name of your broker, bank, or other nominee, write
to the Corporate Secretary at Strawberry Lane, Orrville, Ohio 44667-0280,
to request an admission card. Please remember to furnish proof of
shareholder status, such as a bank or brokerage firm account statement.
All shareholders WITH ADMISSION CARDS are cordially invited to attend the
meeting, although only those shareholders of record at the close of business on
July 3, 2000 are entitled to notice of the meeting and are entitled to vote at
the meeting or any adjournment or postponement of the meeting.
STEVEN J. ELLCESSOR
Vice President-Finance and
Administration,
Secretary/Treasurer, and General
Counsel
Orrville, Ohio, July , 2000
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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Summary..................................................... 1
Questions and Answers About the Annual Meeting............ 1
Additional Information.................................... 4
Market Prices and Dividends................................. 7
Selected Historical Financial Data.......................... 8
Comparative Per Share Data.................................. 9
General Information......................................... 10
Record Date; Voting Information........................... 10
Voting by Proxy; Revocation of Proxies.................... 11
Cumulative Voting......................................... 11
Proxy Solicitation Information............................ 11
Special Factors............................................. 12
Background of the Proposed Combination.................... 12
Recommendation of the Smucker Board; Reasons for the
Combination............................................ 14
Opinion of Smucker's Financial Advisor.................... 15
Effects of the Combination................................ 19
Financing of the Combination.............................. 21
Material Federal Income Tax Consequences.................. 21
The Combination............................................. 26
General................................................... 26
What Smucker's Shareholders Will Receive.................. 26
Manner of Electing Cash or Shares......................... 26
Adjustment of Amount of Cash Received..................... 27
Manner of Converting Shares............................... 27
Conditions to Completion of the Combination............... 27
Amendment of the Agreement Governing the Combination...... 28
Abandonment of the Combination............................ 28
Estimated Fees and Expenses of the Combination............ 28
Regulatory Matters........................................ 29
Dissenters' Rights........................................ 29
Shareholder Rights Plan................................... 30
Employee Benefit Plans.................................... 30
Purchases of Shares....................................... 31
Financial Statements........................................ 32
Unaudited Pro Forma Condensed Financial Statements........ 32
Ratio of Earnings to Fixed Charges........................ 36
Description of Smucker's Capital Stock Following the
Combination............................................... 37
New Common Shares......................................... 37
Preferred Shares.......................................... 37
Comparative Rights of Smucker's Shareholders Before and
After the Combination..................................... 39
Information Concerning the Directors and Executive Officers
of Smucker and JMS-Ohio................................... 40
Smucker................................................... 40
JMS-Ohio.................................................. 41
Interests of Directors, Executive Officers, and Members of
the Smucker Family in the Combination.................. 41
Election of Directors....................................... 43
Meetings and Committees................................... 45
</TABLE>
i
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PAGE
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Director Compensation..................................... 45
Report of The Executive Compensation Committee of the
Board of Directors..................................... 46
Summary Compensation Table................................ 49
Stock Options............................................. 50
Pension Plan.............................................. 51
Total Shareholder Return Graph............................ 52
Ownership of Common Shares................................ 53
Recent Transactions in Securities......................... 55
Section 16(a) Beneficial Ownership Reporting Compliance... 56
Ratification of Appointment of Independent Auditors......... 56
Legal Matters............................................... 57
Experts..................................................... 57
Annual Report............................................... 57
2001 Shareholder Proposals.................................. 57
Other Matters............................................... 57
Voting Rights of Common Shares.............................. 57
Confirmation of Beneficial Ownership........................ 58
Where You Can Find More Information......................... 58
Cautionary Statement Concerning Forward-Looking
Information............................................... 59
</TABLE>
LIST OF ANNEXES
Annex A -- Agreement of Merger
Annex B -- Sections 1701.84 and 1701.85 of the Ohio Revised Code
Annex C -- Fairness Opinion of William Blair & Company
Annex D -- Articles of Incorporation
Annex E -- Regulations
ii
<PAGE> 6
SUMMARY
This summary highlights selected information contained in this document,
and does not include all of the information that is important to you. To
understand the combination fully and for a more complete description of the
legal terms of the combination, you should read carefully this entire document
and the documents to which we have referred you. See "Where You Can Find More
Information" (page 56). We have included page references parenthetically to
direct you to a more complete description of each topic presented in this
summary.
I. QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
GENERAL
Q: WHAT AM I BEING ASKED TO VOTE ON?
A: If you are a holder of Class A common shares, we are asking you to vote
those shares on three matters:
- the combination of our voting Class A and non-voting Class B common
shares into a single class of voting common shares on a one share for one
share basis, and the limited opportunity to sell all or a portion of your
shares to Smucker for $18.50 per share in cash;
- the election of directors; and
- the ratification of the appointment of our independent auditors.
If you are a holder of Class B common shares, we are asking you to vote
those shares on the combination of our voting Class A and non-voting Class B
common shares into a single class of voting common shares on a one share for
one share basis, and the limited opportunity to sell all or a portion of
your shares to Smucker for $18.50 per share in cash.
Following the combination, our existing shareholders, other than those that
exercise statutory dissenters' rights or sell their shares to Smucker for
cash, will continue to own all of Smucker's outstanding shares. Assuming we
repurchase the full $100 million of common shares in the combination,
approximately 80% of our outstanding shares will remain outstanding
following the combination.
Q: WHO IS ELIGIBLE TO VOTE?
A: You are eligible to vote your Class A and/or Class B common shares at the
annual meeting if you were a shareholder of record of those shares at the
close of business on July 3, 2000.
COMBINATION OF SHARES INTO ONE CLASS AND LIMITED OPPORTUNITY TO SELL SHARES TO
SMUCKER
Q: WHY SHOULD I VOTE IN FAVOR OF THE COMBINATION OF THE CLASS A AND CLASS B
COMMON SHARES INTO ONE CLASS?
A: The combination will simplify Smucker's capital structure. We believe that
the combination will benefit both Smucker and you as a shareholder of
Smucker by, among other things:
- eliminating potential investor confusion and additional administrative
expenses caused by our dual class structure;
- eliminating perceived negative impact on the market price of our shares
that results from our dual class structure; and
- potentially increasing our investor base and liquidity, trading volume,
and trading efficiencies of our common shares.
Q: WHAT IS THE POSITION OF THE BOARD OF DIRECTORS REGARDING THE COMBINATION OF
THE CLASS A AND CLASS B COMMON SHARES INTO ONE CLASS?
A: Your board of directors has unanimously approved the combination, and
recommends that you vote FOR the combination.
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<PAGE> 7
Q: HOW MANY VOTES ARE NEEDED FOR THE COMBINATION TO BE APPROVED?
A: The combination requires the approval of:
- at least two-thirds of the voting power of the Class A common shares,
giving effect to ten-vote shares, voting as a class; and
- at least two-thirds of the Class B common shares, voting as a class.
Each Class A common share will have ten votes on each matter to be
considered at the meeting, including the combination, unless there has been
a change in beneficial ownership of a Class A common share during the four
years immediately preceding July 3, 2000. In the event that there has been a
change in beneficial ownership during the previous four years, the current
owner of that share will have only one vote with respect to that share. Each
Class B common share will have one vote on the approval of the combination.
The Class B common shares will not vote on any other matter to be presented
at the meeting.
Smucker's directors, executive officers, and members of the Smucker family
have indicated that they intend to vote their Smucker shares FOR the
combination. As of May 11, 2000, these directors, executive officers, and
family members were entitled to vote approximately 3,584,114 Class A common
shares, or approximately 25% of the outstanding Class A common shares,
representing, in the aggregate, approximately 44% -- 51% of the voting power
of the Class A common shares.
As of May 11, 2000, Smucker's directors, executive officers, and members of
the Smucker family were entitled to vote approximately 3,081,104 Class B
common shares, or approximately 22% of the outstanding Class B common
shares.
Q: WHAT WILL I RECEIVE IN THE COMBINATION IF IT IS APPROVED?
A: In exchange for each Class A and Class B common share that you own, you will
have the right to receive, subject to the limitations described below:
- $18.50 in cash; or
- one new Smucker common share.
We will not pay more than $100 million in cash in the aggregate to our
shareholders in connection with the combination, and will pay that cash to
our shareholders only if the combination is approved. If our shareholders
elect to receive cash in an aggregate amount that exceeds $100 million, the
available cash will be divided equally among all shares that have elected to
receive cash. See "The Combination -- Adjustment of Amount of Cash Received"
beginning at page 25. Each Class A and Class B common share that is not
converted into cash will be converted into one new Smucker common share.
Q: HOW DO I TELL SMUCKER WHETHER I WANT NEW SHARES OR CASH?
A: An election form is enclosed. In order to receive cash, you must complete,
sign, and return the election form as directed on the form. If you fail to
submit an election form within the deadline stated on the form, you will be
deemed to have indicated that you wish to receive new Smucker common shares.
It is possible that you will not receive cash in exchange for all of the
shares for which you have made a cash election due to the limitations on the
payment of cash discussed in the previous answer.
All of our directors and executive officers, including Tim Smucker, our
Chairman, and Richard Smucker, our President, have indicated that they will
convert all of the Class A and Class B common shares that they own or
control into new Smucker common shares in the combination.
Q: WILL I HAVE ANY DISSENTERS' RIGHTS IF I DO NOT VOTE IN FAVOR OF THE
COMBINATION?
A: You may be entitled to statutory dissenters' rights if you do not vote in
favor of the combination. You must follow the procedures described in this
document to assert your dissenters' rights. See "The Combination --
Dissenters' Rights" beginning on page 27.
2
<PAGE> 8
Q: WHAT ARE THE INCOME TAX CONSEQUENCES TO ME RESULTING FROM THE COMBINATION?
A: The conversion of your Class A or Class B common shares into new Smucker
common shares will be a tax free event to you under the federal income tax
laws.
If you elect to receive cash for some or all of your Class A or Class B
common shares, you will generally recognize, subject to appropriate holding
periods, a capital gain or loss equal to the difference between the amount
of cash received and your basis in the Class A or Class B common shares.
We encourage you to consult your own tax advisor regarding the tax
consequences of the combination to you based on your particular
circumstances. See the discussion of material federal income tax
consequences beginning on page 21.
Q: HOW WILL MY RIGHTS AS A SHAREHOLDER DIFFER AFTER THE COMBINATION?
A: After the combination occurs, your rights as a holder of new Smucker common
shares will be governed by the articles of incorporation and regulations
attached to this document as Annexes D and E, rather than Smucker's current
articles of incorporation and regulations. The differences between the
current Smucker's articles of incorporation and regulations and the articles
of incorporation and regulations that will govern Smucker following the
combination are described beginning on page 37 of this document.
Generally, however, Class A shareholders will have the same rights as they
did before the combination and Class B shareholders will have the right to
one vote for each new common share received, with the possibility of ten
votes per share if they hold the shares for four years from the effective
date of the combination. These rights are essentially the same as the
current rights of the Class A shareholders.
PROCEDURES
Q: WHAT SHOULD I DO NOW?
A: YOU SHOULD MAIL YOUR SIGNED AND DATED PROXY CARD(S) IN THE ENCLOSED ENVELOPE
AS SOON AS POSSIBLE SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE
ANNUAL MEETING.
If you wish to receive cash in the combination for some or all of your
shares, you should also complete the enclosed election form and send in your
share certificates. See the next question.
Q: DO I NEED TO SEND IN MY SHARE CERTIFICATES?
A: IF YOU WISH TO ELECT TO RECEIVE CASH FOR SOME OR ALL OF YOUR CLASS A OR
CLASS B COMMON SHARES, YOU SHOULD SEND IN YOUR SHARE CERTIFICATES WITH THE
ENCLOSED ELECTION FORM. The election form provides detailed instructions
explaining how to elect to receive cash and surrender your certificates.
IF YOU DO NOT WISH TO ELECT TO RECEIVE CASH FOR ANY OF YOUR CLASS A OR CLASS
B COMMON SHARES, YOU SHOULD NOT SEND IN YOUR SHARE CERTIFICATES. Your share
certificates representing Class A or Class B common shares will
automatically represent new Smucker common shares following the combination.
There is no need to exchange your share certificates. After the combination
is effective, you will, however, be permitted to exchange your share
certificates for a certificate representing the same number of new Smucker
common shares printed on new certificate paper and without the "Class A" or
"Class B" designation, if you wish.
Q: IF I AM NOT GOING TO ATTEND THE ANNUAL MEETING SHOULD I RETURN MY PROXY
CARD(S)?
A: YES. Returning your proxy card(s) ensures that your shares will be
represented at the annual meeting, even if you are unable or do not want to
attend.
Q: CAN I CHANGE MY VOTE AFTER I MAIL MY PROXY CARD(S)?
A: Yes. You can change your vote by:
- sending a written notice to the Corporate Secretary of Smucker that is
received prior to the annual meeting and stating that you would like to
revoke your proxy;
3
<PAGE> 9
- signing a new proxy card and returning it by mail prior to the annual
meeting; or
- obtaining an admission card, attending the annual meeting, and voting in
person.
Q: WHAT IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER?
A: Your broker will vote your shares with respect to the combination only if
you provide written instructions to your broker on how to vote, so it is
important that you provide your broker with instructions. If you do not
provide your broker with instructions, your shares will not be voted with
respect to the combination and will not count to approve the combination.
Your Class A common shares may, however, be voted in the election of our
directors and ratification of our independent auditors. To ensure that your
broker receives your instructions, we suggest that you send them in the
envelope enclosed with the instructions. If you wish to vote in person at
the meeting, and hold your shares in your broker's name, you must contact
your broker and request a document called a "legal proxy." You must bring
this legal proxy to the meeting in order to vote in person.
Q: WHAT IF I DO NOT VOTE OR DO NOT INSTRUCT MY BROKER TO VOTE MY SHARES?
A: Abstentions and broker non-votes will be counted as votes against the
combination.
Q: WHO CAN ANSWER MY QUESTIONS?
A: If you have questions regarding the annual meeting or need assistance in
voting your shares, please contact our proxy solicitor:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Attn: James Gillis
Telephone: (201) 896-1900
or
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attn: Joan Custer, Office of the Corporate Secretary
Telephone: (330) 682-3000
All other questions should be directed to:
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attn: Joan Custer, Office of the Corporate Secretary
Telephone: (330) 682-3000
II. ADDITIONAL INFORMATION
THE COMPANIES
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667
(330) 682-3000
Smucker, an Ohio corporation, manufacturers and markets food products on a
worldwide basis. Smucker's principal products are fruit spreads, dessert
toppings, peanut butter, industrial fruit products such as bakery and yogurt
fillings, fruit and vegetable juices, juice beverages, syrups, condiments, and
gift packages.
4
<PAGE> 10
JMS-Ohio, Inc.
Strawberry Lane
Orrville, Ohio 44667
(330) 682-3000
JMS-Ohio, a wholly owned subsidiary of Smucker, is an Ohio corporation
newly formed for the sole purpose of implementing the combination. JMS-Ohio has
not conducted any business since its formation. At the time of the combination,
JMS-Ohio will merge into Smucker and cease to exist.
THE COMBINATION (PAGE 24)
After the combination of Smucker's Class A and Class B common shares,
Smucker will continue its current businesses in the same manner as before under
The J. M. Smucker Company name, and will retain its current brand names.
After the combination, Smucker will have only one class of common shares
outstanding, all of which will be owned by our existing shareholders, other than
those that exercise statutory dissenters' rights or sell their shares to Smucker
for cash. Assuming we repurchase the full $100 million of common shares in the
combination, approximately 80% of our outstanding shares will remain outstanding
following the combination. The new common shares will be voting shares, and we
will retain our current time-phased voting plan. The new Smucker common shares
will be listed on the New York Stock Exchange.
Immediately following the combination, new Smucker common shares issued
upon the conversion of Class A common shares will be entitled to the same number
of votes per share to which those shares were entitled before the combination.
New Smucker common shares issued upon the conversion of Class B common shares
will also participate in the time-phased voting plan, and will be entitled to
one vote per share until held for four years after the effective date of the
combination, at which time they will become entitled to ten votes per share.
We encourage you to read the agreement that governs the combination, which
is attached as Annex A to this document, because it sets forth the terms of the
combination.
CONDITIONS TO THE COMBINATION (PAGE 25)
A number of conditions must be met or waived before the combination will be
completed. The most significant conditions are that:
- we receive the required shareholder approval;
- no more than 10% of the 28,325,280 outstanding Class A and Class B common
shares, in the aggregate, assert statutory dissenters' rights;
- the registration statement we have filed with the Securities and Exchange
Commission in connection with the issuance of the new common shares after
the combination becomes effective;
- the New York Stock Exchange approves our listing of the new Smucker
common shares; and
- we receive antitrust regulatory approval and the expiration of any
applicable waiting periods.
We may also defer, terminate, or abandon the combination if we determine
that it would be in our shareholders' or Smucker's best interests.
5
<PAGE> 11
REGULATORY APPROVALS (PAGE 27)
To complete the combination:
- we must file a certificate of merger with the Secretary of State of Ohio;
and
- we and our largest shareholders may be required to make filings with or
obtain approvals from U.S. antitrust regulatory authorities including the
U.S. Federal Trade Commission and the Department of Justice.
We do not need to comply with any other federal or state regulatory requirements
or obtain any other regulatory approvals in order to effect the combination.
COMPARATIVE RIGHTS OF SHAREHOLDERS (PAGE 37)
The articles of incorporation and regulations that will govern Smucker
after the combination reflect some changes from Smucker's current articles and
regulations. The difference between the current Smucker's articles and
regulations and the articles of incorporation and regulations that will govern
Smucker following the combination are described beginning on page 37 of this
document.
FAIRNESS OPINION OF WILLIAM BLAIR & COMPANY (PAGE 15)
In deciding to approve the combination of Class A and Class B common
shares, your board of directors considered an opinion from its financial
advisor, William Blair & Company, as to the fairness, from a financial point of
view, to the holders of our Class A and Class B common share, of the conversion
of each voting Class A and non-voting Class B common share into one share of a
new class of voting common shares. The opinion is attached as Annex C to this
document. We encourage you to read the opinion in its entirety.
INTERESTS OF MEMBERS OF THE SMUCKER FAMILY IN THE COMBINATION (PAGE 39)
When considering the recommendation of Smucker's board of directors, you
should be aware that shareholders that are members of the Smucker family,
including Tim Smucker, our Chairman, and Richard Smucker, our President, have
interests in the combination that may be different from your interests as a
shareholder. For example:
- It is likely that the Smucker family members' ownership of Smucker common
shares, as a percentage of the outstanding common shares, will increase
from approximately % to approximately % as a result of the
combination.
- It is likely that, through the conversion of their existing, non-voting
Class B common shares into voting shares and the continued retention of
those shares, the voting power of members of the Smucker family will
increase as a result of the combination.
- It is likely that the voting power of members of the Smucker family will
increase after the fourth anniversary of the combination.
LISTING OF NEW COMMON SHARES (PAGE 35)
The new Smucker common shares to be issued in the combination will be
listed on the New York Stock Exchange under the symbol "SJM."
6
<PAGE> 12
MARKET PRICES AND DIVIDENDS
Our Class A and Class B common shares are currently listed on the New York
Stock Exchange under the symbols SJM.A and SJM.B, respectively. The following
table sets forth the high and low sales prices for our Class A and Class B
common shares as reported by the New York Stock Exchange Composite Tape and the
dividends paid per share for each quarter during our 1999 and 2000 fiscal years.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON SHARES DIVIDENDS COMMON SHARES DIVIDENDS
---------------- PAID PER CLASS A ---------------- PAID PER CLASS B
HIGH LOW COMMON SHARE HIGH LOW COMMON SHARE
------ ------ ---------------- ------ ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
1999
First Quarter........... $25.56 $22.75 $0.14 $25.50 $22.63 $0.14
Second Quarter.......... 24.69 20.63 0.14 24.19 20.06 0.14
Third Quarter........... 25.69 21.88 0.14 24.00 20.58 0.14
Fourth Quarter.......... 24.75 20.50 0.15 22.63 17.50 0.15
2000
First Quarter........... $25.75 $20.06 $0.15 $22.50 $17.13 $0.15
Second Quarter.......... 24.19 19.50 0.15 21.31 16.25 0.15
Third Quarter........... 21.38 17.00 0.15 17.88 16.25 0.15
Fourth Quarter.......... 18.50 15.00 0.16 16.00 12.50 0.16
</TABLE>
The last reported sale price of Class A common shares as reported by the
New York Stock Exchange Composite Tape on May 15, 2000, the last trading day
immediately prior to the public announcement of the proposed combination, was
$16.69 per share. The last reported sale price of Class B common shares as
reported by the New York Stock Exchange Composite Tape on May 15, 2000, the last
trading day immediately prior to the public announcement of the proposed
combination, was $14.25 per share.
7
<PAGE> 13
SELECTED HISTORICAL FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth selected summary consolidated financial data
of Smucker as of and for each of the periods indicated. We derived the
consolidated financial data for each of the periods presented from Smucker's
audited consolidated financial statements and unaudited quarterly financial
statements. This information is only a summary and you should it read it in
conjunction with the historical consolidated financial statements, and the
related schedule and notes, contained in our annual report on Form 10-K and Form
10-Q and other information that we have filed with the Securities and Exchange
Commission. See "Where You Can Find More Information" beginning on page 56.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JANUARY 31, YEAR ENDED APRIL 30,
-------------------- --------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME:
Net sales......................... $475,888 $446,166 $602,457 $565,476 $524,107 $517,832 $503,618
Income from continuing operations
before cumulative effect of
change in accounting method..... 25,389 27,724 37,763 36,348 30,935 29,453 32,461
Income (Loss) from discontinued
operations (1).................. -- -- -- -- -- (140) 3,842
Cumulative effect of change in
accounting method (2)........... -- -- -- (2,958) -- -- --
Net income........................ 25,389 27,724 37,763 33,390 30,935 29,313 36,303
FINANCIAL POSITION:
Long-term debt.................... 75,000 -- -- -- -- 60,800 67,100
Total assets...................... 488,136 434,108 433,883 407,973 384,773 424,952 405,995
OTHER DATA:
EARNINGS PER COMMON SHARE:
Income from continuing operations
before cumulative effect of
change in accounting method..... .88 .95 1.30 1.25 1.06 1.01 1.12
Income from discontinued
operations (1).................. -- -- -- -- -- -- 0.13
Cumulative effect of change in
accounting method (2)........... -- -- -- (.10) -- -- --
Net income........................ .88 .95 1.30 1.15 1.06 1.01 1.25
Income from continuing operations
before cumulative effect of
change in accounting
method -- assuming dilution..... .88 .95 1.29 1.24 1.06 1.00 1.11
Income from discontinued
operations -- assuming dilution
(1)............................. -- -- -- -- -- -- 0.13
Cumulative effect of change in
accounting method -- assuming
dilution (2).................... -- -- -- (.10) -- -- --
Net income -- assuming dilution... .88 .95 1.29 1.14 1.06 1.00 1.24
CASH DIVIDENDS DECLARED PER COMMON
SHARE:
Class A........................... .45 .42 .57 .53 .52 .52 .505
Class B........................... .45 .42 .57 .53 .52 .52 .505
</TABLE>
- ---------------
(1) Represents the impact of Mrs. Smith's discontinued operation.
(2) Reflects, in 1998, the cumulative effect of adopting the provisions of the
Emerging Issues Task Force of the Financial Accounting Standards Board
consensus ruling No. 97-13, Accounting for Costs Incurred in Connection with
a Consulting Contract that Combines Business Process Reengineering and
Information Technology Transformation.
8
<PAGE> 14
COMPARATIVE PER SHARE DATA
The following table sets forth net income, cash dividends, and book values
per share of our common shares on a historical basis. The table should be read
in conjunction with the selected historical financial data and historical
consolidated financial statements, and related schedules and notes thereto,
included, or incorporated by reference, in this document.
<TABLE>
<S> <C>
NINE MONTHS ENDED JANUARY 31, 2000
Net income per common share............................... $ .88
Net income per common share -- assuming dilution.......... .88
Cash dividends declared per common share.................. .45
Book value per common share at January 31, 2000. ......... 11.30
FISCAL YEAR ENDED APRIL 30, 1999
Net income per common share............................... $ 1.30
Net income per common share -- assuming dilution.......... 1.29
Cash dividends declared per common share.................. .57
Book value per common share at April 30, 1999............. 11.12
NINE MONTHS ENDED JANUARY 31, 1999
Net income per common share............................... $ .95
Net income per common share -- assuming dilution.......... .95
Cash dividends declared per common share.................. .42
Book value per common share at January 31, 1999........... 10.82
</TABLE>
9
<PAGE> 15
GENERAL INFORMATION
RECORD DATE; VOTING INFORMATION
Smucker's board of directors has fixed the close of business on July 3,
2000 as the record date for the determination of shareholders entitled to notice
of and entitled to vote at the annual meeting of shareholders to be held on
August 15, 2000. As of the record date, we had outstanding and entitled to vote
at the meeting 14,259,429 Class A common shares, and 14,065,851 Class B common
shares.
Our articles of incorporation provide generally that each Class A common
share may entitle the holder to ten votes on each matter to be considered at the
meeting. If, though, there has been a change in beneficial ownership of a Class
A common share during the four years immediately preceding the record date, the
current owner of that share will be entitled to only one vote with respect to
that share until four years pass without a change in beneficial ownership of the
share. Based on the information with respect to beneficial ownership we possess
on the date of this document, the holders of between and Class A
common shares will be entitled to exercise ten votes per share at the meeting,
and the holders of the remainder of the outstanding Class A common shares will
be entitled to exercise one vote per share. The actual voting power of each
holder of Class A common shares will be based on information we possess at the
time of the meeting.
Currently, holders of Class B common shares are not entitled to vote except
in limited circumstances set forth in Ohio law. These circumstances include
approval of the combination of our Class A and Class B common shares to be voted
upon at the annual meeting. Each Class B common share outstanding as of the
record date is entitled to one vote on the combination. Holders of Class B
common shares are not entitled to vote on any other matter to be considered at
the annual meeting.
For a more detailed explanation of the voting rights of the Class A and
Class B common shares, see "Voting Rights of Common Shares" beginning on page
55.
At the annual meeting, the inspector of elections will tabulate the results
of shareholder voting. The combination must be approved by the holders of at
least two-thirds of the voting power of outstanding Class A common shares,
giving effect to ten-vote shares, voting as a class, and two-thirds of the
outstanding Class B common shares, voting as a class with one vote per share.
In the election of directors, the candidates receiving the greatest number
of votes of the holders of the outstanding Class A common shares will be
elected. The affirmative vote of the holders of at least a majority of the
voting power of the Class A common shares represented at the meeting is required
to ratify the appointment of the independent auditors.
The presence in person or by proxy at the annual meeting of the holders of:
- shares entitled to exercise at least a majority of the outstanding voting
power of the Class A common shares, giving effect to ten-vote shares, and
- a majority of the outstanding Class B common shares,
constitutes a quorum for the annual meeting. Properly signed proxies that are
marked "abstain" or are held in "street name" by brokers and not voted on one or
more of the items before the annual meeting are known as "broker non-votes," and
will, if otherwise voted on at least one item, be counted for the purposes of
determining whether a quorum has been achieved at the annual meeting.
Abstentions and broker non-votes will have the effect of a vote AGAINST the
combination of the Class A common shares and Class B common shares and the
ratification of the appointment of the independent auditors. Votes withheld in
respect of any candidate in the election of directors will have no impact on the
election.
Smucker's directors, executive officers, and members of the Smucker family
have indicated that they intend to vote their Smucker shares FOR the combination
and will convert all of their Class A and Class B common shares into new common
shares in the combination. As of May 11, 2000, these directors, executive
officers, and family members were entitled to vote approximately 3,584,114 Class
A common shares, or
10
<PAGE> 16
approximately 25% of the number of outstanding Class A common shares. Management
estimates that these shares represent between 40% and 51% of the voting power of
the Class A common shares.
As of May 11, 2000, Smucker's directors, executive officers, and members of
the Smucker family were entitled to vote approximately 3,081,104 Class B common
shares, or approximately 22% of the outstanding Class B common shares.
All of Smucker's directors and executive officers, including Tim Smucker,
our Chairman, and Richard Smucker, our President, have indicated that they will
convert all of their Class A and/or Class B common shares into new common shares
in the combination.
VOTING BY PROXY; REVOCATION OF PROXIES
If you sign and return the enclosed proxy card(s), your shares will be
voted as indicated on the card(s). Without affecting any vote previously taken,
you may revoke your proxy by delivering to us a new, later dated proxy with
respect to the same shares, or by giving written notice to us before or at the
annual meeting. Your presence at the annual meeting will not, in and of itself,
revoke your proxy.
CUMULATIVE VOTING
Under Ohio law, all of the Class A common shares may be voted cumulatively
in the election of directors if a shareholder of record wishing to exercise
cumulative voting rights provides written notice of record, to our president or
our secretary not less than 48 hours before the time of the meeting. The notice
must state that the shareholder desires that the voting at the election be
cumulative. Also, an announcement of the giving of the notice must be made when
the meeting is convened by the chairman or the secretary or by or on behalf of
the shareholder giving the notice. Under cumulative voting, the number of votes
to which each shareholder otherwise is entitled is multiplied by the number of
directors to be elected, and the shareholder then may cast that aggregate number
of votes all for one candidate, or may spread them out among the candidates as
the shareholder deems appropriate.
We intend to vote all proxies we solicit whether or not there is cumulative
voting at the meeting. In the event that there is cumulative voting, unless a
shareholder provides contrary instructions on his or her proxy, all votes
represented by proxies will be divided evenly among the nominees named in this
document, unless it appears that voting in that way would not be effective to
elect all of those nominees. In that case, the votes represented by proxies will
be cast at the discretion of the board of directors so as to maximize the number
of nominees elected.
PROXY SOLICITATION INFORMATION
We are furnishing this document to you in connection with the solicitation
by our board of directors of the enclosed form(s) of proxy for our August 15,
2000 annual meeting. In addition to solicitation by mail, we may solicit proxies
in person, by telephone, telecopy, or e-mail. Also, we have engaged a
professional proxy solicitation firm, Corporate Investor Communications, Inc.,
to assist us in soliciting proxies. Smucker will pay to Corporate Investor
Communications a fee of $ , plus expenses, for its services, and will bear
all costs of the proxy solicitation.
11
<PAGE> 17
SPECIAL FACTORS
BACKGROUND OF THE PROPOSED COMBINATION
Smucker adopted its dual, voting and non-voting, class capital structure in
August 1991. The dual class capital structure was implemented to provide
additional flexibility to Smucker while balancing the control and liquidity
concerns of members of the Smucker family. Specifically, the dual class
structure would allow:
- Smucker to issue equity securities in connection with acquisitions and to
raise equity capital or to issue convertible debt or convertible
preferred stock as a means to finance future growth without diluting the
voting power of Smucker shareholders; and
- holders of Smucker common shares to sell or otherwise dispose of common
shares while maintaining their voting positions.
At the time the dual class capital structure was implemented, our board of
directors considered potential disadvantages of the structure, but determined
that the potential benefits that it believed would result from the structure
would outweigh any potential disadvantages.
At various times since adoption of our dual class structure, our management
has discussed the possibility that, in practice, the disadvantages of Smucker's
dual class structure have outweighed potential advantages related to the
structure. Management has noted that Smucker has never used the Class B common
shares in connection with any acquisitions, nor has it sold Class B common
shares or debt or shares convertible into Class B common shares in any public or
private offering in order to raise capital. Given that Smucker's has not enjoyed
the intended benefits of the Class B common shares, it has felt the
disadvantages of the dual class structure more strongly, especially in light of
the prevalence of single class capital structures among publicly held
corporations. The disadvantages of the dual class structure that have been noted
by management include, among others, the following:
- confusion due to the complicated nature of our capital structure, which
may diminish investor interest, analyst coverage, and the size of our
investor base;
- additional administrative expenses; and
- impaired liquidity, trading volume, and trading efficiencies.
In the summer of 1999, our management began informally discussing with
William Blair & Company, L.L.C. the possibility of combining our two classes of
common shares into one class as a means of increasing the trading price of our
common shares and enhancing shareholder value. Discussions of alternative ways
of combining the two classes of common shares continued into December 1999, but
no formal proposal relating to a combination was made to the board of directors
at that time.
In January 2000, management again discussed a number of possible
reclassification or restructuring transactions by which Smucker could enhance
shareholder value, including the possible repurchase of a significant number of
our outstanding common shares and/or the possible combination of our Class A and
Class B common shares into one class of common shares. Our management reviewed
the available transaction alternatives and the relative economic benefits of
those alternatives to Smucker and our shareholders. The transaction alternatives
discussed by our management included the following:
- an increase in our existing open market share repurchase program, which
we implemented in April 1997;
- a self-tender offer for a significant percentage of our Class A and/or
Class B common shares;
- a recapitalization transaction, in which the holders of all Class A and
Class B common shares, other than those held by members of the Smucker
family and some members of management, would exchange their shares for
new Smucker common shares and cash;
- a transaction that would make Smucker a privately held company;
12
<PAGE> 18
- a combination of Smucker's Class A and Class B common shares through an
amendment to Smucker's articles of incorporation that would reclassify
Class A and Class B common shares into shares of a new single class;
- a combination of Smucker's Class A and Class B common shares through a
merger of a newly formed, wholly owned subsidiary of Smucker with and
into Smucker, in which Class A and Class B common shares would be
converted into shares of a new single class of voting common shares;
- a combination of a self-tender offer and either of the combination
transactions described in the previous two bullets; or
- a combination of Smucker's Class A and Class B common shares accomplished
by a cash-election merger, in which Class A and Class B common shares
would be converted into shares of a new single class of voting common
shares, or, at the shareholder's option, cash.
Our management determined that its primary objective was to increase
shareholder value by:
- simplifying our capital structure;
- providing our shareholders with a limited opportunity to cash out some or
all of their Class A and/or Class B common shares without incurring
customary transaction costs such as brokerage fees and commissions; and
- providing economic accretion to our shareholders.
After reviewing the possible transaction alternatives, management decided
that neither a self-tender offer for Class A and/or Class B common shares, nor
an increase in our existing open market share repurchase program, would meet its
objectives in a satisfactory way. Management's view was based on the fact that:
- neither of those transactions, by itself, would eliminate our dual class
capital structure; and
- a tender offer or increased open market repurchase program, without a
combination of the Class A and Class B common shares into a single class,
could adversely affect the liquidity of the Class A and/or Class B common
shares by significantly decreasing the number of shares outstanding.
Management also concluded that a recapitalization transaction would not
best meet its objectives because it would not offer to all Smucker shareholders
the choice to remain a shareholder of Smucker. Management wished to design a
transaction that would provide to all shareholders a choice to remain a
shareholder of Smucker or to convert their shares into cash.
Management determined that a privatization of Smucker would not be in the
best interests of Smucker or its shareholders, particularly in light of the
amount of indebtedness that Smucker would need to incur in order to become a
privately held company. Management also concluded that the elimination of our
dual class structure by an amendment to our articles of incorporation or a
merger, by itself, would also fail to meet management's objectives because it
would not provide to our shareholders an opportunity to sell some or all of
their Smucker shares free of usual transaction costs.
Management determined that a combination of a significant share buyback
with a combination of our Class A and Class B common shares would best meet its
objectives because:
- the combination is a one-step transaction; and
- the combination could be accomplished so that it would be voted upon at
the annual meeting of shareholders, therefore, there was no need for a
special meeting of shareholders and the associated proxy solicitation,
mailing, and other expenses.
13
<PAGE> 19
Our management determined that the proposed combination of Class A and
Class B common shares with a share repurchase option would best serve our
objectives to:
- enhance shareholder value;
- improve liquidity and marketability of our common shares by eliminating
our dual class capital structure;
- provide economic accretion to our shareholders; and
- provide to our shareholders a limited opportunity to receive cash for
some or all of their shares at a premium to pre-announcement trading
prices without incurring usual brokerage fees or commissions.
In April 2000, the board of directors formally engaged William Blair as its
financial advisor to analyze transactions that would combine a significant share
buyback with a combination of our Class A and Class B common shares. At the
regular meeting of our board of directors held on April 18, 2000, our
management, together with our legal and financial advisors, presented for
consideration the proposed combination of our Class A and Class B common shares
pursuant to a cash-election merger. At that meeting, William Blair gave a
presentation that described the financial impact of the proposed cash-election
merger and identified reasons for and against proceeding with the proposed
transaction. Based on the presentations and the advice of William Blair, our
directors determined that they would continue their consideration of the
proposed combination at a special meeting to be held on May 2, 2000.
At the May 2 meeting, William Blair delivered its oral opinion to the
directors, which was subsequently confirmed in writing, that the conversion of
each Class A common share and each Class B common share into one share of a new
single class of Smucker common shares was fair, from a financial point of view,
to holders of Class A common shares and Class B common shares. Based on the
advice of William Blair, our board of directors determined that it was in the
best interests of our shareholders as a whole if each issued Class A common
share and each issued Class B common share was converted into either one new
Smucker common share or a cash amount in the combination.
At that meeting, our directors determined that the proposed combination was
in the best interests of our company and our shareholders and formally approved
the combination and related merger by the unanimous vote of the directors
present at the meeting that are neither members of the Smucker family nor
Smucker employees, voting separately, and by the unanimous vote of the directors
present at the meeting. Charles S. Mechem, Jr., the only director not in
attendance at the May 2 meeting, advised our Chairman that he fully supports the
proposed combination and would have voted to approve the combination and related
merger had he been present at the May 2 meeting.
The directors present at the May 2 meeting also unanimously recommended
that the combination be submitted to a vote of our shareholders. Thereafter, a
preliminary version of this proxy statement/prospectus was prepared by our
management and filed with the Securities and Exchange Commission.
RECOMMENDATION OF THE SMUCKER BOARD; REASONS FOR THE COMBINATION
Your board of directors has determined that the benefits of the combination
outweigh any disadvantages that may result from the combination, and recommends
that you vote FOR the proposed combination. Approval of the combination and
merger is not conditioned upon the favorable vote of a majority of our
unaffiliate shareholders. Rather, the combination requires the approval of:
- at least two-thirds of the voting power of the Class A common shares,
giving effect to ten-vote shares, voting as a class; and
- at least two-thirds of the Class B common shares, voting as a class at
one vote per share.
The combination has been unanimously approved by the directors of Smucker,
including the independent directors of Smucker that are not Smucker employees.
The board of directors, being composed of a majority of independent directors,
did not believe it necessary to, and it did not, form a special committee in
connection with its consideration of the combination. Smucker's board of
directors reasonably believes that
14
<PAGE> 20
the combination is fair to all Smucker shareholders, including those that are
not members of the Smucker family or members of Smucker management.
In determining whether to approve the combination and related merger, our
directors considered a number of factors, including the following:
- the elimination of potential investor confusion caused by our dual class
structure;
- simplification of our capital structure, which may generate increased
investor interest, expanded analyst coverage, and a larger investor base;
- the elimination of additional administrative expenses caused by our dual
class structure;
- a potential increase in liquidity, trading volume, and trading
efficiencies that may result from the combination of our Class A and
Class B common shares into one class;
- increased efficiency and flexibility in raising capital and issuing
additional shares if, when, and to the extent desired by Smucker; and
- the elimination of perceived negative impact on the market price of our
common shares that results from having a dual class structure.
Your board of directors also considered the following factors relating to
the combination:
- the opinion of William Blair that the conversion of each Class A common
share and each Class B common share into one new Smucker common share in
the combination is fair, from a financial point of view, to holders of
both our Class A and Class B common shares;
- the current and historical trading prices and volumes of the Class A
common shares compared to the current and historical trading prices and
volumes of the Class B common shares in relation to the conversion of
each Class A common share and each Class B common share into one new
common share;
- the trading price differentials between two classes of stock of other
similarly situated companies; and
- the conversion ratios utilized by other companies that combined two
classes of stock into a single class.
Your board of directors also considered that the combination would reduce
the relative voting power of some holders of the Class A common shares as a
result of the conversion of currently non-voting Class B common shares into new
voting shares in the combination.
This discussion of information and factors considered by our board of
directors is not intended to be exhaustive, but includes all material factors
considered by our board of directors in approving the proposed combination. Our
board of directors did not assign relative weights to the specific factors it
considered in reaching its decision to approve the combination. In considering
the factors described above, individual directors may have given different
weight to different factors. Our board of directors relied on the experience and
expertise of its financial advisors for quantitative analysis of the conversion
ratio for the combination. See "Opinion of Smucker's Financial Advisor"
beginning on page 15.
OPINION OF SMUCKER'S FINANCIAL ADVISOR
William Blair has acted as financial advisor to Smucker and its board of
directors in connection with their examination of the fairness, from a financial
point of view, to the holders of all outstanding Smucker Class A common shares
and Class B common shares of the conversion of each voting Class A and non-
voting Class B common share into one share of a new class of Smucker voting
common shares.
William Blair was retained by the board of directors:
- to render investment banking services in connection with a possible share
repurchase by Smucker of Class A and/or Class B common shares;
15
<PAGE> 21
- to advise Smucker and its board of directors on the combination of the
Class A and Class B common shares into a new class of Smucker common
shares, whether by a reclassification, conversion, reversion,
redesignation, exchange offer, merger, or another transaction; and
- to render a written opinion as to the fairness, from a financial point of
view, to the holders of outstanding Smucker Class A and Class B common
shares, of the rate at which each voting Class A and non-voting Class B
common share is converted into one share of a new class of Smucker voting
common shares.
Smucker hired William Blair based on its qualifications and expertise in
providing financial advice to companies and its reputation as a nationally
recognized investment banking firm. William Blair will be paid a fee of $100,000
for the issuance of its opinion. This fee was due upon delivery of the written
opinion to the board of directors, and was not conditional on the conclusion
reached by William Blair in its opinion. William Blair also acted as Smucker's
investment banker in connection with the combination, and Smucker will pay to
William Blair a fee for those services. A portion of the fee will be based on
the number of Class A and Class B common shares purchased by Smucker in the
combination. Smucker has also agreed to indemnify William Blair against
potential liabilities arising out of its engagement.
At the request of Smucker's board of directors, William Blair delivered to
the board of directors an analysis of several financial alternatives on April
18, 2000 and its oral fairness opinion on May 2, 2000. The fairness opinion was
subsequently confirmed in writing. The opinion stated that, based upon and
subject to the matters set forth in the opinion, the conversion of each voting
Class A and non-voting Class B common share into one share of a new class of
Smucker voting common shares in the combination was fair, from a financial point
of view, to the holders of all outstanding Smucker Class A and Class B common
shares. The full text of the opinion is attached as Annex C to this document and
describes the assumptions made, matters considered, and limits on the scope of
the review undertaken, by William Blair. You are urged to read the opinion
carefully and in its entirety.
William Blair's opinion addresses only the fairness, from a financial point
of view, to the holders of all outstanding Smucker Class A and Class B common
shares of the conversion of each voting Class A and non-voting Class B common
share into one share of a new class of Smucker voting common shares. The opinion
does not address the merits of the underlying decision by Smucker to approve the
proposed combination and does not constitute a recommendation to any shareholder
as to how he or she should vote with respect to the proposed combination, or
whether shareholders should elect to receive cash or new Smucker common shares
in the combination.
In rendering its opinion, William Blair assumed and relied, without
assuming any duty of independent verification, upon the accuracy and
completeness of all the information examined by or otherwise reviewed by it for
purposes of its opinion. William Blair did not make or obtain an independent
valuation or appraisal of Smucker's assets, liabilities, or solvency. Smucker
did not ask William Blair to evaluate, and William Blair's opinion does not
address, the relative merits of the combination as compared to any alternative
capital, capitalization, or other strategy, or the effect of any other similar
transaction in which Smucker might engage. William Blair's opinion is based upon
economic, market, financial, and other conditions existing on, and other
information disclosed to William Blair as of, May 2, 2000. William Blair has
assumed that the combination will be consummated on the terms described in the
agreement attached as Annex A to this document, without any waiver by Smucker or
JMS-Ohio of any material terms or conditions. William Blair notes that although
members of the Smucker family and related trusts own shares that may control a
majority of the outstanding voting power of the Class A common shares, the
agreement governing the combination includes a condition precedent to the
completion of the combination requiring the affirmative votes of two-thirds of
each of the Class A and Class B common shares.
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<PAGE> 22
William Blair does not express any opinion as to the price at which the
Class A common shares, Class B common shares, or the new Smucker common shares
to be issued in the combination will trade at any future time. Those trading
prices may be affected by a number of factors, including:
- dispositions of the new Smucker common shares within a short period of
time after the completion of the combination;
- changes in prevailing interest rates and other factors which generally
influence the price of securities;
- adverse changes in the capital markets;
- the occurrence of adverse changes in the financial condition, business,
assets, results of operations, or prospects of Smucker or the food
industry;
- any necessary actions by or restrictions of federal, state, or other
governmental agencies or regulatory authorities;
- the number of Class A and Class B common shares purchased by Smucker in
the combination, and the price paid for those shares; and
- completion of the combination on the terms and conditions described in
this document and the Annexes.
William Blair was not retained to, and it did not, express an opinion as to the
adequacy of the cash consideration to be paid by Smucker in the combination.
In connection with its review of the proposed combination and in the
preparation of its opinion, William Blair reviewed and analyzed:
- the merger agreement;
- the audited historical financial statements of Smucker for the five years
ended April 30, 1999;
- the unaudited condensed financial statements of Smucker for the nine
months ended January 31, 2000;
- the pro forma impact of the combination on the earnings per share of
Smucker;
- current and historical market prices and trading volumes of the Class A
common shares and Class B common shares;
- the relative rights and preferences of the Class A and Class B common
shares;
- the articles of incorporation and regulations of Smucker, as well as the
articles of incorporation and regulations attached to this document as
Annexes D and E, which will govern Smucker following the combination;
- the current and historical market prices of the capital stock of other
companies that have two classes of publicly traded stock and that it
believed were comparable to Smucker's situation;
- the terms and conditions of transactions that it deemed relevant, in
which two classes of capital stock of public companies were converted,
exchanged, reclassified or otherwise reverted into a single class of
capital stock;
- information provided to William Blair by Smucker regarding the rights and
preferences of the Class A and Class B common shares and certain related
legal matters; and
- other publicly available information relating to Smucker.
William Blair also met with members of the senior management of Smucker to
discuss the items listed above, and met with the board of directors and
Smucker's legal counsel to discuss Smucker, the proposed combination, and the
results of its analyses and examination. William Blair has also considered other
matters which it deemed relevant to its inquiry, and has taken into account the
accepted financial and investment banking procedures and considerations that it
deemed relevant. Smucker's senior management advised
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<PAGE> 23
William Blair that change of control transaction was being, or was expected to
be, considered. Accordingly, William Blair did not evaluate the fairness, from a
financial point of view, of the proposed combination in the context of a change
of control of Smucker.
William Blair performed the financial analyses described below, and
reviewed with Smucker's management and board of directors the assumptions upon
which its analyses were based, as well as other factors. The summary set forth
below is not a complete description of the analyses performed or factors
considered by William Blair.
Summaries of Analyses. In connection with its opinion, William Blair
reviewed and analyzed:
- historical reclassification transactions;
- dual class, publicly traded companies;
- the historical trading activity of Smucker's common shares;
- the potential earnings dilution of Smucker's common shares from the
conversion; and
- the rights and preferences of Smucker's common shares.
Analysis of Historical Reclassification Transactions. William Blair
identified and analyzed 31 reclassification transactions occurring among
publicly traded companies in 1992 to 2000. In each reclassification transaction,
two classes of stock of a single company were reclassified as, and converted
into, a single class of common stock. For each of the companies identified for
the analysis, William Blair examined the number of new shares received in the
reclassification for each share of the stock that had more votes per share and
the number of new shares received in the reclassification for each share of the
stock that had fewer (or no) votes per share.
Of the 31 transactions examined, 12 were transactions by companies with
market capitalizations greater than $100 million. Eight of these 12 transactions
used a one-for-one or 1.00 exchange ratio or converted at a rate of one new
share for each share converted. Of the remaining four companies, two companies
converted their shares or used exchange ratios of 1.00 and special one-time
dividends; and the remaining two used exchange ratios of 1.15 and 1.04. William
Blair then examined the historical trading prices of the publicly traded shares
of each of the companies completing a reclassification to determine the trading
spread, the percentage by which the price per share of the company's higher
voting stock exceeded the price per share of the company's lower voting stock on
an absolute value basis. Of the 12 selected reclassification transactions
examined in detail, the daily trading spreads between the higher and lower
voting common stock in the one year prior to announcement of a transaction
ranged between 0.0% and 25.0%. The average daily trading spread between the
higher and lower voting common stock in the 12 selected companies averaged 5.0%.
Analysis of Dual Class Publicly Traded Companies. William Blair identified
and analyzed a group of companies that had two classes of publicly traded common
stock with different voting rights. Based upon a search of companies listed on
the New York Stock Exchange, the American Stock Exchange, the Nasdaq, and OTC
traded companies, an initial group of over 90 companies was identified. William
Blair analyzed transactions involving 61 of those 90 companies with market
capitalizations between $50 million and $5 billion. The trading spread between
the dual class shares of those companies over the past year ranged between 0.6%
and 35.9%. The average of the average daily trading spreads for the 61 companies
over the last 12 months was 9.0%, and the median of the median daily trading
spreads over the last 12 months was 4.8%.
Analysis of the Historical Trading Activity of Smucker's Common
Shares. William Blair reviewed and analyzed the historical trading activity of
Smucker's Class A and Class B common shares. This analysis included an
examination of the average trading spread between the Class A and Class B common
shares. Based on daily closing prices over the 12 months ended April 27, 2000,
the trading spread between the Class A and Class B common shares averaged 18.2%.
For those 12 months, the average daily trading volumes of the Class A and Class
B common shares as reported by the New York Stock Exchange were approximately
19,000 shares each.
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<PAGE> 24
Potential Earnings Dilution Analysis. William Blair performed an analysis
of potential dilution to earnings per share of Smucker if the combination of
Class A and Class B common shares were to occur at an exchange ratio greater or
lesser than 1.00. There would be no dilution to earnings per share if the
conversion were to occur on a one-to-one ratio.
Review of Terms of Class A Common Shares and Class B Common
Shares. William Blair reviewed the rights and preferences of the Class A and
Class B common shares to assess whether there is economic justification for a
difference in value for shares of the two classes. According to Smucker's
current articles of incorporation, the only difference in the terms of the two
classes relates to voting rights.
Conclusion. The foregoing description is only a summary of the material
aspects of the financial analyses used by William Blair in connection with
rendering its opinion. The preparation of a fairness opinion is a complex
process and is not necessarily susceptible to partial analysis or summary
description. Selecting portions of the analyses or of the summary set forth
above, without considering the analyses as a whole, could create an incomplete
view of the processes underlying William Blair's opinion.
In arriving at its opinion, William Blair considered the results of all
these analyses. The analyses were prepared solely for the purposes of William
Blair providing its opinion as to the fairness, from a financial point of view,
to the holders of all outstanding Smucker Class A and Class B common shares of
the conversion of each voting Class A and non-voting Class B common share into
one share of a new class of voting common shares, and do not purport to be
appraisals or necessarily reflect the prices at which securities actually may be
sold. Any analysis of the fairness, from a financial point of view, to the
shareholders of Smucker, involves complex considerations and judgments. William
Blair's opinion and the related presentation to Smucker's board on May 2, 2000,
was one of many factors taken into consideration by Smucker's board of directors
in approving the combination.
William Blair's opinion is for the use and benefit of Smucker's board of
directors in its consideration of the proposed combination. William Blair was
not requested to opine as to, and its opinion does not in any manner address,
Smucker's underlying business decision to proceed with or effect the
transaction, or the relative merits of the transaction as compared to any
alternative business strategies which might exist for Smucker or the effect of
any other transaction in which Smucker might engage.
In the ordinary course of its business, William Blair may from time to time
trade securities of Smucker for its own account and for the accounts of its
customers, and accordingly may at any time hold a long or short position in such
securities. In the past, William Blair has provided certain investment banking
and financial advisory services to Smucker and has received customary
compensation. In April 1999, William Blair provided investment banking and
financial advisory services to Smucker in connection with Smucker's adoption of
its shareholder rights plan. William Blair received a fee of $25,000 for those
services.
EFFECTS OF THE COMBINATION
Business and Operations; Officers and Directors. Smucker expects that the
combination will have no impact on its operations. Following the combination,
Smucker will continue its current businesses under The J. M. Smucker Company
name and retain its current brand names. The Smucker board of directors and
executive officers at the effective time of the combination, including the board
members who are elected at the annual meeting, will remain in office following
the combination. We have included pro forma consolidated financial statements
elsewhere in this document to reflect the material changes in our consolidated
financial statements following completion of the combination.
Number of Outstanding Common Shares. After the combination, Smucker will
have only one class of common shares outstanding, all of which will be voting
shares. The combination will not increase the total number of authorized Smucker
common shares. If shareholders elect to receive cash for their Class A or Class
B common shares, the combination will decrease the total number of Smucker
common shares outstanding. Immediately prior to the combination, approximately
14,259,429 Class A common shares and 14,065,851 Class B common shares were
issued and outstanding, or a total of 28,325,280 shares. If the maximum number
of shares elect to receive cash in the combination, then, following the
combination,
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<PAGE> 25
22,919,875 new Smucker common shares will be issued and outstanding. Following
the combination, Smucker's Class A and Class B common shares will no longer be
listed on the New York Stock Exchange or registered under the Exchange Act. The
new Smucker common shares will be listed on the New York Stock Exchange and
registered under the Exchange Act.
Effect on Relative Ownership Interest. The relative ownership interest of
holders of Class A or Class B common shares that do not elect to receive cash in
the combination will increase following the combination, assuming that other
shareholders elect to receive cash in the combination. The increase in relative
ownership interest will depend on the number of shares whose holders elect to
receive cash in the combination.
Our directors and executive officers and members of the Smucker family
together own approximately 25% of the outstanding Class A common shares and 22%
of the outstanding Class B common shares, or 24% of the outstanding Smucker
common shares, taken as a whole. These individuals have indicated that they will
convert all of their Class A and Class B common shares into new common shares in
the combination. If shareholders elect to receive the full $100 million in cash
in the combination, then, following the combination, the ownership of the
Smucker common shares, as a percentage of the outstanding Smucker common shares,
by our directors, executive officers and members of the Smucker family will
increase. If the maximum number of shares elect to receive cash in the
combination and none of our directors, executive officers or members of the
Smucker family make such an election, then, following the combination, our
directors and executive officers and members of the Smucker family would
together own approximately 27% of the outstanding common shares immediately
following the combination.
Effect on Voting Power. In the combination, Class B common shares, which
are currently non-voting, will be converted into new Smucker common shares,
which will initially have one vote per share. Following the combination, new
Smucker common shares issued upon conversion of Class A common shares will have
the same number of votes per share as they were entitled before the combination.
An example of the change in voting powers that would occur in the
combination is set forth below. The example assumes that no change in beneficial
ownership of the common shares occurs during the four years immediately
following the transaction.
<TABLE>
<CAPTION>
VOTES PER SHARE VOTES PER SHARE VOTES PER SHARE
LENGTH OF PRIOR TO THE AFTER THE FOUR YEARS AFTER
CLASS* TIME OWNED COMBINATION COMBINATION THE COMBINATION**
- ------ ---------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
A.............................. H4 years 10 10 10
A.............................. G4 years 1 1 10
B.............................. H4 years 0 1 10
B.............................. G4 years 0 1 10
</TABLE>
- ---------------
* Class A and Class B common shares will become new common shares after the
combination.
** New Smucker common shares issued upon the conversion of Class A common shares
in the combination will obtain ten votes per share on the fourth anniversary
of their original acquisition. New Smucker common shares issued upon the
conversion of Class B common shares will obtain ten votes per share on the
fourth anniversary of the completion of the combination.
Effect on Relative Voting Power. Because the Class B common shares will be
converted into voting shares following the combination, the relative voting
power of each holder of Class B common shares that does not sell his or her
shares to Smucker in the combination will increase, and the relative voting
power of each holder of Class A common shares, as such, will decrease. The
impact on the voting power of any particular shareholder will depend on:
- the number of Class A common shares and Class B common shares held by
that shareholder;
- whether the Class A common shares held by the shareholder are ten-vote
shares or one-vote shares under Smucker's time-phased voting plan; and
- whether the shareholder elects to receive any cash in the combination.
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<PAGE> 26
Our management estimates that immediately following the combination, the voting
power of our directors and executive officers and members of the Smucker family,
in the aggregate, may increase slightly. Immediately following the combination,
our directors and executive officers and members of this group will together
control between 41% and 45% of the voting power of Smucker. This compares to
between 40% and 51% prior to the combination.
The new Smucker common shares issued upon conversion of the Class B common
shares in the combination will participate in Smucker's time-phased voting plan.
Therefore, it is possible that these shares will eventually become ten-vote
shares. It is likely that members of the Smucker family will retain their shares
for and after the expiration of the four-year holding period necessary for the
shares to become ten-vote shares. Therefore, management estimates that after the
fourth anniversary of the closing of the combination, assuming that the members
of the Smucker family retain all of their Smucker common shares and all other
current holders of Class B common shares transfer beneficial ownership of their
new common shares prior to that fourth anniversary to persons other than members
of the Smucker family, members of the Smucker family, in the aggregate, could
control up to a maximum of % of the voting power of Smucker.
FINANCING OF THE COMBINATION
We currently anticipate that we will use a combination of existing cash and
borrowed funds to finance the stock repurchase portion of the combination. We
currently anticipate that funds will be borrowed from institutional lenders that
will provide senior unsecured long-term debt on an equal basis with Smucker's
Series 1999 Notes.
As of the date of this document, we have not obtained loan commitments from
any lenders or made any arrangements with respect to funds to be borrowed in
connection with the combination. If we cannot make arrangements with our
existing lenders on terms satisfactory to us, we will develop an alternative
financing plan.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of material U.S. federal income tax consequences
of the exchange of Class A and/or Class B common shares for new Smucker common
shares and/or cash in the merger. This discussion assumes that the Class A and
Class B common shares are held as a "capital asset" within the meaning of
Section 1221 of the Internal Revenue Code. This discussion does not address all
aspects of U.S. federal taxation that may be relevant to particular shareholders
in light of their personal circumstances or to shareholders subject to special
treatment under the Internal Revenue Code, including:
- financial institutions or trusts;
- tax-exempt entities;
- insurance companies;
- traders that mark to market;
- dealers in securities or foreign currency;
- shareholders who received their shares through the exercise of employee
stock options or otherwise as compensation;
- shareholders who are foreign corporations, foreign partnerships, or other
foreign entities, or individuals who are not citizens or residents of the
U.S.; and
- shareholders who hold shares as a part of a hedge, straddle, or
conversion transaction.
Smucker has not requested, and will not request, a ruling from the Internal
Revenue Service on the U.S. federal income tax consequences of the combination
and, as a result, there can be no assurance that the Internal Revenue Service
will not challenge any of the conclusions expressed below. In addition, tax
consequences to each exchanging shareholder will depend in part on the
Shareholder's particular
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<PAGE> 27
circumstances. This discussion is for general information only and is based on
the U.S. Internal Revenue Code, Treasury regulations, published administrative
rulings, and judicial decisions, all as in effect on the date of this document
and all of which are subject to change, possibly with retroactive effect. This
discussion does not address any state, local, or foreign tax consequences of the
combination. Shareholders should consult with tax advisors as to the particular
tax consequences of the combination, including the applicability and effect of
the alternative minimum tax and any state, local, or foreign income and other
tax laws and of changes in such laws.
Tax Consequences of the Combination. Subject to the following assumptions,
limitations, and qualifications, in the opinion of Jones, Day, Reavis & Pogue,
counsel to Smucker, for U.S. federal income tax purposes:
- a shareholder who exchanges his or her Class A and/or Class B common
shares solely for new Smucker common series will not recognize any gain
or loss; and
- a shareholder who exchanges his or her class A and/or Class B common
shares solely for cash will recognize capital gain or loss equal to the
difference between the amount of cash received and the shareholder's
adjusted tax basis in the shares surrendered, unless, in the case of a
shareholder who is treated as holding new Smucker common shares under the
constructive ownership rules contained in Section 318 of the Internal
Revenue Code, the receipt by that shareholder of cash has the effect of a
dividend.
The opinion of Jones, Day, Reavis & Pogue is based on current law and
assumes that the exchange of Class A and/or Class B common shares will be
effected in the manner described in this document and in accordance with the
agreement attached to this document as Annex A (without amendment). The opinion
is also based on representation letters from each of Smucker and JMS-Ohio
delivered to Jones, Day, Reavis & Pogue. Opinions of counsel are not binding on
the Internal Revenue Service and do not preclude it from adopting contrary
positions. In addition, if any of the representations and assumptions on which
the Jones, Day, Reavis & Pogue opinion is based are inconsistent with the actual
facts, the U.S. federal income tax consequences of the exchange could be
materially different from those described in this section "Material Federal
Income Tax Consequences."
Exchange of Class A and/or Class B Common Shares Solely for New Smucker
Common Shares. A shareholder who exchanges his or her Class A and/or Class B
common shares solely for new Smucker common shares in the merger will not
recognize any gain or loss. Such shareholder will have an aggregate tax basis in
the new Smucker common shares received in the combination equal to the
shareholder's aggregate adjusted tax basis in the Class A and/or Class B common
shares surrendered in the combination, and the holding period for the new
Smucker common shares will include the holding period of the Class A and/or
Class B common shares.
Exchanged of Class A and/or Class B Common Shares Solely for Cash. In
general, a shareholder who exchanges his or her Class A and/or Class B common
shares solely for cash will recognize capital gain or loss equal to the
difference between the amount of cash received and the shareholder's adjusted
tax basis in the shares surrendered. The gain will be long-term capital gain or
loss if, on the date of the exchange, the holding period for those shares is
greater than one year. If, however, a shareholder is treated as owning new
Smucker common shares under the constructive ownership rules contained in
Section 318 of the Internal Revenue Code, some or all of the cash received by
that shareholder may, in certain circumstances, be taxed as a dividend. The
circumstances under which dividend treatment will apply and the consequences of
dividend treatment are discussed below under "Exchange of Class B Common Shares
for New Smucker Common Shares and Cash" and "Exchange of Class A Common Shares
for New Smucker Common Shares and Cash."
Exchange of Class B Common Shares for New Smucker Common Shares and
Cash. If the exchange of Class B common shares for a combination of new Smucker
common shares and cash is treated as made pursuant to a plan of "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code, a
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<PAGE> 28
holder of Class B common shares will not recognize any loss but will recognize
gain, if any, on the shares surrendered to the extent of the cash received. Any
recognized gain will be capital gain unless the receipt by that shareholder of
cash has the effect of a dividend, in which event the gain will be taxable as
dividend income to the extent of the shareholder's ratable share of Smucker's
current and accumulated earnings and profits. If the holder is a corporation,
special consequences under Section 1059 of the Internal Revenue Code may apply
if the dividend is an "extraordinary dividend." Such corporate shareholders
should consult with their own tax advisors as to the particular tax consequences
of this provision of the Internal Revenue Code. Any capital gain will be
long-term capital gain if, on the date of the exchange, the shareholder's
holding period for the shares is greater than one year.
Alternatively, the cash received in the exchange may be treated as a
redemption of Class B common shares that is not pursuant to a plan of
reorganization, in which case gain or loss will be recognized on the shares
exchanged for cash unless the distribution of cash has the effect of a
distribution of a dividend, in which case, the cash received will be taxed as
dividend income to the extent of Smucker's current and accumulated earnings and
profits. The Internal Revenue Service, however, may possibly take the position
that the cash received by a holder of Class B common shares is in substance
separate from the exchange in which case all of the cash received will be taxed
as a dividend to the extent of Smucker's current and accumulated earnings and
profits.
Holders of Class B common shares should consult their own tax advisors as
to whether all or a portion of any cash received in exchange for their Class B
common shares will be treated as a dividend. In general, if the exchange of
Class B common shares for both cash and new Smucker common shares is made
pursuant to a plan of "reorganization" within the meaning of Section 368(a) of
the Internal Revenue Code, the redemption provisions of Section 302 of the
Internal Revenue Code will apply to the determination of whether the cash
received has the effect of a distribution of a dividend. Under the redemption
provisions, a holder of Class B common shares will be treated as if the portion
of the Class B common shares exchanged for cash had been redeemed by Smucker for
cash. Under the principles of Section 302 of the Internal Revenue Code, a holder
of Class B common shares will recognize capital gain rather than dividend income
with respect to the cash received in this redemption if the redemption is "not
essentially equivalent to a dividend" or is "substantially disproportionate"
with respect to such shareholder. In making these determinations, each of which
is described below, the constructive ownership rules of Section 318 of the
Internal Revenue Code will apply for purposes of determining the holder's
ownership interests in Smucker.
However, if the cash received in the exchange is treated as a redemption
that is not pursuant to a plan of reorganization, the redemption provisions of
Section 302 of the Internal Revenue Code would apply as described immediately
above to determine whether the cash received has the effect of a distribution of
a dividend, except that if the redemption is determined to have the effect of a
distribution of a dividend, the entire amount of the cash received will be taxed
as dividend income to the extent of Smucker's current and accumulated earnings
and profits and the amount of income recognized will not be limited to the
holder's gain.
Whether a redemption by Smucker of the shares for cash is "not essentially
equivalent to a dividend" with respect to a holder of Class B common shares will
depend on the shareholder's particular circumstances. A redemption resulting in
a "meaningful reduction" in the shareholder's percentage ownership of Smucker
common shares will not be essentially equivalent to a dividend. In determining
whether a redemption results in a meaningful reduction in the shareholder's
percentage ownership of Smucker common shares, a holder of Class B common shares
should compare his or her percentage share interest in Smucker (including
interests owned actually, hypothetically, and constructively) immediately before
the combination to his or her interest in Smucker after the combination. The
Internal Revenue Service has indicated that a shareholder in a publicly held
corporation whose relative stock interest in the corporation is minimal and who
exercises no "control" over corporate affairs is generally treated as having a
meaningful reduction in his or her stock after a redemption if his or her
percentage ownership in the corporation has been reduced to any extent, taking
into account the shareholder's actual and constructive ownership before and
after the redemption.
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<PAGE> 29
A redemption generally will be "substantially disproportionate" and,
therefore, would not have the effect of a distribution of a dividend with
respect to a shareholder, if the percentage of Smucker common shares actually
and constructively owned by the shareholder immediately after the redemption
described in the previous paragraph is less than 80%, by voting power and value,
of the Smucker common shares actually and constructively owned by the
shareholder immediately before the merger. Because the Class B common shares are
non-voting shares, however, holders of Class B common shares who exchange solely
Class B common shares for new Smucker common shares and cash cannot have their
percentage of Smucker voting stock decreased by the exchange and, as a result,
will not be able to satisfy the "substantially disproportionate" test.
If the exchange of Class B common shares for a combination of new Smucker
common shares and cash is made pursuant to a plan of "reorganization," holders
of Class B common shares will have an aggregate adjusted tax basis in the new
Smucker common shares equal to the shareholder's adjusted tax basis in the Class
B common shares surrendered in the exchange, decreased by the amount of cash
received by the shareholder and increased by the amount of the gain, if any,
recognized by the shareholder, including any amount that is characterized as a
dividend. If the cash received constitutes a separate dividend, holders of Class
B common shares will have an aggregate adjusted tax basis in the new Smucker
common shares equal to the holder's adjusted tax basis in the Class B common
shares immediately before the merger.
The cash received in the combination is treated as received in a
redemption, the adjusted tax basis of the new Smucker common shares will equal
to the holder's adjusted tax basis in his or her Class B common shares
surrendered, less the amount of tax basis in the new Smucker common shares
redeemed in the exchange, unless the receipt of cash by the shareholder is taxed
as dividend income, in which case the adjusted tax basis of the new Smucker
common shares will be the shareholder's adjusted tax basis in his or her Class B
common shares. Any capital gain will be long-term capital gain if, on the date
of the exchange, the shareholder's holding period for the shares is longer than
one year.
For tax purposes, the holding period for the new Smucker common shares will
include the holding period for the Class B common shares exchanged.
Exchange of Class A Common Shares for New Smucker Common Shares and Cash. A
shareholder who exchanges his or her Class A common shares for a combination of
new Smucker common shares and cash will be treated the same as a holder of Class
B common shares who receives both new Smucker common shares and cash if the
exchange of the Class A common shares is treated as an "exchange." In such an
event, the tax consequences to the holders of Class A common shares will be the
same as those described in "Exchange of Class B Common Shares for New Smucker
Common Shares and Cash," except that holders of Class A common shares, which are
voting shares, may be able to satisfy the "substantially disproportionate" test,
as described above.
The Internal Revenue Service is likely to take the position that because
the new Smucker common shares confer on their holders substantially similar
rights as the Class A common shares, no "exchange" for U.S. federal income tax
purposes will occur. In the absence of an "exchange," the cash received will be
treated as a redemption by Smucker of the holder's Class A common shares subject
to the redemption provisions of Section 302 of the Internal Revenue Code. In the
redemption, a holder of Class A common shares exchanged for cash will recognize
gain or loss, unless the receipt by that shareholder of cash has the effect of a
dividend, in which event all of the cash received will be taxable as dividend
income to the extent of the shareholder's ratable share of Smucker's current and
accumulated earnings and profits. Any capital gain will be long-term capital
gain if, on the date of the exchange, the shareholder's holding period for the
shares is longer than one year.
For tax purposes, the holding period for the new Smucker common shares will
include the holding period for the Class A common shares exchanged.
Exercise of Statutory Dissenters' Rights. If instead of having Class A
and/or Class B common shares converted in the merger into new common shares or
cash, a shareholder dissents from the merger with respect to some or all of his
or her shares, any consideration the shareholder receives from Smucker in
exchange for
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<PAGE> 30
those shares will generally be treated as proceeds from the sale or exchange of
those shares. Any gain or loss the shareholder recognizes as a result will
generally be long-term capital gain or loss if the shareholder held the Class A
and/or Class B common shares with respect to which the shareholder exercised
statutory dissenters' rights for more than one year at the effective time of the
merger. If, however, the shareholder actually or constructively owns new Smucker
common shares after the combination, the cash received by the shareholder may be
taxed as a dividend. The circumstances under which dividend treatment may apply
and the consequences of dividend treatment, are similar to those discussed above
when a shareholder receives both cash and new common shares. For a summary of
statutory dissenters' rights, see "The Combination -- Dissenters' Rights"
beginning on page 27.
Backup Withholding. Unless a shareholder complies with certain reporting
and/or certification procedures or is an exempt recipient under applicable
provisions of the Internal Revenue Code and Treasury regulations, cash payments
in exchange for the shareholder's Class A and/or Class B common shares may be
subject to backup withholding at the rate of 31%. Generally, backup withholding
applies only when a taxpayer fails to furnish a proper taxpayer identification
number or certify, under penalties of perjury, that the shareholder is not
subject to backup withholding. Any amounts withheld under the backup withholding
rules may be allowed as a refund or a credit against the shareholder's federal
income tax liability, provided that the shareholder furnishes the required
information to the Internal Revenue Service.
THE PRECEDING SUMMARY OF THE MATERIAL U.S. FEDERAL TAX CONSEQUENCES OF THE
COMBINATION AND THE MERGER AND THE ASSOCIATED EXCHANGE OF SHARES DOES NOT
PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS.
THIS DISCUSSION IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND MAY NOT
APPLY TO A PARTICULAR SHAREHOLDER IN LIGHT OF THE SHAREHOLDER'S PARTICULAR
CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC
TAX CONSEQUENCES TO YOU OF THE COMBINATION AND THE MERGER AND THE ASSOCIATED
EXCHANGE OF SHARES, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE
APPLICABILITY OF FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER APPLICABLE TAX LAWS,
AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.
25
<PAGE> 31
THE COMBINATION
(ITEM 1 ON PROXY)
If you are a holder of record of our Class A and/or Class B common shares
and you return a signed proxy or proxies in the enclosed form, the shares
represented by your proxy or proxies will be voted for approval of the
combination and for the adoption of the merger agreement described in this
document, unless you instruct otherwise. Your board of directors has approved
and adopted the merger agreement, a copy of which is attached as Annex A and
incorporated in this document by reference. The following discussion highlights
key information about the proposed combination of our Class A and Class B common
shares and the related merger, but may not include all of the information that
you, as a shareholder, would like to know. We urge you to read the agreement
attached to this document as Annex A in its entirety.
GENERAL
Subject to the satisfaction of the conditions to completion of the
combination, including the approval of the combination and the adoption of the
merger agreement by the shareholders of Smucker, JMS-Ohio will be merged into
Smucker at the effective time. The "effective time" is the time at which the
merger will become effective under Ohio law. Smucker will be the surviving
corporation and will continue to do business under the name The J. M. Smucker
Company.
WHAT SMUCKER'S SHAREHOLDERS WILL RECEIVE
In the combination, each Class A and Class B common share will be
converted, at the election of the holder, into $18.50 in cash, subject to the
limitations described below under the heading "Adjustment of Amount of Cash
Received," or one share of a new class of Smucker common shares.
As of May 11, 2000, there were 14,259,429 Class A common shares issued and
outstanding and 1,952,859 Class A common shares held in treasury, and 14,065,851
Class B common shares issued and outstanding, and 2,146,437 Class B common
shares held in treasury. Assuming that cash consideration in the amount of $100
million is paid, and no holders of common shares exercise statutory dissenters'
rights, there will be 22,919,875 new common shares issued and outstanding
following the combination, all of which will be held by current shareholders of
Smucker.
MANNER OF ELECTING CASH OR SHARES
A form of election to receive cash in the combination is included with this
document. To elect to receive cash in the combination for some or all of your
shares, you must complete, sign, and return the form of election to the paying
agent by 5:00 p.m., Eastern Daylight Time, on August 14, 2000. Please read the
election form carefully, for it provides detailed instructions on how to
surrender your certificates representing the shares as to which you wish to make
a cash election to the paying agent for cancellation. If you elect to receive
cash, following the combination you will receive:
- a check for the appropriate amount of cash; and
- if the cash paid to shareholders will be prorated, certificates for the
appropriate number of new Smucker common shares.
Any shareholder may revoke or change his or her election in writing prior to the
deadline.
If a shareholder fails to complete and return an election form, that
shareholder will be deemed to have indicated that he or she has no preference as
to the receipt of cash or new common shares in the combination, and will receive
new common shares.
If you do not wish to receive cash in the combination for any of your
shares, you should not send in your Class A or your Class B common share
certificates. If the combination is approved, your Class A or Class B common
shares will automatically convert into new Smucker common shares. You should
retain your certificates for your Class A or Class B common shares. While you do
not need to exchange your Class A or Class B common share certificates following
the combination, you will be permitted to do so if you wish.
26
<PAGE> 32
Please contact our Corporate Secretary for further information. See "Where You
Can Find More Information" beginning on page 56.
ADJUSTMENT OF AMOUNT OF CASH RECEIVED
Smucker has limited the total amount of cash it will be obligated to pay to
shareholders in the combination to $100 million.
If our shareholders elect to receive cash in an aggregate amount that
exceeds $100 million, the available cash will be divided equally among all
shares that have elected to receive cash. In that case, the number of shares
covered by each form of election that will be converted into cash will be
determined by multiplying the number of shares covered by that form of election
by a fraction, the numerator of which is the maximum number of Class A and Class
B common shares that are entitled to cash consideration, and the denominator of
which is the total number of shares that have elected to receive cash, rounded
down to the nearest whole number. Each Class A and Class B common share that is
not converted into cash will be converted into one new Smucker common share.
MANNER OF CONVERTING SHARES
At the effective time of the combination, holders of certificates
representing Class A or Class B common shares that were not converted into cash
will cease to have any rights, other than dissenters' rights, with respect to
the Class A or Class B common shares, but will have rights as holders of new
Smucker common shares. Each Class A or Class B common share certificate will be
deemed for all corporate purposes to evidence the new Smucker common shares into
which the Class A or Class B common shares have been converted. Our share
transfer books will be closed at the close of business on the business day
immediately preceding the effective time of the merger, and the holders of
record of Class A or Class B common shares that were not converted into cash
will become holders of new Smucker common shares as provided in the merger
agreement.
CONDITIONS TO COMPLETION OF THE COMBINATION
Completion of the combination is subject to various conditions that must be
satisfied or waived prior to the combination. These conditions include that:
- we receive the required shareholder approval;
- no more than 10% of the 28,325,280 outstanding Class A and Class B common
shares, in the aggregate, assert statutory dissenters' rights;
- the registration statement to be filed with the Securities and Exchange
Commission in connection with the issuance of the new Smucker common
shares shall have become effective;
- the New York Stock Exchange approves the listing of the new Smucker
common shares; and
- we receive antitrust regulatory approval and the expiration of any
applicable waiting periods.
It is anticipated that the combination will be completed as soon as
practicable after the conditions to the completion are satisfied, or at such
later date as is, in the judgment of your board of directors, in the best
interests of the shareholders or Smucker.
The combination requires the approval of:
- at least two-thirds of the voting power of the Class A common shares,
giving effect to ten-vote shares, voting as a class; and
- at least two-thirds of the Class B common shares, voting as a class, with
one vote per share.
Smucker's directors, executive officers, and the members of the Smucker
family have indicated that they intend to vote FOR the combination. As of May
11, 2000, these directors, executive officers, and family members were entitled
to vote approximately 3,584,114 Class A common shares, or approximately 25% of
27
<PAGE> 33
the outstanding Class A common shares, representing approximately 44%-51% of the
voting power of the Class A common shares.
As of May 11, 2000, Smucker's directors, executive officers, and members of
the Smucker family were entitled to vote approximately 3,081,104 Class B common
shares, or approximately 22% of the outstanding Class B common shares.
Your approval of the combination will also constitute your approval of:
- the articles of incorporation attached to this document as Annex D and
the regulations attached to this document as Annex E, each of which will
be in effect upon consummation of the combination;
- the conversion of outstanding stock options and rights for Class A or
Class B common shares into options or rights to receive new Smucker
common shares; and
- all amendments to all of the foregoing deemed appropriate by our board of
directors to effect the combination.
AMENDMENT OF THE AGREEMENT GOVERNING THE COMBINATION
The agreement governing the transaction provides that Smucker and JMS-Ohio,
by mutual written agreement, may amend, modify, or supplement the agreement, at
any time prior to the effective time of the merger, except that after
shareholder approval of the agreement, there can be no amendments that would
alter or change:
- the amount or kind of shares to be received by shareholders in the
combination;
- any material term of the articles of incorporation or regulations that
will be in place following the combination; or
- the terms and conditions of the agreement if the alteration or change
would adversely affect the holders of any class of shares of Smucker or
JMS-Ohio.
ABANDONMENT OF THE COMBINATION
The agreement governing the transaction provides that, notwithstanding
adoption and approval of the agreement by our shareholders, your board of
directors may terminate the agreement or abandon the combination if your board
of directors determines that it would be in the best interests of the
shareholders or Smucker.
ESTIMATED FEES AND EXPENSES OF THE COMBINATION
The following table sets forth the estimated expenses incurred and to be
incurred by Smucker in connection with the combination. These fees will be paid
by Smucker.
<TABLE>
<S> <C>
Filing/registration fees.................................... $ *
NYSE listing fees........................................... *
Printing and engraving costs................................ *
Legal fees and expenses..................................... 700,000
Accounting fees and expenses................................ 20,000
Financial advisory fees and expenses........................ 900,000
Transfer agent fees and expenses............................ *
Proxy solicitation fees and expenses........................ *
Paying agent fees and expenses.............................. *
Public relations fees and expenses.......................... 100,000
Miscellaneous............................................... *
--------
Total....................................................... $ *
========
</TABLE>
28
<PAGE> 34
- ---------------
* To be determined.
REGULATORY MATTERS
To complete the combination:
- we must file a certificate of merger with the Secretary of State of Ohio;
and
- we and our largest shareholders may be required to make filings with or
obtain approvals from U.S. antitrust regulatory authorities including the
U.S. Federal Trade Commission and the Department of Justice.
We do not need to comply with any other federal or state regulatory requirements
or obtain any other regulatory approvals in order to effect the combination.
DISSENTERS' RIGHTS
Shareholders that so desire are entitled to relief as dissenting
shareholders under Ohio Revised Code Section 1701.85. A shareholder will be
entitled to this relief, however, only if the shareholder complies strictly with
all of the procedural and other requirements of Section 1701.85. The following
summary is not a complete statement of the method of compliance with Section
1701.85 and is qualified in its entirety by reference to the copy of Section
1701.85 and Section 1701.84 (which is referenced in Section 1701.85) attached to
this document as Annex B.
A shareholder that wishes to perfect rights as a dissenting shareholder in
the event the combination and related merger agreement are approved:
- must have been a record holder of the Class A or Class B common shares as
to which he or she seeks relief on July 3, 2000, the record date for the
annual meeting;
- must not have voted his or her Class A or Class B common shares in favor
of approval of the combination and adoption of the merger agreement; and
- must deliver to Smucker, not later than ten days after the annual
meeting, a written demand for payment of the fair cash value of the Class
A or Class B common shares as to which he or she seeks relief. The
written demand must state the shareholder's name, address, number and
class of common shares as to which he or she seeks relief, and the amount
claimed as the fair cash value of those shares.
A vote against the adoption of the merger agreement will not satisfy the
requirement of a written demand for payment. Any written demand for payment
should be mailed or delivered to:
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attn: Corporate Secretary
Because the written demand must be delivered to Smucker within the ten-day
period following the annual meeting, it is recommended, although not required,
that a shareholder use certified or registered mail, return receipt requested,
to confirm that the shareholder has made a timely delivery. No notice of the
adoption of the merger agreement will be sent.
If Smucker sends the dissenting shareholder, at the address specified in
the demand, a request for the certificate(s) representing the shareholder's
shares, the dissenting shareholder must deliver the certificate(s) to Smucker
within 15 days following the date the request was sent. Smucker may endorse the
certificate(s) with a legend to the effect that the shareholder has demanded
fair cash value of the shares represented by the certificate(s). Failure to
deliver the certificate(s) within 15 days of the request terminates the
shareholder's
29
<PAGE> 35
rights as a dissenting shareholder. Smucker must notify the shareholder of its
election to terminate the shareholder's rights as a dissenting shareholder
within 20 days after the lapse of the 15 day period.
Unless the dissenting shareholder and Smucker agree on the fair cash value
per share of Smucker's Class A or Class B common shares, the shareholder must,
within three months after the service of the written demand by the shareholder,
file a petition in the Court of Common Pleas of Wayne County, Ohio. If the court
finds that the shareholder is entitled to be paid the fair cash value of
Smucker's Class A or Class B common shares, as the case may be, the court may
appoint one or more appraisers to receive evidence and to recommend a decision
on the amount of the fair cash value. Fair cash value:
- will be determined as of the day prior to the annual meeting;
- will be the amount a willing seller and willing buyer would accept or pay
with neither being under compulsion to sell or buy;
- will not exceed the amount specified in the shareholder's written demand;
and
- will exclude any appreciation or depreciation in market value resulting
from the merger.
The court will make a finding as to the fair cash value of a Smucker Class A or
Class B common share, as the case may be, and render judgment against Smucker
for its payment with interest at a rate and from a date the court considers
equitable. The costs of proceedings shall be assessed or apportioned as the
court considers equitable.
The rights of any dissenting shareholder will terminate if:
- the dissenting shareholder has not complied with Section 1701.85, unless
Smucker, by its board of directors, waives the failure;
- Smucker abandons or is finally enjoined or prevented from carrying out,
or the shareholders of Smucker rescind their approval of the combination
and adoption of the merger agreement;
- the dissenting shareholder withdraws his or her written demand, with the
consent of Smucker, by its board of directors; or
- Smucker and the dissenting shareholder have not agreed upon the fair cash
value per share of Smucker common shares and neither has timely filed or
joined in a petition in an appropriate court for a determination of the
fair cash value of Smucker common shares.
For a discussion of the tax consequences to a shareholder who exercises
dissenters' rights, see "Special Factors -- Material Federal Income Tax
Consequences" beginning on page 21.
SHAREHOLDER RIGHTS PLAN
We have a shareholder rights plan that provides for, among other things,
certain distributions to our shareholders upon an actual or prospective change
in control of our company. The plan has an anti-takeover effect because a
distribution under the plan may cause a substantial dilution to a person or
group that attempts to acquire a substantial number of shares without approval
of our board of directors.
If the proposed combination is approved, our board of directors will
approve an amendment of the rights plan to permit the combination to be
completed and to change the provisions of the rights plan to be consistent with
a single class capital structure.
EMPLOYEE BENEFIT PLANS
Except as described below with respect to stock benefits, all of our
employee benefit and welfare plans, such as our medical plans and pension plans,
are expected to continue substantially unchanged and benefits under these plans
are not expected to be substantially affected by the combination. We expect that
substantially all of our plans providing stock benefits will continue in effect
after the combination, adjusted to
30
<PAGE> 36
reflect new common shares instead of Smucker Class A and/or Class B common
shares. Smucker, however, reserves the right to modify any employee benefit or
welfare plan.
PURCHASES OF SHARES
The following table indicates, with respect to any purchases of Class A
and/or Class B common shares made by Smucker or affiliates of Smucker since May
1, 1998, the range of prices paid for the shares, the amount of shares
purchased, and the average purchase price for the shares for each quarterly
period since May 1, 1998:
<TABLE>
<CAPTION>
SECURITIES AVERAGE
PURCHASED RANGE OF PRICES PAID PURCHASE PRICE
----------------- ----------------------------------- -----------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ---------------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1999
First Quarter......... -- -- -- -- -- --
Second Quarter........ 21,600 12,500 $23.69 to $24.34 $23.15 to $24.04 $23.97 $23.56
Third Quarter......... -- -- -- -- -- --
Fourth Quarter........ -- -- -- -- -- --
2000
First Quarter......... 140,000 92,200 $22.74 to $25.60 $19.42 to $22.38 $23.86 $20.56
Second Quarter........ -- 62,500 -- $20.00 to $20.97 -- $20.60
Third Quarter......... 192,600 251,200 $19.88 to $21.25 $15.75 to $17.75 $20.26 $16.60
Fourth Quarter........ -- 210,000 -- $14.44 to $14.94 -- $14.60
</TABLE>
31
<PAGE> 37
FINANCIAL STATEMENTS
Our Annual Report on Form 10-K for the fiscal year ended April 30, 1999
contains the Consolidated Balance Sheets of Smucker and its subsidiaries at
April 30, 1999 and 1998 and the Statements of Consolidated Income, Statements of
Consolidated Shareholders' Equity, and Statements of Consolidated Cash Flows of
Smucker and its subsidiaries for the fiscal years ended April 30, 1999, 1998,
and 1997, the financial statement schedule, and the notes thereto. Our Quarterly
Report on Form 10-Q for the period ended January 31, 2000 contains the unaudited
condensed Consolidated Balance Sheet of Smucker and its subsidiaries at January
31, 2000 and the unaudited condensed Statement of Consolidated Income, and
unaudited condensed Consolidated Statement of Cash Flows of Smucker and its
subsidiaries for the nine-month period ended January 31, 2000, and the related
notes. These financial statements, schedule, and notes are incorporated in this
document by reference.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements of Smucker are presented as if the combination had been completed as
of January 31, 2000 for pro forma balance sheet data purposes and on May 1, 1998
for pro forma income statement data purposes. The unaudited Pro Forma Condensed
Statement of Consolidated Income includes amounts derived from Smucker's audited
Statement of Consolidated Income for the year ended April 30, 1999 and the
unaudited Condensed Statement of Consolidated Income for the nine months ended
January 31, 2000. The unaudited Pro Forma Consolidated Balance Sheet includes
amounts derived from the unaudited Condensed Consolidated Balance Sheet of
Smucker as of January 31, 2000. Information is presented to reflect pro forma
adjustments for:
- the payment of $100 million in cash for the repurchase of approximately
5.4 million common shares in connection with the combination;
- the incurrence of $80 million in debt in connection with the combination
at a borrowing rate of 8% per annum; and
- the conversion of all our outstanding Class A and Class B common shares,
other than those sold to Smucker for cash, into a new, single class of
common shares of Smucker in connection with the combination.
This information does not reflect investment banking, legal, and other
transaction costs related to the combination.
The unaudited pro forma condensed consolidated financial statements of
Smucker and the accompanying notes should be read in conjunction with the
audited and unaudited consolidated financial statements of Smucker, and the
related notes incorporated in this document by reference.
We are providing this information for illustrative purposes only. It does
not necessarily reflect what the results of operations or financial position of
Smucker would have been if the combination had actually occurred. This
information also does not necessarily indicate what our future operating results
or consolidated financial position will be.
32
<PAGE> 38
THE J. M. SMUCKER COMPANY
UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME
NINE MONTHS ENDED JANUARY 31, 2000
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Net sales................................................ $475,888 $ $475,888
Cost of products sold.................................... 308,496 308,496
-------- ------- --------
167,392 167,392
Selling, distribution, and administrative expenses....... 122,036 122,036
Nonrecurring charge...................................... 4,805 4,805
-------- ------- --------
40,551 40,551
Other income (expense)
Interest income........................................ 2,056 (960)(1) 1,096
Interest expense....................................... (2,617) (4,800)(2) (7,417)
Other -- net........................................... 790 790
-------- ------- --------
Income before income taxes............................... 40,780 (5,760) 35,020
Income taxes............................................. 15,391 2,172(3) 13,219
-------- ------- --------
Net Income............................................... $ 25,389 $(3,588) $ 21,801
======== ======= ========
Net Income per Common Share............................ $ .88 $ .93
======== ========
Net Income per Common Share -- assuming dilution....... $ .88 $ .93
======== ========
Dividends declared on Class A and Class B Common
Shares................................................. $ .45 $ .45
======== ========
Number of shares used to compute Net Income per Common
Share.................................................. 28,811 (4) 23,405
======== ========
Number of shares used to compute Net Income per Common
Share -- assuming dilution............................. 28,907 (4) 23,501
======== ========
</TABLE>
- ---------------
(1) Represents the pro rata share decrease in investment income resulting from
the assumed use of $20 million of cash on hand at the approximate current
investing rate of 6.4%.
(2) Represents the pro rata share of incremental interest expense associated
with an additional $80 million in long-term debt to be borrowed in
connection with the combination. The interest rate on this debt is assumed
to be 8%.
(3) An effective tax rate of 37.7%, consistent with the historical rate for the
nine months ended January 31, 2000, was applied to determine income taxes.
(4) Smucker has indicated that it will pay up to $100 million in cash, in the
aggregate, toward the repurchase of outstanding shares. For pro forma
purposes, an estimated purchase price of $18.50 per share was assumed to
compute the number of shares to be reacquired. This pro forma computation
assumes that Smucker will repurchase shares aggregating the $100 million
maximum and that this buyback had occurred as of the beginning of the fiscal
period presented.
33
<PAGE> 39
THE J. M. SMUCKER COMPANY
UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME -- CONTINUED
YEAR ENDED APRIL 30, 1999
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Net sales................................................ $602,457 $ $602,457
Cost of products sold.................................... 395,944 395,944
-------- ------- --------
206,513 206,513
Selling, distribution, and administrative expenses....... 147,538 147,538
-------- ------- --------
58,975 58,975
Other income (expense)
Interest income........................................ 1,948 (1,280)(1) 668
Interest expense....................................... (179) (6,400)(2) (6,579)
Other -- net........................................... 887 887
-------- ------- --------
Income before income taxes............................... 61,631 (7,680) 53,951
Income taxes............................................. 23,868 2,972(3) 20,896
-------- ------- --------
Net Income............................................... $ 37,763 $(4,708) $ 33,055
======== ======= ========
Net Income per Common Share............................ $ 1.30 $ 1.40
======== ========
Net Income per Common Share -- assuming dilution....... $ 1.29 $ 1.38
======== ========
Dividends declared on Class A and Class B Common
Shares................................................. $ .57 $ .57
======== ========
Number of shares used to compute Net Income per Common
Share.................................................. 29,058 (4) 23,652
======== ========
Number of shares used to compute Net Income per Common
Share -- assuming dilution............................. 29,275 (4) 23,869
======== ========
</TABLE>
- ---------------
(1) Represents a decrease in investment income resulting from the assumed use of
$20 million of cash on hand at the approximate current investing rate of
6.4%.
(2) Represents the incremental interest expense associated with an additional
$80 million in long-term debt to be borrowed in connection with the
combination. The interest rate on this debt is assumed to be 8%.
(3) An effective tax rate of 38.7%, consistent with the actual historical rate
for the year ended, April 30, 1999, was applied to determine income taxes.
(4) Smucker has indicated that it will pay up to $100 million in cash, in the
aggregate, toward the repurchase of outstanding shares. For pro forma
purposes, an estimated purchase price of approximately $18.50 per share was
assumed to compute the number of shares to be reacquired. This pro forma
computation assumes that Smucker will repurchase shares aggregating the $100
million maximum and that this buyback had occurred as of the beginning of
the fiscal period presented.
34
<PAGE> 40
THE J. M. SMUCKER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JANUARY 31, 2000
(IN MILLIONS)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.............................. $ 26,054 $ (20,000)(1) $ 6,054
Trade receivables, less allowances..................... 55,566 55,566
Inventories:
Finished products................................... 60,069 60,069
Raw materials, containers, and supplies............. 80,178 80,178
--------- --------- ---------
140,247 140,247
Other current assets................................... 12,548 12,548
--------- --------- ---------
Total Current Assets........................... 234,415 (20,000) 214,415
Property, plant and equipment
Land and land improvements............................. 18,284 18,284
Buildings and fixtures................................. 86,490 86,490
Machinery and equipment................................ 210,868 210,868
Construction in progress............................... 28,580 28,580
--------- ---------
344,222 344,222
Less allowances for depreciation....................... (170,883) (170,883)
--------- ---------
Total Property, Plant and Equipment............ 173,339 173,339
Other noncurrent assets
Intangible assets...................................... 58,198 58,198
Other assets........................................... 22,184 22,184
--------- ---------
Total Other Noncurrent Assets.................. 80,382 80,382
--------- --------- ---------
$ 488,136 $ (20,000) $ 468,136
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable....................................... $ 33,821 $ $ 33,821
Other current liabilities.............................. 34,985 34,985
--------- --------- ---------
Total Current Liabilities...................... 68,806 68,806
Noncurrent liabilities
Long-term debt......................................... 75,000 80,000(2) 155,000
Other noncurrent liabilities........................... 21,898 21,898
--------- --------- ---------
Total Noncurrent Liabilities................... 96,898 80,000 176,898
Shareholders' equity
Total Shareholders' Equity..................... 322,432 (100,000)(3) 222,432
--------- --------- ---------
$ 488,136 $ (20,000) $ 468,136
========= ========= =========
</TABLE>
- ---------------
(1) Smucker intends to finance the repurchase of shares with a combination of
borrowings and existing internal funds. This pro forma adjustment reflects
the use of existing cash balances to finance $20 million of the $100 million
stock repurchase.
(2) Reflects additional long-term debt to be utilized to finance $80 million of
the stock repurchase.
(3) Reflects the impact of repurchasing approximately 5.4 million shares in
connection with the combination. The pro forma balance sheet assumes that
the maximum $100 million value of shares will be tendered and repurchased.
35
<PAGE> 41
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
each of the last two fiscal years and for the nine months ended January 31, 2000
and on a pro forma basis for the periods ended April 30, 1999 and January 31,
2000.
<TABLE>
<CAPTION>
PRO FORMA
---------------------------
NINE MONTHS YEAR ENDED YEAR ENDED NINE MONTHS YEAR ENDED
ENDED JANUARY APRIL 30, APRIL 30, ENDED JANUARY APRIL 30,
31, 2000 1999 1998 31, 2000 1999
------------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges................... 7.0x 13.4x 17.2x 4.1x 5.8x
</TABLE>
The ratio of earnings to fixed charges equals earnings before fixed charges
divided by fixed charges. For purposes of calculating the ratio of earnings to
fixed charges, earnings before fixed charges reduced by capitalized interest
consist of income from continuing operations before income taxes and cumulative
effect of changes in accounting principles, plus fixed charges reduced by
capitalized interest. Fixed charges consist of interest expense, capitalized
interest, amortization of debt issue costs and that portion of rental expense
representative of the interest factor.
36
<PAGE> 42
DESCRIPTION OF SMUCKER'S CAPITAL STOCK FOLLOWING THE COMBINATION
NEW COMMON SHARES
The express terms of the new Smucker common shares are set forth in full in
the articles of incorporation attached to this document as Annex D, and
incorporated in this document by reference, which will be the articles of
incorporation of Smucker following the combination. You should read the
following summary in conjunction with, and it is qualified in its entirety by
reference to, Annex D.
Voting. Each new common share would entitle the holder thereof to vote on
all matters on which shareholders currently are entitled to vote, including the
election of directors. Following the combination, the number of votes to which a
holder of new common shares issued upon conversion of Smucker Class A common
shares in the combination would be entitled would be determined on the same
basis as it now is with regard to the Class A common shares. Immediately
following the combination, the number of votes to which a holder of new common
shares issued upon conversion of Smucker Class B common shares in the
combination would be one per share. From and after the fourth anniversary of the
effective time of the combination, the number of votes to which a holder of new
common shares issued upon conversion of Smucker Class B common shares in the
combination will be ten per share, unless there has been a change in beneficial
ownership of the new common share during the four years immediately preceding
the record date. In that case, the current owner of that new common share will
be entitled to only one vote with respect to that share until four years pass
without a change in his or her ownership of the share.
Convertibility. The new Smucker common shares will not be convertible into
another class of common shares or any other security of Smucker.
Preemptive Rights. The new common shares will not carry any preemptive
rights enabling a holder to subscribe for or receive shares of Smucker of any
class or any other securities convertible into any class of Smucker shares.
Transferability; Trading Market. The new common shares will be freely
transferable and listed for trading on the New York Stock Exchange.
PREFERRED SHARES
The articles of incorporation attached to this document as Annex D
authorize 3,000,000 preferred shares. No preferred shares are currently issued
and outstanding. Each preferred share will have one vote per share.
The board of directors of Smucker following the combination may issue one
or more series of preferred shares from time to time with such powers,
preferences, rights, qualifications, limitations, and restrictions that are
permitted by the articles of incorporation attached to this document as Annex D,
which will become the articles of incorporation of Smucker pursuant to the
combination, and as the board fixes by resolution, including:
- dividend rights;
- redemption prices and conditions;
- sinking fund provisions;
- liquidation preferences; and
- conversion rights.
You will have no preemptive rights to participate in any issuance of
preferred shares.
The board of directors believes that the preferred shares will provide
flexibility for future financings and acquisitions. Although there currently are
no plans to issue preferred shares, it is contemplated that from time to time
following the combination Smucker may consider transactions involving the
issuance of preferred shares. Because the articles of incorporation that will be
in place following the combination give the board flexibility in determining the
terms of the preferred shares, the board will be able to issue preferred shares
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with terms suitable to existing market conditions at the time of issuance or to
meet the needs of a particular transaction.
Although the board of directors has no present intention of issuing any
preferred shares, the ability of the board to issue the preferred shares could
enable the board to render more difficult or discourage an attempt by another
person or entity to obtain control of Smucker. The preferred shares could be
issued by the board in a public or private sale, merger, or similar transaction,
increasing the number of outstanding shares and thereby diluting the equity
interest and voting power, if the preferred shares were convertible into Smucker
common shares, of a party attempting to obtain control of Smucker.
The articles of incorporation that will be in place following the
combination contain the same provisions specifying special voting requirements
for certain business combinations as do Smucker's articles of incorporation,
which provisions also may have the effect of rendering more difficult or
discouraging an attempt by another person to obtain control of Smucker.
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COMPARATIVE RIGHTS OF SMUCKER'S SHAREHOLDERS
BEFORE AND AFTER THE COMBINATION
Upon consummation of the combination, the rights of shareholders that
receive new common shares will be governed by Ohio law, the articles of
incorporation attached as Annex D to this document, and the regulations attached
as Annex E to this document.
The articles of incorporation that will govern Smucker following the
combination differ from Smucker's current articles of incorporation as a result
of changes that implement the combination and modify the provisions of the
Smucker articles relating to control share acquisitions. In particular:
- following the combination, the articles of Smucker will not contain any
provision for Class B common shares or Class A common shares. In
connection with the elimination of the dual, voting and non-voting, class
structure:
- the articles will authorize 70 million common shares instead of 35
million Class A common shares and 35 million Class B common shares;
- the other provisions relating to Class B shares, including the
provisions restricting the voting power of Class A shares that are
deemed to be "excess Class A shares" will be eliminated; and
- the time-phased voting provisions will be modified in order to clarify
that new Smucker common shares issued upon conversion of Class B
shares in the combination will have ten votes from and after the
fourth anniversary of the combination if no change in beneficial
ownership occurs with respect to such shares during the previous four
years. Shares issued upon conversion of Class A common shares in the
combination will have the same voting power immediately following the
combination as they did immediately before.
- following the combination, the provisions of the Smucker articles
relating to control share acquisitions will be modified to expand the
definition of "interested shares" to include arbitrageurs and to make
other changes necessary to conform the articles provision with the Ohio
Control Share Act, as it has been amended from time to time, and to
clarify that share acquisitions by members of the Smucker family will not
trigger the articles' control share acquisition provisions.
Except as otherwise described above, the articles of incorporation that
will govern Smucker following the combination are identical in all material
respects to the current articles of incorporation of Smucker.
The regulations that will govern Smucker following the combination differ
from the current regulations of Smucker. In particular the regulations that will
govern Smucker following the combination:
- contain procedures regulating shareholder proposals and the conduct of
shareholder meetings;
- provide flexibility in scheduling annual shareholder meetings;
- permit the board of directors to set a record date that is as many as 60
days before a shareholders' meeting. Currently, the regulations require
that the record date be no more than 45 days before a meeting;
- permit electronic and other forms of non-written proxy authorizations;
and
- in accordance with recent changes in Ohio law, permit committees of the
board of directors to be comprised of one director, rather than require
three.
Except as otherwise described above, the new regulations that will govern
Smucker following the combinations are identical in all material respects to the
current regulations of Smucker.
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INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF SMUCKER AND JMS-OHIO
The following people are the current executive officers and directors of
Smucker and JMS-Ohio. After the combination, the current directors and executive
officers of Smucker will remain in office. Furthermore, with respect to the
directors and executive officers:
- all are citizens of the United States;
- none have been convicted in a criminal proceeding during the past five
years;
- none have been a party to any judicial or administrative proceeding
during the past five years that resulted in a judgment, decree, or final
order enjoining the person from future violations of, or prohibiting
activities subject to, federal or state securities laws, or a finding of
any violation of federal or state securities laws; and
- other than Tim Smucker and Richard Smucker, who are brothers, and H. Reid
Wagstaff, who is the brother-in-law of Tim Smucker and Richard Smucker,
none have familial relationships with each other.
Unless otherwise noted, the principal business address of each person
listed below is the address of Smucker and JMS-Ohio, Strawberry Lane, Orrville,
Ohio 44667. Neither Smucker nor JMS-Ohio has been convicted in a criminal
proceeding during the past five years. Neither Smucker nor JMS-Ohio has been a
party to any judicial or administrative proceeding during the past five years
that resulted in a judgment, decree, or final order enjoining it from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities laws.
SMUCKER
Information regarding each of the directors of Smucker, including Tim
Smucker, Richard Smucker, Vincent C. Byrd and Fred A. Duncan, who are executive
officers, is included under the heading "Election of Directors" beginning on
page 41 of this document.
The following individuals are the other current executive officers of
Smucker:
Mark R. Belgya. Mr. Belgya has been the Corporate Controller since August
1997. Prior to that Mr. Belgya served as Manager, Financial Business Analysis
from April 1993 through July 1997.
K. Edwin Dountz. Mr. Dountz has been the Vice President-Sales since
January 1981.
Steven J. Ellcessor. Mr. Ellcessor has been the Vice President-Finance and
Administration, Secretary/ Treasurer, and General Counsel since November 1999.
Prior to that Mr. Ellcessor served as Vice President-Administration, Secretary,
and General Counsel since June 1996; and was Secretary and General Counsel from
April 1986 through May 1996.
Robert E. Ellis. Mr. Ellis has been the Vice President-Human Resources
since June 1996. Prior to that Mr. Ellis served as Director, Human Resources
from September 1985 through May 1996.
Richard G. Jirsa. Mr. Jirsa has been the Vice President-Information
Services since August 1997. Prior to that Mr. Jirsa served as Corporate
Controller from February 1978 through July 1997.
Eloise L. Mackus. Ms. Mackus has been the Vice President and General
Manager, International Market since May 1999. Prior to that Ms. Mackus served as
Director, International Market from January 1999 through April 1999; and was
Assistant General Counsel from April 1994 through December 1998.
John D. Milliken. Mr. Milliken has been the Vice President-Logistics since
November 1997. Prior to that Mr. Milliken served as Vice President-Logistics and
Business Process Reengineering from October 1996 to October 1997; and Vice
President-Logistics from September 1993 through September 1996.
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Steven T. Oakland. Mr. Oakland has been the Vice President and General
Manager, Foodservice Market since February 1999. Prior to that Mr. Oakland
served as General Manager, J. M. Smucker (Canada) Inc. a subsidiary of Smucker,
from July 1995 through January 1999.
Richard F. Troyak. Mr. Troyak has been the Vice President-Operations since
September 1998. Prior to that Mr. Troyak served as Director, East Coast
Operations from October 1997 through August 1998; Director of Operations,
Reengineering from October 1996 through September 1997; and General Manager,
Mrs. Smith's, Inc., a subsidiary of Smucker, from July 1994 through September
1996.
H. Reid Wagstaff. Mr. Wagstaff has been the Vice President-Government and
Environmental Affairs since November 1994.
JMS-OHIO
The board of directors of JMS-Ohio is currently made up of Tim Smucker,
Richard Smucker, Vincent C. Byrd, and Fred A. Duncan. Information regarding
these individuals can be found under "Election of Directors" beginning on page
41 of this document.
JMS-Ohio's executive officers are Richard Smucker, President and Treasurer,
and Steven J. Ellcessor, Secretary. Information regarding Mr. Smucker can be
found under "Election of Directors" beginning on page 41, and information
regarding Mr. Ellcessor can be found under "Information Concerning the Directors
and Executive Officers of Smucker and JMS-Ohio -- Smucker" immediately above.
INTERESTS OF DIRECTORS, EXECUTIVE OFFICERS, AND MEMBERS OF THE SMUCKER FAMILY IN
THE COMBINATION
You should be aware of the interests that directors, executive officers,
and members of the Smucker family who are also shareholders of Smucker,
including Tim Smucker, our Chairman, and Richard Smucker, our President, have in
the combination. These interests may be different than your interests as a
shareholder.
Effect on Relative Ownership Interest. As noted elsewhere in this
document, directors, executive officers, and members of the Smucker family
together own approximately 25% of the outstanding Class A common shares and 22%
of the outstanding Class B common shares, or 24% of the outstanding Smucker
common shares, taken as a whole. Directors, executive officers, and members of
the Smucker family have indicated that they will convert all of their Class A
and/or Class B common shares into new common shares in the combination. If other
shareholders elect to receive cash in the combination, then, following the
combination, the number of Smucker common shares outstanding will decrease, and
the ownership by directors, executive officers, and members of the Smucker
family, as a percentage of the outstanding Smucker common shares, will increase.
If the maximum number of shares elect to receive cash in the combination, then,
following the combination, members of this group would together own 29% of the
outstanding common shares.
Effect on Voting Power. Management estimates that together, our directors
and executive officers, and members of the Smucker family together currently
control between 40% and 51% of the voting power of Smucker. In the combination,
Class B common shares, which are currently non-voting, will be converted into
new Smucker common shares, which will initially have one vote. Therefore, the
relative voting power of each holder of Class B common shares will increase and
the relative voting power of each holder of Class A common shares will decrease.
The impact on the voting power of any particular shareholder will depend on:
- the number of Class A common shares and Class B common shares held by
that holder;
- the number of shares that are exchanged for cash in the combination; and
- whether the Class A common shares held by the holder are ten-vote shares
or one-vote shares under Smucker's time-phased voting plan.
Management estimates that immediately following the combination, assuming that
the maximum number of shares elect to receive cash in the combination and no
directors, executive officers or members of the
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Smucker family make such an election, members of the Smucker family will
together control between 41% and 52% of the voting power of Smucker.
The new Smucker common shares issued upon conversion of the Class B common
shares in the combination will participate in Smucker's time-phased voting plan.
Therefore, it is possible that these shares will eventually become ten-vote
shares. It is likely that directors, executive officers, and members of the
Smucker family will retain their shares for and after the expiration of the
four-year holding period necessary for the shares to become ten-vote shares.
Therefore, after the fourth anniversary of the closing of the combination,
assuming that the directors, executive officers, and members of the Smucker
family retain all of their Smucker common shares, directors, executive officers,
and members of the Smucker family could control up to a maximum of 46% of the
voting power of Smucker.
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ELECTION OF DIRECTORS
(ITEM 2 ON PROXY)
Unless instructed otherwise, the proxy holders intend to vote for the
election of Fred A. Duncan, Charles S. Mechem, Jr., and Tim Smucker, as
directors, each for a term of three years. These individuals comprise the class
of directors whose terms of office expire this year and who are standing for
re-election.
In the event of the death or inability to act of any of the candidates for
directors, the proxy to that extent will be voted for such other person or
persons as the board of directors may recommend. Smucker's management has no
reason to believe that the persons listed as candidates for directors will be
unable to serve.
The members of the board of directors, including those who are nominees for
election, with information as to each of them based on data furnished to Smucker
by these persons as of June 30, 2000, are as follows:
<TABLE>
<C> <S> <C>
[VINCENT C. BYRD VINCENT C. BYRD Mr. Byrd, 45, has been a director since April
PHOTO] 1999. He has been Vice President and General
Manager, Consumer Market of Smucker since
January 1995. Mr. Byrd also is a director of
Spangler Candy Company. His term will expire in
2002.
[KATHRYN W. DINDO KATHRYN W. DINDO Ms. Dindo, 51, has been a director since
PHOTO] February 1996. She has been Vice President of
FirstEnergy Corp., a utility holding company,
since 1998. Prior to that time, she was Vice
President and Controller of Caliber System,
Inc., a subsidiary of FDX Corporation and
transportation services company, since January
1996. She joined Caliber System, Inc. in August
1994 as Assistant Controller. Ms. Dindo is a
member of the Audit Committee. Her term will
expire in 2001.
[FRED A. DUNCAN FRED A. DUNCAN Mr. Duncan, 54, has been a director since April
PHOTO] 1999. He has been Vice President and General
Manager, Industrial Market of Smucker since
February 1995. Mr. Duncan also is a director of
Bush Brothers and Company and Rocco, Inc., both
of which are food processing and manufacturing
companies. His proposed term would expire in
2003.
[ELIZABETH VALK ELIZABETH VALK LONG Ms. Long, 50, has been a director since May
LONG PHOTO] 1997. She has been Executive Vice President of
Time Warner Companies Inc., a media and
entertainment company, since May 1995. Prior to
that time, she was President of TIME magazine
from September 1993 to May 1995. She is also a
director of Wachovia Corporation, a bank holding
company. Ms. Long is a member of the Audit
Committee. Her term will expire in 2002.
[RUSSELL G. MAWBY RUSSELL G. MAWBY Dr. Mawby, 72, has been a director since 1983.
PHOTO] He was Chairman and Chief Executive Officer of
the W.K. Kellogg Foundation, Battle Creek,
Michigan, until his retirement in 1995 and is
now Chairman Emeritus. Dr. Mawby is Chairman of
the Nominating Committee and a member of the
Executive Compensation Committee. His term will
expire in 2001.
</TABLE>
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<TABLE>
<C> <S> <C>
[CHARLES S. MECHEM, CHARLES S. MECHEM, JR. Mr. Mechem, 69, has been a director since 1982.
JR. PHOTO] He retired as Chairman of Convergys Corporation,
a provider of outsourced customer management
services in 2000, a post he was elected to in
1999. Prior to that he was Chairman of
Cincinnati Bell Inc., a telecommunications
services holding company, since April 1996. He
has also been a consultant with Arnold Palmer
Enterprises since March 1996. He retired in
December 1995 as Commissioner of the Ladies
Professional Golf Association and is now
Commissioner Emeritus of that organization. He
also is a director of Arnold Palmer Golf
Company, Convergys Corporation, Mead
Corporation, a manufacturer and seller of paper
and wood products, Ohio National Life Insurance
Company. Mr. Mechem is Chairman of the Executive
Compensation Committee and a member of the
Nominating Committee. His proposed term would
expire in 2003.
[RICHARD SMUCKER RICHARD K. SMUCKER Mr. Smucker, 52, has been a director since 1975.
PHOTO] He is the President of Smucker. Mr. Smucker also
is a director of Wm. Wrigley Jr. Company, a
manufacturer of chewing gum products, The
Sherwin-Williams Company, a manufacturer and
seller of coatings, and International Multifoods
Corporation, a food service distribution
company. Mr. Smucker is the brother of Tim
Smucker. His term will expire in 2001.
[TIM SMUCKER PHOTO] TIMOTHY P. SMUCKER Mr. Smucker, 56, has been a director since 1973.
He is the Chairman of Smucker. Mr. Smucker also
is a director of Huntington BancShares
Incorporated, a bank holding company, and
Dreyer's Grand Ice Cream Inc., a manufacturer
and distributor of premium ice cream products.
He is a member of the Nominating Committee. Mr.
Smucker is the brother of Richard Smucker. His
proposed term would expire in 2003.
[WILLIAM H. WILLIAM H. STEINBRINK Mr. Steinbrink, 57, has been a director since
STEINBRINK PHOTO] 1994. He has been the President and Chief
Executive Officer of CSM Industries, Inc., a
manufacturer of specialty metals, since November
1996. Prior to that time, he was President and
Chief Executive Officer of Laurel Industries,
Inc., also a manufacturer of specialty metals.
He was a partner in the law firm of Jones, Day,
Reavis & Pogue until August 1994. Mr. Steinbrink
is a member of the Executive Compensation
Committee. His term will expire in 2001.
[BENJAMIN B. BENJAMIN B. TREGOE, JR. Mr. Tregoe, 72, has been a director since 1982.
TREGOE, JR. He was Chairman of Kepner-Tregoe Inc., a
PHOTO] Princeton, New Jersey, management and
organization development consulting company
until his retirement in March 1996 and is now
Chairman Emeritus. Dr. Tregoe is Chairman of the
Audit Committee. His term will expire this year.
</TABLE>
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<TABLE>
<C> <S> <C>
[WILLIAM WRIGLEY, WILLIAM WRIGLEY, JR. Mr. Wrigley, 36, has been a director since 1992.
JR. PHOTO] From 1991 to 1999 he was Vice President, and
from 1999 he has been President and Chief
Executive Officer, of Wm. Wrigley Jr. Company.
Mr. Wrigley also is a director of Wm. Wrigley
Jr. Company. Mr. Wrigley is a member of the
Audit Committee. His term will expire in 2002.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
ELECTION TO THE BOARD OF DIRECTORS.
MEETINGS AND COMMITTEES
During the 2000 fiscal year there were four meetings of Smucker's board of
directors. All directors, except Ms. Long, attended at least 75% of the total
number of board and committee meetings for which they were eligible.
The audit committee met three times during the 2000 fiscal year. Its
principal functions include:
- reviewing with the independent auditors of Smucker the scope and
thoroughness of the auditors' examination and considering recommendations
of the independent auditors;
- recommending to the board of directors the appointment of independent
auditors for the year; and
- reviewing the sufficiency of Smucker's system of internal controls with
the financial officers, the independent auditors, and, to the extent the
committee deemed necessary, legal counsel.
The executive compensation committee met three times during the 2000 fiscal
year. Its principal functions include:
- fixing the compensation of executives of Smucker;
- administering Smucker's restricted stock bonus and stock option programs;
and
- considering employee benefit programs generally.
The nominating committee met once during the 2000 fiscal year. This
committee is responsible for:
- recommending to the board of directors nominees for election as
directors; and
- considering suggestions forwarded by shareholders to the secretary of
Smucker concerning qualified candidates for election as directors.
DIRECTOR COMPENSATION
Directors of Smucker who are not also employees are compensated for
services as a director on the basis of $24,000 per year, plus $1,000 per year
($3,000 per year for the chairman) for each committee on which the director
serves. Nonemployee directors may elect to receive all or 50% of their annual
retainer and committee fees in the form of units under Smucker's Nonemployee
Director Stock Plan. All units, together with dividends credited thereon, are
paid out in the form of Class A common shares upon termination of service as a
director. Following the combination, units will be paid out in the form of new
common shares.
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THE FOLLOWING REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS SHALL NOT BE DEEMED FILED FOR PURPOSES OF THE SECURITIES ACT OF 1933
OR THE SECURITIES AND EXCHANGE ACT OF 1934, NOR SHALL IT BE DEEMED TO BE
SOLICITING MATERIAL OR INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT
INCORPORATING BY REFERENCE THIS DOCUMENT INTO ANY FILINGS OF SMUCKER PURSUANT TO
EITHER ACT, EXCEPT TO THE EXTENT SMUCKER SPECIFICALLY INCORPORATES THE REPORT BY
REFERENCE THEREIN.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Executive Compensation Committee of the board of directors is composed
of three independent, nonemployee directors and is responsible for establishing
the levels of compensation and benefits for executive officers of Smucker. The
Committee evaluates Smucker's performance and the compensation paid to its
executive officers on an ongoing basis.
COMPENSATION PHILOSOPHY
The Committee believes that an effective executive compensation program
must have two parts. First, it should have a cash component that is competitive
enough to retain highly qualified executives, while providing performance-based
incentives. The Committee believes that Smucker's base salary structure and
Management Incentive Plan bonuses combine to meet these requirements.
The second part of the program is equity-based in order to provide
long-term incentives and ensure that management's long-term interests are
aligned with those of other shareholders. The equity-based components of the
compensation program are provided by the Restricted Stock Bonus Plan, the 1987
Stock Option Plan, and the 1998 Equity and Performance Incentive Plan.
SALARIES
Base compensation for all salaried positions in Smucker, including
executive officers, is determined by reference to individual performance and
position within the salary range for the particular job classification.
Smucker's human resources department develops the salary ranges and
classifications with assistance from outside consultants who help to ensure that
the overall salary structure is competitive. Smucker's goal with regard to
salaries and compensation is to provide a structure that is competitive with
other comparably sized manufacturing companies. Over 300 companies are used for
comparison purposes, and many of them are included in the Standard & Poor's Food
Group Index (see the total shareholder return graph presented elsewhere in this
document). Included in the comparison group are such companies as Campbell Soup
Company, General Mills, Inc., Kellogg Company, Mars, Inc., McCormick & Company,
Inc., Nestle USA, Inc., Ralston Purina Company, Sara Lee Corporation, and Wm.
Wrigley Jr. Company.
Generally, Smucker targets its salary ranges at approximately the fiftieth
percentile. It then adjusts the ranges to account for the fact that most of the
comparison companies are significantly larger than Smucker. Overall, the
Committee believes that Smucker's compensation structure rewards its employees
appropriately and is sufficiently competitive to retain key employees.
Although the salary ranges for the executive officers are recommended by
the human resources department based on its own research and the advice of
outside consultants, those ranges are regularly reviewed by the Committee and
are subject to its approval, as are any changes to an officer's salary grade
level.
Management's salary recommendations for executive officers usually are
submitted to the Committee for consideration at its April meeting. Those
recommendations generally are based upon the salary increase guidelines that
have been determined by management for all corporate salaries as part of the
planning and budgeting process for the coming fiscal year. The average of the
salary increases granted to members of the officer group for fiscal year 2000
was 5.2%.
At this time, no single individual in Smucker is designated as chief
executive officer. Tim Smucker, Smucker's Chairman, and Richard Smucker,
Smucker's President, are the two most senior members of management and operate
jointly as chief executive officer. Management submitted no recommendation
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<PAGE> 52
concerning a salary increases for Tim Smucker or Richard Smucker. The Committee
determined that each of them should be given an increase of 5.2% for 2000, equal
to the average increase given to Smucker's other executive officers.
Factors considered when assessing executive officers' performance for
compensation purposes, including Tim Smucker and Richard Smucker, include, in no
particular order, Smucker's sales and earnings results, market share gains,
whether Smucker's business plan and strategic goals are being met, and
individual performance evaluations. None of these factors, however, is
necessarily weighed more heavily than any other.
MANAGEMENT INCENTIVE PLAN
Smucker maintains a management incentive program designed to recognize key
management members based on their individual performance and their contribution
to the achievement of Smucker's objectives. A target award is set for each
participant based on salary grade level and competitive award levels for
similarly situated individuals at comparable manufacturing companies, which are
generally the same companies used in establishing base salary ranges. The actual
award given, if any, is based on personal performance, Smucker's performance to
its earnings goal for the year and, if the participant is part of a strategic
business area, that area's performance to its profit goal. No awards are given
if Smucker does not meet minimum performance standards, and the maximum award a
participant may receive is limited to twice the target award.
After the end of each fiscal year, management presents the Committee with a
summary and recommendation for management incentive bonuses. The presentation
includes:
- information on Smucker's performance for the fiscal year just ended
(earnings per share for the year with a comparison to the prior year and
to Smucker's plan, and operating margins for the strategic business
areas);
- awards to each individual in the plan in the prior three years;
- current salary, salary range, and target award information; and
- a specific recommendation based on all of the foregoing.
The Committee then reviews the information and recommendations with management
and makes a decision as to which recommendations to accept and whether any
should be modified.
The management incentive awards for Tim Smucker and Richard Smucker each
year are made based on the same factors as those used for other members of the
Management Incentive Plan. No recommendation is made by management concerning
the individual portion of the awards for the Chairman or the President; that
amount is determined by the Committee based on its appraisal of individual
performance.
[DISCUSSION OF ACTUAL FISCAL 2000 MIP AWARDS TO BE ADDED AFTER JUNE COMMITTEE
MEETING.]
RESTRICTED STOCK BONUS PLAN
Smucker's Restricted Stock Bonus Plan was implemented in 1981 based on the
board of directors determination that such a plan would help Smucker to attract
and retain key senior managers and would give those managers a personal interest
in Smucker as a shareholder. The 1998 Equity and Performance Incentive Plan
permits Smucker to continue making restricted stock awards for those purposes.
Restricted stock awards generally are considered every two years. The last
awards made were with respect to the 1999 fiscal year; no awards were made with
respect to fiscal 2000.
STOCK OPTION PLANS
The J. M. Smucker 1987 Stock Option Plan was enacted for two reasons. It
was determined by the board of directors that the ability of Smucker to provide
the benefits of such a plan was an important element in ensuring that Smucker's
overall compensation program for its key managers remained competitive. Also,
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<PAGE> 53
the board believed that the added long-term incentives provided by the plan
would be beneficial to both Smucker and its shareholders. The 1998 Equity and
Performance Incentive Plan serves these same purposes. Participants in the plan
include both executive officers and other key managers.
Awards under the plan are considered annually and are made by the Committee
following a review of the recommendations of management. Target grant levels are
determined for individual participants based on salary grade level and a
determination by Smucker's human resources department of the prevailing
competitive award levels for comparably situated individuals at other comparable
manufacturing companies. The companies considered are largely the same as those
used in establishing base salary ranges. Individual performance and the
performance of Smucker are also considered in establishing each proposed award.
Although all of these factors are considered in making an award, no specific
weight is assigned to them, and the relative importance of each factor may vary
from participant to participant. The Committee does not specifically consider
the total number of options held by a participant in determining the size of a
new award, but information with regard to all previous awards is presented to
and reviewed by the Committee when awards are made.
During fiscal 2000, Smucker's executive compensation consultants conducted
a competitiveness review of both the short and long term components of the
executive compensation program. One finding of the consultants in that review
was that the size of Smucker's option award grants needed to be adjusted in
order to remain consistent with competitive market practices. The Committee
accepted the consultants' recommendations, and authorized an increase in the
size of the award for most participants over the prior year.
The Committee has considered the potential impact on Smucker's compensation
plans of the $1,000,000 cap on deductible compensation under Section 162(m) of
the Internal Revenue Code, which was enacted as part of the Omnibus Budget
Reconciliation Act of 1993. The Committee believes that awards under Smucker's
1998 Equity and Performance Incentive Plan qualify under Section 162(m) as
deductible compensation. Therefore, the Committee does not believe that Section
162(m) has any impact on Smucker at this time. The Committee will, however,
review the matter periodically to assess the need for further action.
The Committee believes that Smucker's compensation plans and practices are
sound and well-considered. It also believes that the level of compensation
provided to the executive officers is appropriately related to both the
competitive market and the historic and current performance of Smucker. The
Committee in the future will continue to focus on these factors and on
maintaining a compensation system that will encourage maximization of long-term
shareholder value.
EXECUTIVE COMPENSATION COMMITTEE
Charles S. Mechem, Jr., Chairman
Russell G. Mawby
William H. Steinbrink
48
<PAGE> 54
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation over the past
three fiscal years for our Chairman and the other four most highly compensated
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- -----------------------------------
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) ($) ($)(1) (#)(2) ($)
- ------------------------- ---- -------- ------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Tim Smucker................. 2000 $ $ $ $
Chairman 1999 407,692 208,000 -- 331,500 30,000 8,013(3)
1998 390,000 358,000 -- 0 27,000 8,197
Richard Smucker............. 2000
President 1999 400,000 208,000 -- 331,500 30,000 7,782(3)
1998 387,750 358,000 -- 0 27,000 8,293
Fred A. Duncan.............. 2000
Vice President & General 1999 175,577 81,320 -- 97,500 10,000 8,058(3)
Manager, Industrial Market 1998 161,039 114,160 -- 0 8,000 8,111
Vincent C. Byrd............. 2000
Vice President and General 1999 169,442 77,330 -- 97,500 10,000 7,979(3)
Manager, Consumer Market 1998 152,885 97,000 -- 0 8,000 7,945
[INSERT NAME]
</TABLE>
- ---------------
(1) Smucker's Restricted Stock Bonus Plan was implemented in 1981 and the 1998
Equity and Performance Incentive Plan was implemented in 1998. Restricted
shares awarded under the plans are entitled to dividends at the same rate
and on the same terms as unrestricted shares of the same class. The
aggregate number and value of restricted shares held by the individuals
listed above, valued as of April 30, 2000 are as follows: Tim Smucker,
12,500 Class A and 12,500 Class B common shares ($ ); Richard
Smucker, Class A and Class B common shares
($ ); Fred A. Duncan, 4,000 Class A and 4,000 Class B common shares
($ ); Vincent C. Byrd, 4,000 Class A and 4,000 Class B common
shares ($ ); and , Class A and Class
B common shares ($ ).
(2) Of the options awarded, one-half are for Class A common shares and one-half
are for Class B common shares. After the combination, all options will be
for common shares. Smucker does not award stock appreciation rights (SARs).
(3) These amounts represent contributions by Smucker on behalf of the individual
indicated under Smucker's 401(k) Savings Plan and the value of allocations
during the year under Smucker's Employee Stock Ownership Plan. The specific
breakdown for each individual, with 401(k) amounts first, followed by ESOP
allocations, is as follows: Tim Smucker, $ and $ ; Richard
Smucker, $ and $ ; Fred A. Duncan, $ and
$ ; Vincent C. Byrd, $ and $ ; and ,
$ and $ .
49
<PAGE> 55
STOCK OPTIONS
The following table summarizes options granted during fiscal 2000 to the
officers listed in the Summary Compensation Table under Smucker's 1987 Stock
Option Plan and/or the 1998 Equity and Performance Incentive Plan.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
----------------------------------------------------- ------------------------------
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED(#) FISCAL YEAR PRICE ($/SH) DATE 0% 5% 10%
- ---- ---------- ------------ ------------ ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tim Smucker.......... Class A
Class B
Richard Smucker...... Class A
Class B
Fred A. Duncan....... Class A
Class B
Vincent C. Byrd...... Class A
Class B
[INSERT NAME]
</TABLE>
- ---------------
(1) No option granted is transferable except by will or the laws of descent and
distribution. Options are exercisable to the extent of one-third of the
shares covered by the option after the optionee has been in the continuous
employ of Smucker or one of its subsidiaries for one full year from the date
of grant, and to the extent of an additional one-third after each of the
next two years of continuous employment. Options also become immediately
exercisable upon the occurrence of certain events related to a change of
control of Smucker.
Options exercised by the officers listed in the preceding table during the
2000 fiscal year, along with the number of unexercised options held by such
officers at fiscal year-end and the value of their unexercised, in-the-money
options, are set forth in the following table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
Tim Smucker................... Class A
Class B
Richard Smucker............... Class A
Class B
Fred A. Duncan................ Class A
Class B
Vincent C. Byrd............... Class A
Class B
[INSERT NAME]
</TABLE>
50
<PAGE> 56
PENSION PLAN
Under The J. M. Smucker Company Employees' Retirement Plan, retirement
benefits are payable to all eligible employees of Smucker and its subsidiaries,
including officers. The present executive officers of Smucker, including those
named in the Summary Compensation Table, are also eligible upon retirement to
receive a benefit from a nonqualified supplemental retirement plan. The amounts
set forth in the pension plan table below assume participation in the
supplemental plan and set forth the estimated annual benefit, computed as a
straight-life annuity, payable under The J. M. Smucker Company Employees'
Retirement Plan, as amended, at normal retirement (age 65):
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $ 29,500 $ 45,500 $ 51,500 $ 51,500 $ 51,500
150,000 39,000 58,000 65,500 65,500 65,500
175,000 48,500 70,500 79,000 79,000 79,000
200,000 58,000 83,000 93,000 93,000 93,000
225,000 67,000 95,500 106,500 106,500 106,500
250,000 76,500 108,000 120,500 120,500 120,500
300,000 95,500 133,000 148,000 148,000 148,000
400,000 133,000 183,000 203,000 203,000 203,000
450,000 151,500 208,000 230,500 230,500 230,500
500,000 170,000 233,000 258,000 258,000 258,000
650,000 226,500 308,000 340,500 340,500 340,500
800,000 283,000 383,000 423,000 423,000 423,000
</TABLE>
The retirement plan provides a pension based upon years of service with
Smucker and upon final average pay (average base compensation [i.e., salary
only] for the five highest consecutive years during the last ten years of
employment). Benefits under the retirement plan are computed by adding (i) the
product of one percent of final average pay up to $30,000 annually times the
participant's years of service with Smucker, plus (ii) the product of one-half
percent of final average pay in excess of $30,000 annually times the
participant's years of service with Smucker. Benefits under the supplemental
plan at retirement, based upon years of service (maximum 25 years), are 55% of
the average total compensation (i.e., all compensation including salary and
bonus) for the five highest consecutive years of employment, offset by the
benefits derived from the retirement plan and by 100% of the Social Security
benefit.
Messrs. Tim Smucker, Richard Smucker, Fred A. Duncan, Vincent C. Byrd, and
were credited under the retirement plan with 30, 27, 22, 23, and
full years of benefit service at April 30, 2000.
51
<PAGE> 57
THE FOLLOWING TOTAL SHAREHOLDER RETURN GRAPH SHALL NOT BE DEEMED FILED FOR
PURPOSES OF THE SECURITIES ACT OF 1933 OR THE SECURITIES AND EXCHANGE ACT OF
1934, NOR SHALL IT BE DEEMED TO BE SOLICITING MATERIAL OR INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS DOCUMENT INTO
ANY FILINGS OF SMUCKER PURSUANT TO EITHER ACT, EXCEPT TO THE EXTENT SMUCKER
SPECIFICALLY INCORPORATES THE GRAPH BY REFERENCE THEREIN.
TOTAL SHAREHOLDER RETURN GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN* APRIL 1995 THROUGH APRIL 2000
[GRAPH]
<TABLE>
<CAPTION>
J. M. SMUCKER
COMPANY S&P 500 S&P FOODS INDEX MID-CAP FOOD
------------- ------- --------------- ------------
<S> <C> <C> <C> <C>
4/95 100.00 100.00 100.00 100.00
4/96
4/97
4/98
4/99
4/00
</TABLE>
- ---------------
* Total return assumes reinvestment of dividends on a quarterly basis.
52
<PAGE> 58
OWNERSHIP OF COMMON SHARES
Tim Smucker, Richard Smucker, and H. Reid Wagstaff, Strawberry Lane,
Orrville, Ohio 44667, and Andros S.A., a French corporation, BP1, 46131 Biars
sur Cere, France, are the only persons known to Smucker to be beneficial owners
of more than five percent of Smucker's Class A common shares outstanding at
April 30, 2000. Tim Smucker, Richard Smucker, and H. Reid Wagstaff, Strawberry
Lane, Orrville, Ohio 44667, are the only persons known to Smucker to be the
beneficial owners of more than five percent of Smucker's Class B common shares
outstanding at April 30, 2000. For purposes of this section, "beneficial
ownership" is used as defined under the securities laws. That definition has not
been used to calculate the ownership percentages included elsewhere in this
document, which are based solely on outstanding shares. The number and percent
of the shares beneficially owned at that date by them, as well as those so owned
by each director of Smucker, by each executive officer of Smucker, and by each
director and executive officer of JMS-Ohio, is set forth below. Each of the
individuals shown has sole voting and investment power with respect to the
shares reflected in the table, except as otherwise indicated. Shares shown as
beneficially owned include those that may be held either individually, jointly,
or under a trust arrangement.
<TABLE>
<CAPTION>
CLASS A COMMON SHARES CLASS B COMMON SHARES
---------------------------- ----------------------------
NO. OF SHARES PERCENT OF NO. OF SHARES PERCENT OF
BENEFICIALLY OUTSTANDING BENEFICIALLY OUTSTANDING
OWNED SHARES(4) OWNED SHARES
------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Tim Smucker(1)(2)......................... 1,712,810 12.0% 1,515,862 10.7%
Richard Smucker(1)(2)..................... 1,239,231 8.6% 1,059,129 7.5%
Andros S.A.(3)............................ 1,108,500 7.6% -- --
Mark R. Belgya(2)......................... 5,907 * 5,163 *
Vincent C. Byrd(2)........................ 43,082 .3% 27,114 .2%
Kathryn W. Dindo(5)....................... 10,604 * -- --
K. Edwin Dountz(2)........................ 47,513 .3% 30,141 .2%
Fred A. Duncan(2)......................... 61,991 .4% 39,159 .3%
Steven J. Ellcessor(1)(2)................. 41,083 .3% 26,311 .2%
Robert E. Ellis(2)........................ 38,287 .3% 20,992 .1%
Richard G. Jirsa(1)(2).................... 47,405 .3% 28,005 .2%
Elizabeth Valk Long(5).................... 6,365 * -- --
Eloise L. Mackus(2)....................... 5,101 * 4,437 *
Russell G. Mawby(5)....................... 17,088 * 4,200 *
Charles S. Mechem, Jr.(5)................. 12,118 * 1,620 *
John D. Milliken(2)....................... 72,581 .5% 33,700 .2%
Steven T. Oakland(2)...................... 7,479 * 5,307 *
William H. Steinbrink(5).................. 14,391 * -- --
Benjamin B. Tregoe, Jr.(5)................ 14,024 * 6,198 *
Richard F. Troyak(2)...................... 26,694 .2 16,583 .1
H. Reid Wagstaff(1)(2).................... 722,907 5.0% 661,723 5.0%
William Wrigley, Jr.(5)................... 11,595 * -- --
21 directors and executive officers as a
group(2)................................ 3,030,238 20.0% 2,410,716 16.7%
</TABLE>
- ---------------
* Less than .1%.
(1) Beneficial ownership of the following shares included in the table is
disclaimed by Richard Smucker: 765,860 Class A common shares and 726,020
Class B common shares held by trusts for the benefit of family members
(including Tim Smucker) of which Richard Smucker is either trustee with sole
investment power or co-trustee with shared investment power; 106,900 Class A
common shares and 106,900 Class B common shares owned by the Willard E.
Smucker Foundation of which Richard Smucker is a trustee with shared
investment power; and 54,320 Class A common shares and 54,316 Class B common
shares with respect to which Richard Smucker disclaims voting or investment
power.
53
<PAGE> 59
Beneficial ownership of the following shares included in the table is
disclaimed by Tim Smucker: 1,024,635 Class A common shares and 997,203 Class
B common shares held by trusts for the benefit of family members of which
Tim Smucker is a trustee with sole investment power or a co-trustee with
shared investment power; 106,900 Class A common shares and 106,900 Class B
common shares owned by the Willard E. Smucker Foundation of which Tim
Smucker is a trustee with shared investment power; and 34,138 Class A common
shares and 33,719 Class B common shares with respect to which Tim Smucker
disclaims voting or investment power.
Beneficial ownership of the following shares included in the table is
disclaimed by H. Reid Wagstaff: 510,574 Class A common shares and 484,014
Class B common shares held by trusts for the benefit of family members
(including Tim Smucker) of which H. Reid Wagstaff's spouse is a co-trustee
with shared investment power; and 133,151 Class A common shares and 126,05
Class B common shares with respect to which H. Reid Wagstaff disclaims
voting or investment power.
Beneficial ownership of shares included in the table are disclaimed by
Steven J. Ellcessor: 584 Class A common shares; and Richard G. Jirsa: 1,500
Class A common shares and 1,500 Class B common shares.
The number of shares beneficially owned by all directors and officers as a
group has been computed to eliminate duplication of beneficial ownership.
(2) Includes shares covered by outstanding options exercisable within 60 days,
as follows: Tim Smucker, 130,000 Class A and 71,500 Class B common shares;
Richard Smucker, 130,000 Class A and 71,500 Class B common shares; Mark R.
Belgya, 3,333 Class A and 3,333 Class B common shares; Vincent C. Byrd,
31,333 Class A and 20,333 Class B common shares; K. Edwin Dountz, 24,666
Class A and 12,666 Class B common shares; Fred A. Duncan, 31,333 Class A and
20,333 Class B common shares; Steven J. Ellcessor, 29,833 Class A and 18,833
Class B common shares; Robert E. Ellis, 22,566 Class A and 15,166 Class B
common shares; Richard G. Jirsa, 27,333 Class A and 16,333 Class B common
shares; Eloise L. Mackus, 2,665 Class A and 2,665 Class B common shares;
John D. Milliken, 40,500 Class A and 22,500 Class B common shares; Steven T.
Oakland, 4,166 Class A and 3,166 Class B common shares; Richard F. Troyak,
20,233 Class A and 13,833 Class B common shares; H. Reid Wagstaff, 47,166
Class A and 36,166 Class B common shares; and all directors and executive
officers as a group, 545,127 Class A and 328,327 Class B common shares.
(3) According to a Schedule 13G/A of Andros et Cie dated February 9, 2000,
Andros S.A. is a stock corporation organized under the laws of the French
Republic and is a wholly owned subsidiary of Andros et Cie, a close stock
corporation organized under the laws of the French Republic. As of December
31, 1999, Andros et Cie had sole voting and dispositive power of 1,108,500
Class A common shares. Andros et Cie has not reported its ownership of Class
B common shares, if any.
(4) Because under Smucker's Amended Articles of Incorporation shareholders may
be entitled to cast ten votes per share with regard to certain Class A
common shares and only one vote per share with regard to others, there may
not be a correlation between the percent of outstanding Class A common
shares owned and the voting power represented by those shares. The total
voting power of all the Class A common shares can be determined only at the
time of a shareholder meeting due to the need to obtain certifications as to
beneficial ownership on shares not held as of record in the names of
individuals. Based on the calculation of total voting power as of the 1999
annual meeting, the Class A common shares shown in the above table as owned
by the directors and officers as a group would represent approximately 35%
of Smucker's total voting power. No individual named in the above table
would be able to cast votes representing more than one-tenth of one percent
of the total voting power except Tim Smucker (23%), Richard Smucker (16%),
Vincent C. Byrd (.16%), Kenneth E. Dountz (.2%), Fred A. Duncan (.4%),
Steven J. Ellcessor (.16%), Robert E. Ellis (.2%), Richard G. Jirsa (.3%),
John D. Milliken (.4%), and H. Reid Wagstaff (10%).
The voting power of Tim Smucker and Richard Smucker includes some
duplication with respect to entities for which they are co-trustees and the
voting power of H. Reid Wagstaff includes some duplication with respect to
entities for which his spouse is a trustee or co-trustee. (see footnote 1,
above).
54
<PAGE> 60
The voting power of all directors and officers as a group has been computed
to eliminate duplication of beneficial ownership.
(5) Includes Class A common shares held for the benefit of the individual named
under the terms of Smucker's Nonemployee Directors Stock Plan, as follows:
Elizabeth Valk Long, 5,365 shares; Kathryn W. Dindo, 9,054; Russell G.
Mawby, 12,888 shares; Charles S. Mechem, Jr., 10,498 shares; William H.
Steinbrink, 12,380 shares; Benjamin B. Tregoe, Jr., 12,612 shares; and
William Wrigley, Jr., 10,383 shares. The shares indicated are held in trust
for the directors named and are voted pursuant to their direction.
Smucker has entered into agreements with Tim Smucker and Richard Smucker
and members of their immediate families, including their mother, Mrs. Paul H.
Smucker, with Mrs. H. Ray Clark, Tim Smucker and Richard Smucker's aunt, and
members of her immediate family, and with all executive officers of Smucker
relating to the disposition of common shares held by them. These shareholders
are the beneficial owners of an aggregate of 4,088,254 Class A common shares,
approximately 28% of the class, and 3,415,023 Class B common shares,
approximately 24% of the class, of which 2,944,053 Class A and 2,398,698 Class B
common shares are included in the above table. Under the agreements, which have
no expiration date, Smucker has a purchase option with respect to any proposed
transfers of these common shares, except for gifts and bequests to or for the
benefit of family members, and sales pursuant to any offer, merger, or similar
transaction that is approved or recommended by Smucker's board of directors.
The agreements provide that Smucker may assign its purchase rights to
Smucker's ESOP or any of its other employee benefit plans. The agreements
reflect the practice followed by Smucker for a number of years of providing for
the purchase of common shares at prices at or somewhat below market with the
effect of establishing a method for the orderly disposition of blocks of shares
that could not otherwise be readily absorbed by the public market. The shares so
acquired by Smucker have generally been used for purposes of Smucker employee
benefit plans, and shares have also been so acquired directly by the ESOP.
RECENT TRANSACTIONS IN SECURITIES
There have been no transactions in the Class A or Class B common shares
during the past 60 days by Smucker, JMS-Ohio, or any director or executive
officer of Smucker or JMS-Ohio.
The following table sets forth all transactions in Class A and/or Class B
common shares by The J. M. Smucker Employee Savings Plan for the past 60 days.
All transactions were in or to the open market.
<TABLE>
<CAPTION>
CLASS A COMMON SHARES CLASS B COMMON SHARES
----------------------------- -----------------------------
NUMBER OF SHARES PRICE NUMBER OF SHARES PRICE
TRANSACTION DATE PURCHASED(SOLD) PER SHARE PURCHASED(SOLD) PER SHARE
- ---------------- ---------------- --------- ---------------- ---------
<S> <C> <C> <C> <C>
March 1, 2000......................... 3,014 $17.42 -- --
March 6, 2000......................... -- -- 499 $14.63
March 9, 2000......................... (26) $16.63 (4) $13.69
March 10, 2000........................ 5,821 $16.69 -- --
March 20, 2000........................ (3,474) $16.50 (480) $13.50
April 10, 2000........................ 2,200 $16.57 -- --
April 11, 2000........................ 1,600 $16.47 -- --
April 12, 2000........................ 2,115 $17.00 -- --
April 19, 2000........................ (1,900) $15.88 (463) $13.00
</TABLE>
55
<PAGE> 61
The following table sets forth all transactions in Class A and/or Class B
common shares by The J. M. Smucker Employee Stock Ownership Plan for the past 60
days. All transactions were in or to the open market.
<TABLE>
<CAPTION>
CLASS A COMMON SHARES CLASS B COMMON SHARES
----------------------------- -----------------------------
NUMBER OF SHARES PRICE NUMBER OF SHARES PRICE
TRANSACTION DATE PURCHASED(SOLD) PER SHARE PURCHASED(SOLD) PER SHARE
- ---------------- ---------------- --------- ---------------- ---------
<S> <C> <C> <C> <C>
March 6, 2000......................... (3,419) $16.44 (1,290) $13.88
699 $16.53 1,290 $13.88
March 7, 2000......................... 3,176 $16.50 1 $13.88
-- -- 308 $13.88
March 13, 2000........................ (12) $16.50 -- --
March 16, 2000........................ (3,766) $16.81 (1,598) $13.63
April 13, 2000........................ (841) $16.31 (220) $12.88
April 20, 2000........................ (878) $16.19 (153) $13.50
</TABLE>
The following table sets forth all transactions in the Class A common
shares by the Orrville Represented Savings Plan for the past 60 days. All
transactions were to or in the open market.
<TABLE>
<CAPTION>
CLASS A COMMON SHARES
-----------------------------
NUMBER OF SHARES PRICE
TRANSACTION DATE PURCHASED(SOLD) PER SHARE
- ---------------- ---------------- ---------
<S> <C> <C> <C> <C>
March 1, 2000......................... 83 $17.42
March 6, 2000......................... 601 $16.53
April 12, 2000........................ 694 $17.00
April 19, 2000........................ (27) $15.88
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the U.S. securities laws, Smucker's directors and executive officers
are required to report their initial ownership of common shares and any
subsequent changes in that ownership to the Securities and Exchange Commission
and the New York Stock Exchange. Due dates for the reports are specified by
those laws, and Smucker is required to disclose in this document any failure in
the past year to file by the required dates. Based solely on written
representations of our directors and executive officers and on copies of the
reports that they have filed with the Securities and Exchange Commission, our
belief is that all of our directors and executive officers complied with all
filing requirements applicable to them with respect to transactions in our
equity securities during fiscal 2000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 3 ON PROXY)
Ernst & Young LLP has been appointed as Smucker's independent auditors for
the fiscal year ending April 30, 2001, subject to ratification by the
shareholders. Ernst & Young LLP has served as Smucker's independent auditors
since 1955.
A representative of Ernst & Young LLP is expected to be present at the
meeting with an opportunity to make a statement if so desired and to respond to
appropriate questions with respect to that firm's examination of Smucker's
financial statements and records for the fiscal year ended April 30, 2000.
In the event of a negative vote on ratification, the selection will be
reconsidered.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
56
<PAGE> 62
LEGAL MATTERS
Jones, Day, Reavis & Pogue will pass upon the validity of the issuance of
the new common shares to be issued under this proxy statement/prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and financial schedule included in our Annual Report on
Form 10-K for the year ended April 30, 1999, as set forth in their reports,
which are incorporated by reference in this document. Our financial statements
and schedule are included or incorporated by reference in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
ANNUAL REPORT
The Annual Report of Smucker for the fiscal year ended April 30, 2000, was
mailed to each shareholder on or about July , 2000.
2001 SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the proxy statement for next year's annual meeting of shareholders
is expected to be March 16, 2001.
OTHER MATTERS
We do not know of any matters to be brought before the meeting except as
indicated in the notice. However, if any other matters properly come before the
meeting for action of which we did not have notice of on or prior to March 16,
2000, or that applicable laws otherwise permit proxies to vote on a
discretionary basis, it is intended that the person authorized under solicited
proxies may vote or act thereon in accordance with his or her own judgment.
VOTING RIGHTS OF COMMON SHARES
Class A common shares generally entitle the holders thereof to vote on all
matters properly submitted to the shareholders of Smucker. Class B common shares
have no voting rights, except as otherwise required under Ohio law in certain
limited circumstances. These circumstances include approval of the combination
of the Class A and Class B common shares.
Smucker's current articles of incorporation generally provide that each
Class A common share entitles the holder thereof to ten votes on each matter to
be considered at any meeting of shareholders, except that no holder is entitled
to exercise more than one vote on any matter in respect of any Class A common
share with respect to which there has been a change in beneficial ownership
during the four years immediately preceding the record date for the meeting.
Thus, after a person or group of persons having beneficial ownership of
specified Class A common shares sells the shares or otherwise transfers their
beneficial ownership, the new holder of those shares generally will be entitled
to one vote per share until the shares have been held without any further change
in beneficial ownership for four years. At the expiration of that four-year
period, the shareholder then will become entitled to ten votes per Class A
common share, provided that no further changes in beneficial ownership occur and
other applicable conditions are satisfied.
The express terms of the Class A common shares provide that a change in
beneficial ownership occurs whenever any change occurs in the person or group of
persons who has or shares voting power, investment power, the right to receive
sale proceeds, or the right to receive dividends or other distributions in
respect of those Class A common shares. In the absence of proof to the contrary,
a change in beneficial ownership will be deemed to have occurred whenever Class
A common shares are transferred of record into the name of any
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<PAGE> 63
other person. Moreover, corporations, general partnerships, limited
partnerships, voting trustees, banks, brokers, nominees, and clearing agencies
will be entitled to only one vote per share on Class A common shares held of
record in their respective names unless proof is provided to establish that
there has been no change in the person or persons who direct the exercise of any
of the rights of beneficial ownership. Thus, shareholders who hold Class A
common shares in "street" name or through any of the other indirect methods
mentioned above must submit proof of beneficial ownership to Smucker's transfer
agent in order to be entitled to exercise ten votes per share. See "Confirmation
of Beneficial Ownership."
The foregoing is merely a summary of the voting terms of the common shares
and should be read in conjunction with, and is qualified in its entirety by
reference to, the express terms of those common shares as set forth in Smucker's
current articles of incorporation. A copy of the pertinent portions of those
express terms is provided with this document to "street name" and other indirect
holders and is available upon request to any other shareholder.
CONFIRMATION OF BENEFICIAL OWNERSHIP
To assure that your Class A and/or Class B common shares will be
represented at the meeting, please complete, sign, and return the enclosed proxy
card(s) in the envelope provided for that purpose whether or not you expect to
attend.
As indicated on page 10 of this document and under "Voting Rights of Common
Shares," immediately above the number of votes that each holder of Class A
common shares will be entitled to cast at the meeting will depend on whether or
not there has been a change in beneficial ownership with respect to each of such
holder's Class A common shares during the four years preceding the record date
of July 3, 2000. Smucker has developed procedures regarding the proof that will
be required for determinations of beneficial ownership. Specifically, Class A
common shares held of record in the names of banks, brokers, nominees, and
certain other entities are covered by special proxy cards. Those proxy cards
have been provided to the record holders for completion by the beneficial
owners. The beneficial owner cards include a form of certification as to changes
in beneficial ownership. If that certification is not completed, a change in
beneficial ownership will be deemed to have occurred with respect to all the
Class A common shares covered thereby, so that the holder will be entitled to
only one vote per share for all of those shares. Class B common shares will be
entitled to one vote per share on the adoption of the merger agreement and will
not be entitled to vote on any other matters discussed in this document.
WHERE YOU CAN FIND MORE INFORMATION
Smucker files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information we file at the Securities and
Exchange Commission's public reference rooms at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as at the Securities and Exchange
Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials may also be obtained from the Securities and Exchange
Commission at prescribed rates by writing the Public Reference Section of the
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference rooms. Our filings are also
available to the public from commercial document retrieval services and, on a
delayed basis, at the web site maintained by the Securities and Exchange
Commission at http://www.sec.gov.
The Securities and Exchange Commission permits us to "incorporate by
reference" information into this document, which means that we can disclose
important information to you by referring you to another document filed
separately with the Securities and Exchange Commission by Smucker. The
information in the
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following documents filed by Smucker with the Securities and Exchange Commission
(File No. 001-05111) is incorporated by reference into this document:
- Annual Report on Form 10-K for the fiscal year ended April 30, 1999,
dated and filed with the Commission on July 23, 1999;
- Quarterly Report on Form 10-Q for the quarter ended July 31, 1999, dated
and filed with the Commission on September 10, 1999;
- Quarterly Report on Form 10-Q for the quarter ended October 31, 1999,
dated and filed with the Commission on December 13, 1999; and
- Quarterly Report on Form 10-Q for the quarter ended January 31, 2000,
dated and filed with the Commission on March 15, 2000.
Smucker may be required by the Securities and Exchange Commission to file
other documents pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 between the time this document is sent and the date of the
annual meeting. These documents will be deemed to be incorporated by reference
in this document and to be a part of it from the date they are filed with the
Securities and Exchange Commission.
If you are a shareholder, you can obtain any of the documents incorporated
by reference through us or the Securities and Exchange Commission. Documents
incorporated by reference are available from us without charge, excluding all
exhibits unless we have specifically incorporated an exhibit by reference in
this document. You may obtain documents incorporated by reference in this
document by requesting them in writing or by telephone from:
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attn: Joan Custer, Office of the Corporate Secretary
Telephone: (330) 684-3000
IF YOU WOULD LIKE TO REQUEST DOCUMENTS FROM US, PLEASE DO SO BY AUGUST 8,
2000 IN ORDER TO RECEIVE THEM BEFORE THE ANNUAL MEETING.
You should rely only on the information contained or incorporated by
reference in this document as being information authorized by us. We have not
authorized anyone to provide you with information that is different from what is
contained in this document. This document is dated July , 2000. You should not
assume that the information contained in this document is accurate as of any
date other than such date and neither the mailing of this document to you nor
the issuance of the new common shares in the combination shall create any
implication to the contrary. This document does not constitute an offer to sell
or the solicitation of an offer to buy to anyone in any jurisdiction where the
solicitation or offer is not authorized or the person making the offer or
solicitation is not qualified to do so. Further, this document does not
constitute an offer or solicitation to anyone to whom it is unlawful to make
such offer or solicitation.
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
This document includes forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially,
including the uncertainties relating the actual liquidity of Smucker's shares,
Smucker's operating performance, other factors affecting share prices, the
number of shares repurchased in the buyback, and factors affecting the capital
markets generally. Actual results may differ depending on a number of factors
including:
- the success of Smucker's marketing programs during the year;
- competitive activity;
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- the mix of products sold and level of marketing expenditures needed to
generate sales;
- an increase in fruit costs or costs of other significant ingredients,
including sweeteners;
- the ability of Smucker to maintain and/or improve sales and earnings
performance of its non-retail business areas;
- foreign currency exchange and interest rate fluctuations;
- the level of capital resources required for and success of future
acquisitions; and
- the successful implementation of Smucker's information technology
reengineering project.
Smucker undertakes no obligation to update or revise forward-looking statements
to reflect changes in assumptions, the occurrence of unanticipated events, or
changes in future operating results over time.
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ANNEX A
AGREEMENT OF MERGER
Agreement of Merger (this "Agreement"), dated as of , 2000, by
and between The J. M. Smucker Company, an Ohio corporation ("Smucker"), and
JMS-Ohio, Inc., an Ohio corporation ("JMS-Ohio"). Smucker and JMS-Ohio are
sometimes collectively referred to in this Agreement as the "Constituent
Corporations."
RECITALS:
A. The authorized capital stock of JMS-Ohio consists of 850 shares of
common stock, without par value (each, a "JMS-Ohio Share"), and all JMS-Ohio
Shares issued and outstanding are owned by Smucker.
B. Smucker, as the sole shareholder of JMS-Ohio, desires to effect a merger
(the "Merger") of JMS-Ohio with and into Smucker pursuant to the provisions of
the Ohio Revised Code (the "ORC") on the terms and conditions provided in this
Agreement.
C. The Directors of JMS-Ohio have determined that the Merger is advisable
and in the best interests of Smucker and have, by resolutions duly adopted,
approved this Agreement and directed that it be executed by the undersigned
officers.
D. The Directors of Smucker have determined the Merger is advisable and in
the best interests of JMS-Ohio and have, by resolutions duly adopted, approved
this Agreement and directed that it be executed by the undersigned officers and
submitted to a vote of the shareholders of Smucker.
AGREEMENT:
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, JMS-Ohio and Smucker hereby agree that JMS-Ohio
shall be merged with and into Smucker and that the terms and conditions of the
Merger, the mode of carrying the Merger into effect, the manner of converting
the shares of the Constituent Corporations and certain other provisions relating
thereto shall be as set forth in this Agreement.
ARTICLE I
DEFINITIONS
The following terms have the following meanings when used in this
Agreement:
"Agreement" has the meaning set forth in the Preamble.
"Cash Consideration" means the Class A Cash Consideration, together with
the Class B Cash Consideration.
"Certificate" has the meaning set forth in Section 3.02(b).
"Class A Cash Consideration" has the meaning set forth in Section
3.01(b)(i).
"Class A Merger Consideration" has the meaning set forth in Section
3.01(b)(ii).
"Class A Share Consideration" has the meaning set forth in Section
3.01(b)(i).
"Class A Shares" means the Class A common shares, without par value, of
Smucker.
"Class B Cash Consideration" has the meaning set forth in Section
3.01(c)(i).
"Class B Merger Consideration" has the meaning set forth in Section
3.01(c)(ii).
"Class B Share Consideration" has the meaning set forth in Section
3.01(c)(i).
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"Class B Shares" means the Class B common shares, without par value, of
Smucker.
"Constituent Corporations" has the meaning set forth in the Preamble.
"Dissenting Class A Shares" means Class A Shares held by Persons
("Dissenting Class A Shareholders") that have properly exercised appraisal
rights pursuant to Section 1701.85 of the ORC with respect to such Class A
Shares.
"Dissenting Class B Shares" means Class B Shares held by Persons
("Dissenting Class B Shareholders") that have properly exercised appraisal
rights pursuant to Section 1701.85 of the ORC with respect to such Class B
Shares.
"Dissenting Shareholders" means the Dissenting Class A Shareholders,
together with the Dissenting Class B Shareholders.
"Dissenting Smucker Shares" means the Dissenting Class A Shares, together
with the Dissenting Class B Shares.
"Effective Time" has the meaning set forth in Section 2.07.
"Electing Class A Shares" has the meaning set forth in Section 3.01(b)(i).
"Electing Class B Shares" has the meaning set forth in Section 3.01(c)(i).
"Electing Shares" has the meaning set forth in Section 3.01(c)(i).
"Exchange Fund" has the meaning set forth in Section 3.02(a).
"Form of Election" has the meaning set forth in Section 3.01(d).
"JMS-Ohio" has the meaning set forth in the Preamble.
"JMS-Ohio Share" has the meaning set forth in the Recitals.
"Maximum Cash Shares" has the meaning set forth in Section 3.01(e).
"Merger" has the meaning set forth in the Recitals.
"Merger Consideration" means the Class A Merger Consideration, together
with the Class B Merger Consideration.
"Non-Electing Class A Share" has the meaning set forth in Section
3.01(c)(ii).
"Non-Electing Class B Share" has the meaning set forth in Section
3.01(c)(ii).
"Non-Electing Share" has the meaning set forth in Section 3.01(c)(ii).
"NYSE" means the New York Stock Exchange, Inc.
"ORC" has the meaning set forth in the Recitals.
"Paying Agent" has the meaning set forth in Section 3.02(a).
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
"Proxy Statement" means the Smucker proxy statement relating to the Smucker
Shareholder Meeting, as amended or supplemented from time to time.
"Share Consideration" means the Class A Share Consideration, together with
the Class B Share Consideration.
"Smucker" has the meaning set forth in the Preamble.
"Smucker Shares" means the Class A Shares, together with the Class B
Shares.
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"Smucker Shareholder Meeting" means a meeting of the holders of Smucker
Shares held for the purpose of obtaining such shareholders' (i) approval of the
Merger and the other transactions contemplated by this Agreement and (ii)
adoption of this Agreement.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Surviving Corporation Common Shares" means the shares of common stock,
without par value, of the Surviving Corporation.
ARTICLE II
THE MERGER
2.01 Surviving Corporation. Subject to the terms and provisions of this
Agreement and in accordance with the ORC, at the Effective Time, JMS-Ohio shall
be merged with and into Smucker. Smucker shall be the surviving corporation of
the Merger (the "Surviving Corporation") and, following the Effective Time,
shall continue its corporate existence under the laws of the State of Ohio. At
the Effective Time, the separate corporate existence of JMS-Ohio shall cease.
2.02 Effects of the Merger. At the Effective Time, the Merger shall have
the effects provided for in this Agreement and in sec. 1701.82 of the ORC.
2.03 Articles of Incorporation. As of the Effective Time, the Articles of
Incorporation attached hereto as Annex A shall become the Articles of
Incorporation of the Surviving Corporation until thereafter duly altered,
amended or repealed in accordance with the provisions thereof and applicable
law.
2.04 Regulations. As of the Effective Time, the Regulations attached
hereto as Annex B shall become the Regulations of the Surviving Corporation
until thereafter duly altered, amended or repealed in accordance with the
provisions thereof, the Articles of Incorporation of the Surviving Corporation
and applicable law.
2.05 Directors of the Surviving Corporation. As of the Effective Time,
each person that is a Director of Smucker immediately prior to the Effective
Time shall become a Director of the Surviving Corporation and each such person
shall serve as a Director of the Surviving Corporation for the balance of the
term for which such person was elected a Director of Smucker and until his or
her successor is duly elected and qualified in the manner provided in the
Regulations and the Articles of Incorporation of the Surviving Corporation or as
otherwise provided by law, or until his or her earlier death, resignation or
removal in the manner provided in the Regulations and the Articles of
Incorporation of the Surviving Corporation or as otherwise provided by law.
JMS-Ohio shall secure the resignation as Director, effective as of the Effective
Time, of each person that is a Director of JMS-Ohio immediately prior to the
Effective Time.
2.06 Officers of the Surviving Corporation. As of the Effective Time, each
person that is an officer of Smucker immediately prior to the Effective Time
shall become an officer of the Surviving Corporation, with each such person to
hold the same office in the Surviving Corporation, in accordance with the
Regulations thereof, as he or she held in Smucker immediately prior to the
Effective Time. JMS-Ohio shall secure the resignation, effective as of the
Effective Time, of each person that is an officer of JMS-Ohio immediately prior
to the Effective Time, except such officers that hold the same positions with
JMS-Ohio as they do with Smucker.
2.07 Effective Time. The Merger shall become effective in accordance with
the provisions of sec. 1701.81 of the ORC upon the completion of the filing of a
certificate of merger with the Secretary of State of the State of Ohio. The date
and time when the Merger shall become effective is referred to in this Agreement
as the "Effective Time."
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ARTICLE III
MANNER, BASIS AND EFFECT OF CONVERTING SHARES
3.01 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any Smucker Shares or
JMS-Ohio Shares:
(a) Conversion of JMS-Ohio Shares. Each JMS-Ohio Share issued and
outstanding or held by JMS-Ohio as treasury stock immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect
thereto.
(b) Conversion of Class A Shares.
(i) Electing Class A Shares. Subject to Sections 3.01(e) and
3.01(f), each Class A Share outstanding immediately prior to the
Effective Time with respect to which a Form of Election has been
properly made and not revoked pursuant to Section 3.01(d) (such Class A
Shares with respect to which a Form of Election is duly made being
referred to as "Electing Class A Shares") will, at the Effective Time,
be converted into $18.50 in cash (the "Class A Cash Consideration").
(ii) Non-Electing Class A Shares. Each Class A Share (A)
outstanding immediately prior to the Effective Time other than Electing
Class A Shares and Dissenting Class A Shares (each such Class A Share
being referred to as a "Non-Electing Class A Share") or (B) owned by
Smucker or by any wholly owned subsidiary of Smucker, and any Electing
Class A Shares subject to proration pursuant to Section 3.01(f), will,
at the Effective Time, be converted into one fully paid and non-
assessable Surviving Corporation Common Share (the "Class A Share
Consideration" and, together with the Class A Cash Consideration, the
"Class A Merger Consideration").
(c) Conversion of Class B Shares.
(i) Electing Class B Shares. Subject to Sections 3.01(e) and
3.01(f), each Class B Share outstanding immediately prior to the
Effective Time with respect to which a Form of Election has been
properly made and not revoked pursuant to Section 3.01(d) (such Class B
Shares with respect to which a Form of Election is duly made being
referred to as "Electing Class B Shares", and together with the Electing
Class A Shares, the "Electing Shares") will, at the Effective Time, be
converted into $18.50 in cash (the "Class B Cash Consideration").
(ii) Non-Electing Class B Shares. Each Class B Share (A)
outstanding immediately prior to the Effective Time other than Electing
Class B Shares and Dissenting Class B Shares (each such Class B Share
being referred to as a "Non-Electing Class B Share", and together with
the Non-Electing Class A Shares, the "Non-Electing Shares") or (B) owned
by Smucker or by any wholly owned subsidiary of Smucker, and any
Electing Class B Shares subject to proration pursuant to Section
3.01(f), will, at the Effective Time, be converted into one fully paid
and non-assessable Surviving Corporation Common Share (the "Class B
Share Consideration", and, together with the Class B Cash Consideration,
the "Class B Merger Consideration").
(d) Form of Election. Smucker will mail a form of election to receive
Cash Consideration (a "Form of Election") to holders of record of Smucker
Shares as of the record date of the Smucker Shareholder Meeting. In
addition, Smucker will use its reasonable best efforts to make the Form of
Election and Proxy Statement available to all persons who become holders of
Smucker Shares during the period between such record date and the Smucker
Shareholder Meeting. Any election to receive the Cash Consideration
contemplated by Section 3.01(b)(i) or Section 3.01(c)(i) shall have been
properly made only if the Paying Agent shall have received at its
designated office or offices, by 5:00 p.m. New York City time, on the last
business day preceding the date of the Smucker Shareholder Meeting, a Form
of Election properly completed and accompanied by Certificates for the
Smucker Shares to which such Form of Election relates, duly endorsed in
blank or otherwise acceptable for transfer on the books of Smucker (or an
appropriate guarantee of delivery), as set forth in the Form of Election.
An election to receive the Cash Consideration may be revoked only by
written notice received by the Paying Agent prior to 5:00 p.m. New York
City time, on the last business day preceding the date of the Smucker
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Shareholder Meeting. In addition, all elections to receive the Cash
Consideration shall automatically be revoked if the Paying Agent is
notified in writing by Smucker and JMS-Ohio that the Merger has been
abandoned. If an election to receive the Cash Consideration is so revoked,
the Certificate(s) (or guarantee of delivery, as appropriate) for the
Smucker Shares to which such election to receive the Cash Consideration
relates shall be promptly returned to the person submitting the same to the
Paying Agent.
(e) Limitations on Cash Payments. Anything in this Article II to the
contrary notwithstanding, Electing Shares shall not be entitled to, and
Smucker will not be obligated in implementation of Section 3.01(b)(i) or
3.01(c)(i) to pay, the Cash Consideration in an amount that exceeds $100.0
million in the aggregate. The maximum number of Smucker Shares entitled to
the Cash Consideration pursuant to this Section 3.01(e) is referred to as
the "Maximum Cash Shares".
(f) Proration of Electing Shares. In the event that the aggregate
number of Electing Shares exceeds the Maximum Cash Shares, all Electing
Shares will be converted into the right to receive Merger Consideration in
the following manner:
(i) The number of Electing Shares covered by each Form of Election
to be converted into the Cash Consideration shall be determined by
multiplying the number of Electing Shares covered by such Form of
Election by a fraction, the numerator of which is the Maximum Cash
Shares and the denominator of which is the total number of Electing
Shares, rounded down to the nearest whole number.
(ii) All Electing Shares not converted into the Cash Consideration
in accordance with Section 3.01(f)(i) shall be converted into the Share
Consideration.
(g) Share Certificates. After the Effective Time, each Certificate
representing an outstanding Smucker Share that was converted into the Share
Consideration pursuant to Section 3.01 shall represent the same number of
Surviving Corporation Common Shares. From and after the Effective Time, the
holders of Certificates for Smucker Shares shall cease to have any rights
as shareholders of Smucker (except such rights, if any, as they may have as
Dissenting Shareholders), and, except as aforesaid, their sole rights shall
pertain to the Surviving Corporation Common Shares into which their Smucker
Shares shall have been converted by the Merger.
3.02 Exchange of Certificates. (a) Paying Agent. As of the Effective
Time, Smucker will enter into an agreement with such bank or trust company as
may be designated by Smucker (the "Paying Agent") that will provide that Smucker
will deposit with the Paying Agent as of the Effective Time, for the benefit of
the holders of Smucker Shares, for payment in accordance with this Article III,
through the Paying Agent, cash payable pursuant to Section 3.01 in exchange for
outstanding Smucker Shares converted into the Cash Consideration pursuant to
Section 3.01 (the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent will mail to each holder of record of a
certificate which immediately prior to the Effective Time represented
outstanding Smucker Shares (a "Certificate") whose Smucker Shares were converted
into the right to receive the Cash Consideration pursuant to Section 3.01 (i) a
letter of transmittal (which will specify that delivery will be effected, and
risk of loss and title to such Certificates will pass, only upon delivery of the
Certificates to the Paying Agent and will be in such form and have such other
provisions as Smucker may specify consistent with this Agreement) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Cash Consideration. Upon surrender of such a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Smucker, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate will be entitled to receive in exchange therefor the
Cash Consideration that such holder has the right to receive pursuant to the
provisions of this Article III, and the Certificate so surrendered will
forthwith be canceled. In the event of a transfer of ownership of Smucker Shares
that are not registered in the transfer records of Smucker, payment may be made
to a Person other than the Person in whose name the Certificate so surrendered
is registered if such Certificate is properly endorsed or otherwise in proper
form for transfer and the Person requesting such issuance pays any applicable
stock transfer or other taxes or
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establishes to the satisfaction of Smucker that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.02(b), each
Certificate representing Smucker Shares that were converted into the right to
receive the Cash Consideration pursuant to Section 3.01 will be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Cash Consideration that the holder thereof has the right to
receive in respect of such Certificate pursuant to the provisions of this
Article III. No interest will be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this Article III.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of Certificates for six months after the
Effective Time will be delivered to the Surviving Corporation.
(d) No Liability. None of Smucker, JMS-Ohio or the Paying Agent will be
liable to any Person in respect of any cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
(e) Investment of Exchange Fund. The Paying Agent will invest any cash
included in the Exchange Fund, as directed by Smucker, on a daily basis. Any
interest and other income resulting from such investments will be paid to
Smucker.
(f) Dissenters' Rights. No Dissenting Shareholder shall be entitled to any
portion of the Merger Consideration pursuant to this Article III unless and
until the holder thereof shall have failed to perfect or shall have effectively
withdrawn or lost such holder's right to dissent from the Merger under the ORC,
and any Dissenting Shareholder shall be entitled to receive only the payment
provided by Section 1701.85 of the ORC with respect to Smucker Shares owned by
such Dissenting Shareholder. If any Person who otherwise would be deemed a
Dissenting Shareholder shall have failed to properly perfect or shall have
effectively withdrawn or lost the right to dissent with respect to any Smucker
Shares, such shares of Smucker Shares shall thereupon be treated as though such
Smucker Shares had been converted into the right to receive the Merger
Consideration with respect to such Smucker Shares as provided in this Article
III.
(j) Exchange of Certificates for Cash. Without limiting the generality or
effect of any other provision of this Agreement, the Paying Agent will have
discretion to determine whether or not elections to receive cash have been
properly made or revoked pursuant to this Article III with respect to Smucker
Shares and when elections and revocations were received by it. If the Paying
Agent determines that any election to receive the Cash Consideration was not
properly made with respect to Smucker Shares, such Smucker Shares will be
treated by the Paying Agent as, and for all purposes of this Agreement will be
deemed to be, Non-Electing Smucker Shares at the Effective Time, and such shares
will be converted in the Merger into the Share Consideration pursuant to
Sections 3.01(b) and 3.01(c). The Paying Agent will also make computations as to
the allocation and proration contemplated by this Article III and any such
computation will be conclusive and binding on the holders of Smucker Shares
pursuant to this Article III. The Paying Agent may, with the agreement of
Smucker, make such equitable changes in the procedures set forth in this
Agreement for the implementation of the cash elections provided for in this
Article III as it determines to be necessary or desirable to effect fully such
elections.
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF SMUCKER AND JMS-OHIO
The obligation of each of Smucker and JMS-Ohio to effect the Merger and to
perform its respective obligations under this Agreement is, at its option,
subject to the satisfaction of the following conditions:
4.01 Shareholder Approval. All requisite consents and approvals of every
class of Smucker's capital stock necessary or advisable in the opinion of the
Directors of Smucker and JMS-Ohio for the Merger and the other transactions
contemplated by this Agreement shall have been duly obtained.
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4.02 Hart-Scott-Rodino Act. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 shall have expired or been terminated.
4.03 Form S-4. The registration statement on Form S-4 to be filed with the
SEC in connection with the issuance of Surviving Corporation Common Shares in
the Merger shall have become effective under the Securities Act of 1933 and
shall not be the subject of any stop order or proceedings seeking a stop order.
4.04 NYSE Listing. The Surviving Corporation Common Shares issuable to the
holders of Smucker Shares as contemplated by this Agreement shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
4.05 Dissenting Shares. The number of Dissenting Smucker Shares shall not
exceed 10% of the number of Smucker Shares outstanding, and the time for the
holders of Smucker Shares to exercise dissenters' rights under the ORC shall
have expired.
4.06 No Injunctions or Restraints. No judgment, order, decree, statute,
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any federal, state or local or foreign government, any court,
administrative, regulatory or other governmental agency, commission or authority
or any non-governmental United States or foreign self-regulatory agency,
commission or authority or any arbitral tribunal (each, a "Governmental Entity")
of competent jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect preventing the consummation of the Merger or
that otherwise is reasonably likely to have or result in a material adverse
effect on Smucker, JMS-Ohio or the Surviving Corporation, as applicable;
provided, however, that each of the parties shall have used its reasonable best
efforts to prevent the entry of any such Restraints and to appeal as promptly as
possible any such Restraints that may be entered.
ARTICLE V
APPROVAL; AMENDMENT; ABANDONMENT; MISCELLANEOUS
5.01 Approval. The Merger shall be submitted for approval of, and
Agreement shall be submitted for adoption by, the shareholders of Smucker at an
Smucker Shareholder Meeting.
5.02 Amendment. Subject to applicable law, this Agreement may be amended,
modified or supplemented by mutual written agreement of the Constituent
Corporations at any time prior to the Effective Time, except that after the
approval contemplated by Section 4.01, there shall be no amendments that would
alter or change the amount or kind of shares or cash to be received by
shareholders in the Merger, alter or change any term of the Articles of
Incorporation or Regulations of Smucker, as amended pursuant to Section 2.03, or
alter or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of any class of stock of
either of the Constituent Corporations.
5.03 Abandonment. At any time prior to the Effective Time, this Agreement
may be terminated and the Merger may be abandoned by the Directors of either
Smucker of JMS-Ohio by written notice to the other, or both, notwithstanding
approval of this Agreement by the shareholders of Smucker or the sole
shareholder of JMS-Ohio, or both.
5.04 References. Unless otherwise indicated, references in this Agreement
to an Article, Section or Annex are to Articles and Sections of, and Annexes to,
this Agreement.
5.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and the same
agreement.
5.06 Statutory Agent in Ohio. The name and address of the statutory agent
in Ohio upon whom any process, notice or demand against Smucker or the Surviving
Corporation may be served is:
CT Corporation System
1300 East 9th Street
Cleveland, Ohio 44114
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IN WITNESS WHEREOF, Smucker and JMS-Ohio have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
<TABLE>
<S> <C>
THE J. M. SMUCKER COMPANY
By:
-----------------------------------------------------
Name:
Title:
JMS-OHIO, INC.
By:
-----------------------------------------------------
Name:
Title:
</TABLE>
[ANNEX A AND ANNEX B TO THE AGREEMENT OF MERGER HAVE BEEN INTENTIONALLY OMITTED
AS THEY ARE ATTACHED TO THE PROXY STATEMENT/PROSPECTUS AS ANNEX D AND ANNEX E.]
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ANNEX B
SECTIONS 1701.84 AND 1701.85 OF THE OHIO REVISED CODE
SECTION 1701.84 DISSENTS IN CASE OF A MERGER, CONSOLIDATION, COMBINATION, OR
MAJORITY SHARE ACQUISITION.
The following are entitled to relief as dissenting shareholders under
section 1701.85 of the Revised Code:
(A) Shareholders of a domestic corporation that is being merged or
consolidated into a surviving or new entity, domestic or foreign, pursuant
to section 1701.78, 1701.781, 1701.79, 1701.791, or 1701.801 of the Revised
Code;
(B) In the case of a merger into a domestic corporation, shareholders
of the surviving corporation who under section 1701.78 or 1701.781 of the
Revised Code are entitled to vote on the adoption of an agreement of
merger, but only as to the shares so entitling them to vote;
(C) Shareholders, other than the parent corporation, of a domestic
subsidiary corporation that is being merged into the domestic or foreign
parent corporation pursuant to section 1701.80 of the Revised Code;
(D) In the case of a combination or a majority share acquisition,
shareholders of the acquiring corporation who under section 1701.83 of the
Revised Code are entitled to vote on such transaction, but only as to the
shares so entitling them to vote;
(E) Shareholders of a domestic subsidiary corporation into which one
or more domestic or foreign corporations are being merged pursuant to
section 1701.801 of the Revised Code.
SECTION 1701.85 PROCEDURE IN CASE OF DISSENTS.
(A)(1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.
(2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on the proposal was taken at the meeting of the shareholders,
the dissenting shareholder shall deliver to the corporation a written demand for
payment to him of the fair cash value of the shares as to which he seeks relief,
which demand shall state his address, the number and class of such shares, and
the amount claimed by him as the fair cash value of the shares.
(3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 of the Revised Code shall be a record holder
of the shares of the corporation as to which he seeks relief as of the date on
which the agreement of merger was adopted by the directors of that corporation.
Within twenty days after he has been sent the notice provided in section 1701.80
or 1701.801 of the Revised Code, the dissenting shareholder shall deliver to the
corporation a written demand for payment with the same information as that
provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
entity, whether the demand is served before, on, or after the effective date of
the merger or consolidation.
(5) If the corporation sends to the dissenting shareholder, at the address
specified in his demand, a request for the certificates representing the shares
as to which he seeks relief, the dissenting shareholder,
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within fifteen days from the date of the sending of such request, shall deliver
to the corporation the certificates requested so that the corporation may
forthwith endorse on them a legend to the effect that demand for the fair cash
value of such shares has been made. The corporation promptly shall return such
endorsed certificates to the dissenting shareholder. A dissenting shareholder's
failure to deliver such certificates terminates his rights as a dissenting
shareholder, at the option of the corporation, exercised by written notice sent
to the dissenting shareholder within twenty days after the lapse of the
fifteen-day period, unless a court for good cause shown otherwise directs. If
shares represented by a certificate on which such a legend has been endorsed are
transferred, each new certificate issued for them shall bear a similar legend,
together with the name of the original dissenting holder of such shares. Upon
receiving a demand for payment from a dissenting shareholder who is the record
holder of uncertificated securities, the corporation shall make an appropriate
notation of the demand for payment in its shareholder records. If uncertificated
shares for which payment has been demanded are to be transferred, any new
certificate issued for the shares shall bear the legend required for
certificated securities as provided in this paragraph. A transferee of the
shares so endorsed, or of uncertificated securities where such notation has been
made, acquires only such rights in the corporation as the original dissenting
holder of such shares had immediately after the service of a demand for payment
of the fair cash value of the shares. A request under this paragraph by the
corporation is not an admission by the corporation that the shareholder is
entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of the
county in which the principal office of the corporation that issued the shares
is located or was located when the proposal was adopted by the shareholders of
the corporation, or, if the proposal was not required to be submitted to the
shareholders, was approved by the directors. Other dissenting shareholders,
within that three-month period, may join as plaintiffs or may be joined as
defendants in any such proceeding, and any two or more such proceedings may be
consolidated. The complaint shall contain a brief statement of the facts,
including the vote and the facts entitling the dissenting shareholder to the
relief demanded. No answer to such a complaint is required. Upon the filing of
such a complaint, the court, on motion of the petitioner, shall enter an order
fixing a date for a hearing on the complaint and requiring that a copy of the
complaint and a notice of the filing and of the date for hearing be given to the
respondent or defendant in the manner in which summons is required to be served
or substituted service is required to be made in other cases. On the day fixed
for the hearing on the complaint or any adjournment of it, the court shall
determine from the complaint and from such evidence as is submitted by either
party whether the dissenting shareholder is entitled to be paid the fair cash
value of any shares and, if so, the number and class of such shares. If the
court finds that the dissenting shareholder is so entitled, the court may
appoint one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such power
and authority as is specified in the order of their appointment. The court
thereupon shall make a finding as to the fair cash value of a share and shall
render judgment against the corporation for the payment of it, with interest at
such rate and from such date as the court considers equitable. The costs of the
proceeding, including reasonable compensation to the appraisers to be fixed by
the court, shall be assessed or apportioned as the court considers equitable.
The proceeding is a special proceeding and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the Rules of Appellate Procedure
and, to the extent not in conflict with those rules, Chapter 2505 of the Revised
Code. If, during the pendency of any proceeding instituted under this section, a
suit or proceeding is or has been instituted to enjoin or otherwise to prevent
the carrying out of the action as to which the shareholder has dissented, the
proceeding instituted under this section shall be stayed until the final
determination of the other suit or proceeding. Unless any provision in division
(D) of this section is applicable, the fair cash value of the shares that is
agreed upon by the parties or fixed under this section shall be paid within
thirty days after the date of final determination of such value under this
division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a holder
of uncertificated securities entitled to such payment. In the case of holders of
shares represented by certificates, payment shall be made only upon and
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simultaneously with the surrender to the corporation of the certificates
representing the shares for which the payment is made.
(C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as of
the day prior to the day on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 of the Revised
Code, fair cash value as to shareholders of a constituent subsidiary corporation
shall be determined as of the day before the adoption of the agreement of merger
by the directors of the particular subsidiary corporation. The fair cash value
of a share for the purposes of this section is the amount that a willing seller
who is under no compulsion to sell would be willing to accept and that a willing
buyer who is under no compulsion to purchase would be willing to pay, but in no
event shall the fair cash value of a share exceed the amount specified in the
demand of the particular shareholder. In computing such fair cash value, any
appreciation or depreciation in market value resulting from the proposal
submitted to the directors or to the shareholders shall be excluded.
(D)(1) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay the
fair cash value of them terminates if any of the following applies:
(a) The dissenting shareholder has not complied with this section,
unless the corporation by its directors waives such failure;
(b) The corporation abandons the action involved or is finally
enjoined or prevented from carrying it out, or the shareholders rescind
their adoption of the action involved;
(c) The dissenting shareholder withdraws his demand, with the consent
of the corporation by its directors;
(d) The corporation and the dissenting shareholder have not come to an
agreement as to the fair cash value per share, and neither the shareholder
nor the corporation has filed or joined in a complaint under division (B)
of this section within the period provided in that division.
(2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
(E) From the time of the dissenting shareholder's giving of the demand
until either the termination of the rights and obligations arising from it or
the purchase of the shares by the corporation, all other rights accruing from
such shares, including voting and dividend or distribution rights, are
suspended. If during the suspension, any dividend or distribution is paid in
money upon shares of such class or any dividend, distribution, or interest is
paid in money upon any securities issued in extinguishment of or in substitution
for such shares, an amount equal to the dividend, distribution, or interest
which, except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated other
than by the purchase of the shares by the corporation, all rights of the holder
shall be restored and all distributions which, except for the suspension, would
have been made shall be made to the holder of record of the shares at the time
of termination.
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ANNEX C
FAIRNESS OPINION OF WILLIAM BLAIR & COMPANY, L.L.C.
May 2, 2000
Board of Directors
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Ladies and Gentlemen:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders of the outstanding shares of the (i) Class A common
shares (without par value) (the "Class A Common Shares") and (ii) Class B common
shares (without par value) (the "Class B Common Shares"), (collectively the
"Shareholders") of The J. M. Smucker Company ("Smucker" or the "Company") of the
Exchange Ratio (as defined below) specified in the draft Agreement of Merger
dated as of May 10, 2000 (the "Merger Agreement") by and among a newly formed,
wholly-owned subsidiary of the Company ("JMS-Ohio") and the Company. Pursuant to
the terms of and subject to the conditions set forth in the Merger Agreement,
JMS-Ohio will be merged with and into the Company (the "Merger") and each share
of the Class A Common Shares and Class B Common Shares will, at the election of
each Shareholder, be either (i) exchanged on a 1-for-1 basis (the "Exchange
Ratio") for one share of JMS-Ohio Common Shares, (without par value) (the
"JMS-Ohio Common Shares") or (ii) for a fixed dollar amount in cash. Except as
disclosed in the Company's proxy statement/prospectus relating to the Merger
(the "Proxy Statement"), the JMS-Ohio Common Shares will have the same rights
and preferences as the Class A Common Shares, including a time-phased voting
feature. Each JMS-Ohio Common Share to be issued upon exchange of each Class A
Common Share will be entitled to the same number of votes per share as the
exchanged Class A Common Share was entitled to prior to the Merger. The JMS-Ohio
Common Shares to be issued upon exchange of each Class B Common Share will
initially be entitled to one vote per share. We understand that the proposed
Merger will be submitted to the Shareholders for approval at the Annual Meeting
of the Shareholders to be held on August 15, 2000.
In connection with our review of the proposed Merger and the preparation of
our opinion herein, we have examined: (a) the Merger Agreement; (b) certain
audited historical financial statements of the Company for the five years ended
April 30, 1999; (c) the unaudited condensed financial statements of the Company
for the 9 months ended January 31, 2000; (d) the pro forma impact of the
Exchange Ratio on the earnings per share of Smucker; (e) current and historical
market prices and trading volumes of the Class A Common Shares and Class B
Common Shares; (f) a preliminary draft of the Proxy Statement dated as of May 1,
2000 which describes the proposed Merger; (g) the relative rights and
preferences of the Class A Common Shares and Class B Common Shares as of the
date hereof; (h) the Company's Amended and Restated Articles of Incorporation
("Restated Articles"); (i) the proposed Articles of Incorporation of JMS-Ohio;
(j) the current and historical market prices of the capital stock of certain
other companies with two classes of publicly traded stock which we believed to
be comparable to the Company's situation; (k) the terms and conditions of
certain transactions, that we deemed relevant, in which two classes of capital
stock of public companies were converted, exchanged, reclassified or otherwise
reverted into a single class of capital stock; (l) certain information provided
to us by you as to the rights and preferences of the Class A Common Shares and
Class B Common Shares and certain legal matters relating thereto; and (m)
certain other publicly available information relating to the Company. We have
also held discussions with members of the senior management of the Company to
discuss the foregoing, met with the Board of Directors and your legal counsel to
discuss the Company, the proposed Merger and the results of our analysis and
examination and have considered other matters which we have deemed relevant to
our inquiry and have taken into account such accepted financial and investment
banking procedures and considerations as we have deemed relevant. The senior
management of the Company has advised us that the Company is not considering any
change of control transaction and
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accordingly we did not evaluate the fairness, from a financial point of view, of
the Exchange Ratio in the context of a change of control of the Company.
In rendering our opinion, we have assumed and relied, without assuming any
duty of independent verification, upon the accuracy and completeness of all the
information examined by or otherwise reviewed or discussed with us for purposes
of this opinion. We have not made or obtained an independent valuation or
appraisal of the assets, liabilities or solvency of the Company or JMS-Ohio. Our
opinion does not address the relative merits of the Merger as compared to any
alternative business, capital, capitalization or other strategies that might
exist for the Company or the effect of any other transaction in which the
Company might engage. We were not requested to, nor did we, seek alternative
participants for the proposed Merger. Our opinion herein is based upon economic,
market, financial and other conditions existing on, and other information
disclosed to us as of, the date of this letter. It should be understood that,
although subsequent developments may affect this opinion, we do not have any
obligation to update, revise or reaffirm this opinion. We have relied as to all
legal matters on advice of counsel to the Company, and have assumed that the
Merger will be consummated on the terms described in the Merger Agreement,
without any waiver of any material terms or conditions by the Company. We note
that although members of the Smucker family and related trusts own shares that
may control a majority of the outstanding votes of the Class A Common Shares,
the Merger Agreement includes a condition precedent to the completion of the
Merger requiring affirmative votes of two-thirds of each of the Class A Common
Shares and the Class B Common Shares.
William Blair & Company has been engaged in the investment banking business
since 1935. We continually undertake the valuation of investment securities in
connection with public offerings, private placements, business combinations,
reorganizations, estate and gift tax valuations and similar transactions. In the
ordinary course of our business, we may from time to time trade the securities
of the Company for our own account and for the accounts of customers, and
accordingly may at any time hold a long or short position in such securities. We
have acted as the investment banker to the Company in connection with the Merger
and will receive a fee from the Company for our services, a portion of which
will be paid based upon the number of shares of Class A Common Shares and Class
B Common Shares purchased in the Merger pursuant to the cash election provisions
of the Merger Agreement. In addition, the Company has agreed to indemnify us
against certain liabilities arising out of our engagement.
We are familiar with the Company, having provided certain investment
banking and financial advisory services to the Company in the past for which we
have received customary compensation.
We are expressing no opinion herein as to the price at which the Class A
Common Shares, Class B Common Shares or JMS-Ohio Common Shares will trade at any
future time. Such trading prices may be affected by a number of factors,
including but not limited to (i) dispositions of the JMS-Ohio Common Shares by
shareholders within a short period of time after the effective date of the
Merger, (ii) changes in prevailing interest rates and other factors which
generally influence the price of securities, (iii) adverse changes in the
current capital markets, (iv) the occurrence of adverse changes in the financial
condition, business, assets, results of operations or prospects of the Company
or JMS-Ohio or in the food industry, (v) any necessary actions by or
restrictions of federal, state or other governmental agencies or regulatory
authorities, (vi) the number of Class A Common Shares and Class B Common Shares
purchased in the Merger pursuant to the cash election provisions of the Merger
Agreement and the amount paid to purchase such shares, and (vii) timely
completion of the Merger on terms and conditions that are acceptable to all
parties at interest. Additionally, we express no opinion as to the adequacy of
the consideration to be paid pursuant to the cash election provisions of the
Merger Agreement.
Our investment banking services and our opinion were provided for the use
and benefit of the Board of Directors of the Company in connection with its
consideration of the transaction contemplated by the Merger Agreement. Our
opinion is limited to the fairness, from a financial point of view, to the
Shareholders of the Company of the Exchange Ratio proposed in connection with
the Merger, and we do not address the merits of the underlying decision by the
Company to engage in the Merger and this opinion does not constitute a
recommendation to any Shareholder as to how such Shareholder should vote with
respect to the proposed Merger or whether any such Shareholder should elect to
receive cash or JMS-Ohio Common Shares. It is
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understood that this letter may not be disclosed or otherwise referred to
without our prior written consent, except that the opinion may be described in
detail and included in its entirety in the Proxy Statement.
Based upon and subject to the foregoing, it is our opinion as investment
bankers that, as of the date hereof, the proposed Exchange Ratio is fair, from a
financial point of view, to the Shareholders of Smucker.
Very truly yours,
WILLIAM BLAIR & COMPANY, L.L.C.
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[AMENDED ARTICLES AS THEY WILL BE IN EFFECT FOLLOWING THE COMBINATION]
ANNEX D
AMENDED
ARTICLES OF INCORPORATION
OF
THE J. M. SMUCKER COMPANY
(AS IN EFFECT AS OF AUGUST , 2000)
FIRST. The name of the Company is The J. M. Smucker Company.
SECOND. The place in Ohio where its principal office is located is the City
of Orrville, in Wayne County.
THIRD. The purpose or purposes of the Company are:
(a) To manufacture, preserve, can, pack, purchase, sell, import,
export, store, hold, use, distribute, transport, and deal in and with food
products, food by-products, and containers therefor;
(b) To manufacture, to purchase, lease, or otherwise acquire, to hold
and use, to sell, lease, or otherwise dispose of, and to deal in or with
personal property of any description and any interest therein;
(c) To purchase, lease, or otherwise acquire, to invest in, hold, use,
and encumber, to sell, lease, exchange, transfer, or otherwise dispose of,
and to construct, develop, improve, equip, maintain, and operate structures
and real property of any description and any interest therein;
(d) To borrow money, to issue, sell, and pledge its notes, bonds, and
other evidences of indebtedness, to secure any of its obligations by
mortgage, pledge, or deed of trust of all or any of its property, and to
guarantee and secure obligations of any person, all to the extent
necessary, useful, or conducive to carrying out any of the purposes of the
Company;
(e) To invest its funds in any shares or other securities of another
corporation, business, or undertaking or of a government, governmental
authority, or governmental subdivision; and
(f) To do whatever is deemed necessary, useful, or conducive to
carrying out any of the purposes of the Company and to exercise all other
authority enjoyed by corporations generally by virtue of the provisions of
the Ohio General Corporation Law.
FOURTH. The authorized number of shares of the Company is 73,000,000
consisting of 3,000,000 serial preferred shares without par value ("Serial
Preferred Shares") and 70,000,000 common shares without par value ("Common
Shares").
DIVISION I
EXPRESS TERMS OF SERIAL PREFERRED SHARES
The Serial Preferred Shares may be issued from time to time in series. Each
Serial Preferred Share of any one series shall be identical with each other
share of the same series in all respects, except as to the date from which
dividends thereon shall be cumulative; and all Serial Preferred Shares of all
series shall rank equally and shall be identical, except that there may be
variations in respect of the dividend rate, the dates of payment of dividends
and the dates from which they are cumulative, redemption rights and price,
sinking fund requirements, conversion rights, liquidation price, and
restrictions on the issuance of shares of the same series or of any other class
or series. Subject to the requirement that all Serial Preferred Shares shall be
identical in respect of voting rights and rights of alteration of express terms,
the Board of Directors, without any further action by the shareholders, may, at
any time and from time to time, adopt an amendment or amendments to these
Amended Articles of Incorporation, or adopt further Amended Articles of
Incorporation, in respect of any Serial Preferred Shares that constitute
unissued or treasury shares at the time of such adoption for the purpose of
dividing any or all of such Serial Preferred Shares into such series as the
Board
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of Directors shall determine and fix the express terms of any such series of
Serial Preferred Shares, which may include statements specifying:
(a) Dividend rights, which may be cumulative or non-cumulative, at a
specified rate, amount, or proportion, with or without further
participation rights, and in preference to, junior to, or on a parity in
whole or in part with dividend rights of shares of any other class or
series;
(b) Redemption rights and price;
(c) Sinking fund requirements, which may require the Company to
provide a sinking fund out of earnings or otherwise for the purchase or
redemption of such shares or for dividends thereon;
(d) Conversion rights;
(e) Liquidation rights, preferences, and price; and
(f) Restrictions on the issuance of shares of any class or series of
the Company.
DIVISION I-A
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
Section 1. There is established hereby a series of Serial Preferred Shares
that shall be designated Series A Junior Participating Preferred Shares
(hereinafter sometimes called this "Series" or the "Series A Junior
Participating Preferred Shares") and that shall have the terms set forth in this
Division I-A.
Section 2. The number of shares of this Series shall be 700,000.
Section 3. (a) The holders of record of Series A Junior Participating
Preferred Shares shall be entitled to receive, when and as declared by the
Directors in accordance with the terms hereof, out of funds legally available
for the purpose, cumulative quarterly dividends payable in cash on the first day
of March, June, September, and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a Series A
Junior Participating Preferred Share or fraction of a Series A Junior
Participating Preferred Share. Such quarterly dividend payments shall be in an
amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00
per share or (ii) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, plus 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions (other than a dividend payable in Common Shares, or a
subdivision of the outstanding Common Shares (by reclassification or
otherwise)), declared on the Common Shares since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any Series A Junior
Participating Preferred Share or fraction of a Series A Junior Participating
Preferred Share. In the event the Company shall at any time declare or pay any
dividend on the Common Shares payable in Common Shares, or effect a subdivision
or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
amount to which holders of Series A Junior Participating Preferred Shares were
entitled immediately prior to such event under clause (ii) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on outstanding Series
A Junior Participating Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series A Junior Participating Preferred
Shares, unless (i) the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or (ii) the
date of issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Junior Participating
Preferred Shares entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
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Date. Accrued but unpaid dividends shall not bear interest. No dividends shall
be paid upon or declared and set apart for any Series A Junior Participating
Preferred Shares for any dividend period unless at the same time a dividend for
the same dividend period, ratably in proportion to the respective annual
dividend rates fixed therefor, shall be paid upon or declared and set apart for
all Serial Preferred Shares of all series then outstanding and entitled to
receive such dividend. The Directors may fix a record date for the determination
of holders of Series A Junior Participating Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 40 days prior to the date fixed for the payment thereof.
Section 4. The Series A Junior Participating Preferred Shares are not
redeemable.
Section 5. (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company (hereinafter referred to
as a "Liquidation"), no distribution shall be made to the holders of shares
ranking junior (either as to dividends or upon Liquidation) to the Series A
Junior Participating Preferred Shares, unless, prior thereto, the holders of
Series A Junior Participating Preferred Shares shall have received at least an
amount per share equal to one hundred times the then applicable Purchase Price
as defined in the Rights Agreement, dated as of April 22, 1999 between the
Company and Harris Trust and Savings Bank, as the same may be from time to time
amended in accordance with its terms (which Purchase Price is $90.00 as of April
22, 1999), subject to adjustment from time to time as provided in the Rights
Agreement, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of such
payment; provided that the holders of Series A Junior Participating Preferred
Shares shall be entitled to receive at least an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Shares (the "Series A Junior Participating Preferred Shares Liquidation
Preference").
(b) In the event, however, that the net assets of the Company are not
sufficient to pay in full the amount of the Series A Junior Participating
Preferred Shares Liquidation Preference and the liquidation preferences of all
other series of Serial Preferred Shares, if any, which rank on a parity with the
Series A Junior Participating Preferred Shares as to distribution of assets in
Liquidation, all shares of this Series and of such other series of Serial
Preferred Shares shall share ratably in the distribution of assets (or proceeds
thereof) in Liquidation in proportion to the full amounts to which they are
respectively entitled.
(c) In the event the Company shall at any time declare or pay any dividend
on the Common Shares payable in consolidation of the outstanding Common Shares
(by reclassification or otherwise than by payment of a dividend in Common
Shares) into a greater or lesser number of Common Shares, then in each such case
the amount to which holders of Series A Junior Participating Preferred Shares
were entitled immediately prior to such event pursuant to the proviso set forth
in paragraph (a) above, shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Company into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Company, shall not be deemed to be a Liquidation for the purpose of this Section
5.
Section 6. The Series A Junior Participating Preferred Shares shall not be
convertible into Common Shares.
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DIVISION II
EXPRESS TERMS OF COMMON SHARES
(a) Each outstanding Common Share shall entitle the holder thereof to ten
votes on each matter properly submitted to the shareholders for their vote,
consent, waiver, release or other action, other than any matter submitted to the
shareholders for purposes solely of Article Fifth hereof; except that:
(i) no holder of Common Shares shall be entitled to exercise more than
one vote on any such matter in respect of any Common Share with respect to
which there has been a change in beneficial ownership during the four years
immediately preceding the date on which a determination is made of the
shareholders who are entitled to take any such action;
(ii) Common Shares that were issued pursuant to the Agreement of
Merger, dated as of August , 2000 (the "Merger Agreement"), upon
conversion of a Class B Share (as defined in the Merger Agreement) shall
not entitle the holder thereof to exercise more than one vote on any such
matter until the fourth anniversary of the Effective Time of the Merger
(each as defined in the Merger Agreement), and from and after such time
only in accordance with clause (i) of this sentence; and
(iii) no holder shall be entitled to exercise more than one vote on
any such matter in respect of any Common Share if the aggregate voting
power such holder otherwise would be entitled to exercise as of the date of
such a determination (disregarding the voting power of any Common Shares
held by such holder on August 20, 1985 or acquired by such holder in a
transaction not involving any change in beneficial ownership by reason of
paragraph (c) of this Division II) would constitute one-fifth or more of
the voting power of the Company and the holders of the Common Shares have
not authorized the ownership of Common Shares by such person as and to the
extent contemplated by Article Seventh hereof.
(b) A change in beneficial ownership of an outstanding Common Share shall
be deemed to have occurred whenever a change occurs in any person or group of
persons who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares (1) voting power, which
includes the power to vote, or to direct the voting of such Common Share, (2)
investment power, which includes the power to direct the sale or other
disposition of such Common Share, (3) the right to receive or retain the
proceeds of any sale or other disposition of such Common Share, or (4) the right
to receive any distributions, including cash dividends, in respect of such
Common Share.
(A) In the absence of proof to the contrary provided in accordance
with the procedures referred to in paragraph (d) of this Division II, a
change in beneficial ownership shall be deemed to have occurred whenever a
Common Share is transferred of record into the name of any other person.
(B) In the case of a Common Share held of record in the name of a
corporation, general partnership, limited partnership, voting trustee,
bank, trust company, broker, nominee or clearing agency, if it has not been
established pursuant to the procedures referred to in paragraph (d) of this
Division II that there has been no change in the person or persons who
direct the exercise of the rights referred to in clauses (b)(1) through
(b)(4) of this Division II with respect to such Common Share during the
period of four years immediately preceding the date on which a
determination is made of the shareholders who are entitled to take any
action, then a change in beneficial ownership shall be deemed to have
occurred during such period.
(C) In the case of a Common Share held of record in the name of any
person as a trustee, agent, guardian or custodian under the Uniform Gifts
to Minors Act as in effect in any state, a change in beneficial ownership
shall be deemed to have occurred whenever there is a change in the
beneficiary of such trust, the principal of such agent, the ward of such
guardian or the minor for whom such custodian is acting or in such trustee,
agent, guardian or custodian.
(D) In the case of Common Shares beneficially owned by a person or
group of persons who, after acquiring directly or indirectly the beneficial
ownership of five percent of the outstanding Common
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Shares, failed to notify the Company of such ownership, a change in
beneficial ownership of such Common Shares shall be deemed to occur on each
day while such failure continues.
(c) Notwithstanding anything in this Division II to the contrary, no change
in beneficial ownership shall be deemed to have occurred solely as a result of:
(1) any event that occurred prior to August 20, 1985 or pursuant to
the terms of any contract (other than a contract for the purchase and sale
of Common Shares contemplating prompt settlement), including contracts
providing for options, rights of first refusal and similar arrangements in
existence on such date to which any holder of Common Shares is a party;
(2) any transfer of any interest in a Common Share pursuant to a
bequest or inheritance, by operation of law upon the death of any
individual, or by any other transfer without valuable consideration,
including a gift that is made in good faith and not for the purpose of
circumventing this Article Fourth;
(3) any change in the beneficiary of any trust, or any distribution of
a Common Share from trust, by reason of the birth, death, marriage or
divorce of any natural person, the adoption of any natural person prior to
age 18 or the passage of a given period of time or the attainment by any
natural person of a specific age, or the creation or termination of any
guardianship or custodial arrangement;
(4) any appointment of a successor trustee, agent, guardian or
custodian with respect to a Common Share if neither such successor has nor
its predecessor had the power to vote or to dispose of such Common Share
without further instructions from others;
(5) any change in the person to whom dividends or other distributions
in respect of a Common Share are to be paid pursuant to the issuance or
modification of a revocable dividend payment order; or
(6) any issuance of a Common Share by the Company or any transfer by
the Company of a Common Share held in treasury unless otherwise determined
by the Board of Directors at the time of authorizing such issuance, or
transfer.
(d) For purposes of this Division II, all determinations concerning changes
in beneficial ownership, or the absence of any such change, shall be made by the
Company or, at any time when a transfer agent is acting with respect to the
Common Shares, by such transfer agent on the Company's behalf. Written
procedures designed to facilitate such determinations shall be established by
the Company and refined from time to time. Such procedures shall provide, among
other things, the manner of proof of facts that will be accepted and the
frequency with which such proof may be required to be renewed. The Company and
any transfer agent shall be entitled to rely on all information concerning
beneficial ownership of the Common Shares coming to their attention from any
source and in any manner reasonably deemed by them to be reliable, but neither
the Company nor any transfer agent shall be charged with any other knowledge
concerning the beneficial ownership of the Common Shares.
(e) In the event of any stock split or stock dividend with respect to the
Common Shares, each Common Share acquired by reason of such split or dividend
shall be deemed to have been beneficially owned by the same person continuously
from the same date as that on which beneficial ownership of the Common Share,
with respect to which such Common Share was distributed, was acquired.
(f) Each Common Share, whether at any particular time the holder thereof is
entitled to exercise ten votes or one, shall be identical to all other Common
Shares in all respects, and together the Common Shares shall constitute a single
class of shares of the Company.
FIFTH. (a) Unless the conditions set forth in clauses (1) through (4) of
this paragraph (a) are satisfied, the affirmative vote of the holders of 85% of
all shares of the Company entitled to vote in elections of directors, considered
for the purposes of this Article Fifth as one class, shall be required for the
adoption or authorization of a business combination (as hereinafter defined)
with any other entity (as hereinafter defined) if, as of the record date for the
determination of shareholders entitled to notice thereof and to vote thereon,
the other entity is the beneficial owner, directly or indirectly, of more than
30% of the outstanding shares of
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the Company entitled to vote in elections of directors, considered for the
purposes of this Article Fifth as one class. The 85% voting requirement set
forth in the foregoing sentence shall not be applicable if:
(1) The cash, or fair market value of other consideration, to be
received per share by holders of Common Shares of the Company in the
business combination is at least an amount equal to (A) the highest per
share price paid by the other entity in acquiring any of its holdings of
the Common Shares of the Company plus (B) the aggregate amount, if any, by
which 5% per annum of the per share price exceeds the aggregate amount of
all dividends paid in cash, in each case since the date on which the other
entity acquired the 30% interest;
(2) After the other entity has acquired a 30% interest and prior to
the consummation of the business combination: (A) the other entity shall
have taken steps to ensure that the Company's Board of Directors included
at all times representation by continuing director(s) (as hereinafter
defined) proportionate to the shareholdings of the public holders of Common
Shares of the Company not affiliated with the other entity (with a
continuing director to occupy any resulting fractional board position); (B)
the other entity shall not have acquired any newly issued shares, directly
or indirectly, from the Company (except upon conversion of convertible
securities acquired by it prior to obtaining a 30% interest or as a result
of a pro rata share dividend or share split); and (C) the other entity
shall not have acquired any additional outstanding Common Shares of the
Company or securities convertible into Common Shares except as a part of
the transaction that resulted in the other entity's acquiring its 30%
interest;
(3) The other entity shall not have (A) received the benefit, directly
or indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges, or other financial assistance or tax credits
provided by the Company or (B) made any major change in the Company's
business or equity capital structure without in either case the approval of
at least a majority of all the directors and at least two-thirds of the
continuing directors, in either case prior to the consummation of the
business combination; and
(4) A proxy statement responsive to the requirements of the Securities
Exchange Act of 1934 shall have been mailed to public shareholders of the
Company for the purpose of soliciting shareholder approval of the business
combination and shall have contained at the front thereof, in a prominent
place, any recommendations as to the advisability (or inadvisability) of
the business combination that the continuing directors, or any of them, may
choose to state and, if deemed advisable by a majority of the continuing
directors, an opinion of a reputable investment banking firm as to the
fairness (or not) of the terms of the business combination, from the point
of view of the remaining public shareholders of the Company (the investment
banking firm to be selected by a majority of the continuing directors and
to be paid a reasonable fee for their services by the Company upon receipt
of the opinion).
The provisions of this Article Fifth shall also apply to a business combination
with any other entity that at any time has been the beneficial owner, directly
or indirectly, of more than 30% of the outstanding shares of the Company
entitled to vote in elections of directors, considered for the purposes of this
Article Fifth as one class, notwithstanding the fact that the other entity has
reduced its shareholdings below 30% if, as of the record date for the
determination of shareholders entitled to notice of and to vote on the business
combination, the other entity is an "affiliate" of the Company (as hereinafter
defined).
(b) As used in this Article Fifth, (1) the term "other entity" shall
include any corporation, person, or other entity and any other entity with which
it or its "affiliate" or "associate" (as defined below) has any agreement,
arrangement, or understanding, directly or indirectly, for the purpose of
acquiring, holding, voting, or disposing of shares of the Company, or that is
its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934,
together with the successors and assigns of those persons in any transaction or
series of transactions not involving a public offering of the Company's shares
within the meaning of the Securities Act of 1933; (2) another entity shall be
deemed to be the beneficial owner of any shares of the Company that the other
entity (as defined above) has the right to acquire pursuant to any agreement or
upon exercise of conversion rights, warrants, or options, or otherwise; (3) the
outstanding shares of any class of the Company shall include shares deemed owned
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through application of clause (2) above but shall not include any other shares
that may be issuable pursuant to any agreement or upon exercise of conversion
rights, warrants, or options, or otherwise; (4) the term "business combination"
shall include (A) the sale, exchange, lease, transfer, or other disposition by
the Company of all, or substantially all, of its assets or business to any other
entity, (B) the consolidation of the Company with or its merger into any other
entity, (C) the merger into the Company of any other entity, and (D) a
"combination" or "majority share acquisition" in which the Company is the
"acquiring corporation" (as those terms are defined in Section 1701.01 of the
Ohio General Corporation Law or any similar provision hereafter enacted) and its
voting shares are issued or transferred to any other entity or to shareholders
of any other entity, and the term "business combination" shall also include any
agreement, contract, or other arrangement with another entity providing for any
of the transactions described in (A) through (D) of this clause (4); (5) the
term "continuing director" shall mean either a person who was a member of the
Board of Directors of the Company elected by the public shareholders prior to
the time when the other entity acquired in excess of 5% of the shares of the
Company entitled to vote in the election of directors, considered for the
purposes of this Article Fifth as one class, or a person recommended to succeed
a continuing director or by a majority of the continuing directors; and (6), for
the purposes of clause (a) (1) of this Article Fifth, the term "other
consideration to be received" shall mean Common Shares of the Company retained
by its existing public shareholders in the event of a business combination with
the other entity in which the Company is the surviving corporation.
(c) A majority of the continuing directors shall have the power and duty to
determine for the purposes of this Article Fifth, on the basis of information
known to them, whether (1) the other entity beneficially owns more than 30% of
the outstanding shares of the Company entitled to vote in election of directors,
(2) another entity is an "affiliate" or "associate" (as defined above) of
another, or (3) another entity has an agreement, arrangement, or understanding
with another.
(d) No amendment to the Articles of Incorporation of the Company shall
amend, alter, change, or repeal any of the provisions of this Article Fifth
unless the amendment effecting such amendment, alteration, change, or repeal
receives the affirmative vote of the holders of 85% of all shares of the Company
entitled to vote in the election of directors, considered for the purposes of
this Article Fifth as one class, except that this paragraph (d) shall not apply
to, and the 85% vote shall not be required for, any amendment, alteration,
change, or repeal recommended to the shareholders by the Board of Directors of
the Company if the recommendation has been approved by at least a majority of
all of the directors and by at least two-thirds of the continuing directors.
(e) Nothing contained in this Article Fifth shall be construed to relieve
any other entity from any fiduciary obligation imposed by law.
SIXTH. Section 1701.831 of the Ohio Revised Code shall not apply to
"control share acquisitions" of shares of the Company so long as Article Seventh
hereof is in effect.
SEVENTH. The Control Share Acquisition provisions applicable to the shares
of the Company, in lieu of those contained in Section 1701.831 of the Ohio
Revised Code, are set forth in this Article Seventh.
(A) As used in this Article Seventh:
(1) (a) "Control Share Acquisition" means the acquisition, directly or
indirectly, by any Person (as hereinafter defined) of shares of the Company
(other than in accordance with the provisions of paragraph (1) (b) of this
section (A)) that, when added to all other shares of the Company in respect
of which that person, directly or indirectly, may exercise or direct the
exercise of voting power as provided herein, would entitle such Person,
immediately after the acquisition, directly or indirectly, to exercise or
direct the exercise of the voting power in the election of Directors of the
Company of a number of the outstanding shares of the Company (as
distinguished from the number of votes to which the holder of such shares
is entitled) within any of the following ranges (each a "Range"):
(i) One-fifth or more but less than one-third of such outstanding
shares,
(ii) One-third or more but less than a majority of such outstanding
shares, and
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(iii) A majority or more of such outstanding shares.
For the purposes of this definition, a bank, broker, nominee, trustee, or other
person who acquires shares in the ordinary course of business for the benefit of
others in good faith and not for the purpose of circumventing this Article
Seventh shall, however, be deemed to have voting power only of shares in respect
of which that person would be able to exercise or direct the exercise of votes
without further instruction from others on the proposed Control Share
Acquisition at the meeting of shareholders called under this Article Seventh.
(b) The acquisition of any shares of the Company does not constitute a
Control Share Acquisition for the purposes of this Article Seventh if the
acquisition is consummated:
(i) Prior to August 28, 1991;
(ii) Pursuant to a contract existing prior to August 28, 1991;
(iii) Under such circumstances that the acquisition does not result in
the Person's being entitled, immediately thereafter and for the first time,
to exercise or direct the exercise of voting power in the election of
Directors of a number of outstanding shares within the Range of one-fifth
or more but less than one-third of such outstanding shares or within a
Range higher than the Range applicable prior to the acquisition;
(iv) By bequest or inheritance, by operation of law upon the death of
any individual, or by any other transfer without valuable consideration,
including a gift that is made in good faith and not for the purpose of
circumventing this Article Seventh;
(v) Pursuant to the satisfaction of a pledge or other security
interest created in good faith and not for the purpose of circumventing
this Article Seventh; or
(vi) Pursuant to a merger, consolidation, combination, or majority
share acquisition adopted or authorized by shareholder vote in compliance
with the provisions of Section 1701.78 or 1701.79 of the Ohio Revised Code
if the Company is the surviving or new corporation in the merger or
consolidation or is the acquiring corporation in a combination or majority
share acquisition.
The acquisition by any Person of shares of the Company in a manner described
under this paragraph (1) (b) of this section (A) shall be deemed a Control Share
Acquisition authorized pursuant to this Article Seventh within the Range
applicable after the acquisition, provided, in the case of an acquisition in a
manner described under clause (1) (b) (iv) or (v) of this Section (A), the
transferor of shares to that Person had previously obtained any authorization of
shareholders required under this Article Seventh or under Section 1701.831 of
the Ohio Revised Code in connection with that transferor's acquisition of shares
of the Company.
(c) The acquisition of shares of the Company in good faith and not for the
purpose of circumventing this Article Seventh from any Person whose Control
Share Acquisition had previously been authorized by shareholders, or from any
Person whose previous acquisition of shares would have constituted a Control
Share Acquisition but for paragraph (1) (b) of this section (A), does not
constitute a Control Share Acquisition unless that acquisition entitles the
acquiring Person, directly or indirectly, to exercise or direct the exercise of
voting power in the election of Directors of the Company of a number of shares
in excess of the Range authorized by the shareholders or defined to be
authorized under paragraph (1)(b) of this section (A).
(2) "Person" includes, without limitation, a natural person, a corporation
(whether nonprofit or for profit), a partnership, a limited liability company,
an unincorporated society or association, and two or more persons having a joint
or common interest.
(3) "Acquiring Person" means any Person who has delivered an Acquiring
Person Statement to the Company pursuant to section (B) of this Article Seventh.
(4) "Acquiring Person Statement" means a written statement that complies
with section (B) of this Article Seventh.
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(5) "Interested Shares" means the shares of the Company in respect of which
any of the following persons may exercise or direct the exercise of the voting
power of the Company in the election of Directors:
(a) An Acquiring Person;
(b) Any officer of the Company elected or appointed by the Directors,
provided, however, that shares which, as of the record date of any special
meeting held pursuant to this Article Seventh, have been owned beneficially
by such person for four or more years shall not be deemed to be "Interested
Shares" for purposes of any vote at such meeting;
(c) Any employee of the Company who is also a Director, provided,
however, that shares which, as of the record date of any special meeting
held pursuant to this Article Seventh, have been owned beneficially by such
person for four or more years shall not be deemed to be "Interested Shares"
for purposes of any vote at such meeting; and
(d) Any Person that acquires such shares for valuable consideration
during the period beginning with the date of the first public disclosure of
a proposed Control Share Acquisition of the Company or any proposed merger,
consolidation, or other transaction that would result in a change in
control of the Company or all or substantially all of its assets, and
ending on the record date established by the directors pursuant to section
1701.45 and section (D) of this Article Seventh, if either of the following
applies:
(i) The aggregate consideration paid or given by the Person who
acquired the shares, and any other Persons acting in concert with the
Person, for all such shares exceeds two hundred fifty thousand dollars;
(ii) The number of shares acquired by the Person who acquired the
shares, and any other Persons acting in concert with the Person, exceeds
one-half of one per cent of the outstanding shares of the corporation
entitled to vote in the election of directors.
(e) Any Person that transfers such shares for valuable consideration
after the record date described in paragraph 5(d) of this section (D) as to
shares so transferred, if accompanied by the voting power in the form of a
blank proxy, an agreement to vote as instructed by the transferee, or
otherwise.
(2) If any part of this division is held to be illegal or invalid in
application, the illegality or invalidity does not affect any legal and valid
application thereof or any other provision or application of this Article
Seventh that can be given effect without the invalid or illegal provision, and
the parts and applications of this Article Seventh are severable.
(B) Any Person who proposes to make a Control Share Acquisition, or seeks
to exercise one-fifth or more of the voting power of the Company under paragraph
(a) of Division II of Article Fourth hereof, shall deliver an Acquiring Person
Statement to the Company's principal executive offices. The Acquiring Person
Statement shall set forth all of the following to the extent appropriate to the
authorization such Person is seeking:
(1) The identity of the Acquiring Person;
(2) A statement that the Acquiring Person Statement is given pursuant
to this Article Seventh;
(3) The number and class of shares of the Company owned, directly or
indirectly, by the Acquiring Person and the date or dates when such shares
were acquired;
(4) The Range under which the proposed Control Share Acquisition
would, if consummated, fall;
(5) A description in reasonable detail of the terms of the proposed
Control Share Acquisition; and
(6) Representations of the Acquiring Person, together with a statement
in reasonable detail of the facts upon which they are based, that the
proposed Control Share Acquisition, if consummated, will not be contrary to
law and that the Acquiring Person has the financial capacity to make the
proposed Control Share Acquisition.
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(C) Within ten days after receipt of an Acquiring Person Statement that
complies with section (B) of this Article Seventh, the Directors of the Company
shall call a special meeting of shareholders of the Company for the purpose of
voting on the proposed Control Share Acquisition. Unless the Acquiring Person
agrees in writing to another date, the special meeting of shareholders shall be
held within fifty days after receipt by the Company of the Acquiring Person
Statement. If the Acquiring Person so requests in writing at the time of
delivery of the Acquiring Person Statement, the special meeting shall be held no
sooner than thirty days after receipt by the Company of the Acquiring Person
Statement. The special meeting of shareholders shall not be held later than any
other special meeting that is called, after receipt by the Company of the
Acquiring Person Statement, in compliance with Section 1701.76, 1701.78, 1701.79
or 1701.83 of the Ohio Revised Code or this Article Seventh.
(D) Notice of the special meeting of shareholders shall be given, as
promptly as reasonably practicable, to all shareholders of record, whether or
not entitled to vote thereat, as of the record date fixed for the meeting. The
notice shall include or be accompanied by the following:
(1) A copy of the Acquiring Person Statement delivered to the Company
pursuant to this Article Seventh; and
(2) A statement by the Company, authorized by its Directors, of its
position or recommendation, or that it is taking no position or making no
recommendation, with respect to the proposed Control Share Acquisition.
(E) The Acquiring Person may make the proposed Control Share Acquisition if
both of the following occur:
(1) The shareholders of the Company who hold shares entitling them to
vote in the election of Directors authorize the acquisition at the special
meeting held for that purpose at which a quorum is present by an
affirmative vote of a majority of the voting power of the Company in the
election of Directors represented at such meeting in person or by proxy and
a majority of the portion of such voting power excluding the voting power
of Interested Shares REPRESENTED AT THE MEETING IN PERSON OR BY PROXY. A
quorum shall be deemed to be present at such meeting if at least a majority
of the voting power of the Company in the election of directors is
represented at the meeting in person or by proxy.
(2) The acquisition is consummated, in accordance with the terms so
authorized, not later than three hundred sixty days following shareholder
authorization of the Control Share Acquisition.
(F) As provided in Section 1701.48 of the Ohio Revised Code, no proxy
appointed by or in connection with a shareholder authorization of a Control
Share Acquisition is valid if it (1) provides that it is irrevocable or (2) is
sought, appointed, and received other than (a) in accordance with all applicable
requirements of the laws of the State of Ohio and of the United States and (b)
separate and apart from the sale or purchase, contract or tender for sale or
purchase, or request or invitation for tender for sale of purchase, of shares of
the Company.
(G) Shares acquired in violation of this Article Seventh shall be subject
to restrictions on transfer of such shares and such other provisions as may be
contained in the Regulations of the Company.
EIGHTH. No holder of shares of the Company of any class, as such, shall
have any pre-emptive right to purchase or subscribe for shares of the Company,
of any class, or other securities of the Company, of any class, whether now or
hereafter authorized.
NINTH. The Company, by action of its directors and without action by its
shareholders, may purchase its own shares in accordance with the provisions of
the Ohio General Corporation Law. Such purchases may be made either in the open
market or at public or private sale, in such manner and amounts of any one class
or any combination of classes, from such holder or holders of outstanding shares
of the Company, and at such prices as the directors shall from time to time
determine without regard to differences among the classes in price and other
terms under which shares may be purchased or in relative number of shares that
may be available for purchase.
TENTH. These Amended Articles of Incorporation supersede the existing
Amended Articles of Incorporation of the Company.
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[REGULATIONS THAT WILL BE IN EFFECT FOLLOWING THE COMBINATION]
ANNEX E
THE J. M. SMUCKER COMPANY
ORRVILLE, OHIO 44667
REGULATIONS
AS AMENDED AUGUST , 2000
ARTICLE I
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of shareholders of the
Company for the election of directors, the consideration of reports made before
the meeting, and the transaction of such other business as may be specified in
the notice of the meeting or as may properly be brought before the meeting shall
be held at the principal office of the Company in Orrville, Ohio, or at such
other place either within or without the State of Ohio as may be designated by
the Board of Directors or by the President and specified in the notice of such
meeting at ten o'clock a.m., or at such other time as may be designated by the
Board of Directors or by the President and specified in the notice of the
meeting, on the third Friday of August or such other date specified in the
notice of the meeting. The Board of Directors may postpone and reschedule any
previously scheduled annual meeting of the shareholders.
SECTION 2. Special Meeting. Special meetings of the shareholders of the
Company may be held on any business day, when called by the Chairman of the
Board, or the President, or by a majority of the members of the Board of
Directors acting with or without a meeting, or by the persons who hold
twenty-five percent of all the shares outstanding and entitled to vote thereat.
Such meetings shall be called to convene between nine o'clock a.m. and four
o'clock p.m. and shall be held at the principal office of the Company, unless
the same is called by the Board of Directors, in which case such meetings may be
held at any place in the State of Ohio designated by the Board and specified in
the notice of such meeting. The Board of Directors may postpone and reschedule
any previously scheduled special meeting of the shareholders.
SECTION 3. Notice of Meetings. Not less than ten days before the date
fixed for a meeting of shareholders, written notice of the time, place, and
purposes of such meeting shall be given by the Secretary, or by the Assistant
Secretary, or by any other person or persons required or permitted by law to
give such notice. The notice shall be served upon or mailed to each shareholder
entitled to vote at or to notice of the meeting who is of record as of the day
next preceding the day on which notice is given or, if a record date thereafter
is duly fixed, of record as of said date; if mailed, the notice shall be
directed to the shareholders at their respective addresses as they appear upon
the records of the Company. Notice of the time, place, and purpose of any
meeting of shareholders may be waived in writing, either before or after the
holding of such meeting, by any shareholder entitled to notice, which writing
shall be filed with or entered upon the records of the meeting. The attendance
of any shareholder at any such meeting without protesting the lack of proper
notice shall be deemed to be a waiver of notice of such meeting.
SECTION 4. Quorum. Except as may be otherwise provided by law or by the
Articles of Incorporation, at any meeting of the shareholders, the holders of
shares entitled to exercise a majority of the voting power of the Company and
present in person or by proxy shall constitute a quorum for such meeting; except
that no action required by law or by the Articles of Incorporation or these
Regulations to be taken by a specified proportion of the voting power of the
Company or of any class of shares may be taken by a lesser proportion; and
except that the holders of shares entitled to exercise a majority of the voting
power of the Company represented thereat, whether or not a quorum is present,
may adjourn such meeting from time to time if any meeting is adjourned to
another time or place, no notice as so such adjourned meeting need be given
other than by an announcement at the meeting at which such adjournment is taken.
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SECTION 5. Proxies. Every proxy must be in a form permitted by chapter
1701 of the Ohio Revised Code. A shareholder may revoke any proxy that is not
irrevocable by attending the meeting and voting in person or by delivering to
the Company of a verifiable notification of revocation or a later appointment.
SECTION 6. Approval and Ratification of Acts of Officers and
Directors. Except as otherwise provided by the Articles of Incorporation or by
law, any contact, act or transaction, prospective or past, of the Company, or of
the directors, or of the officers may be approved or ratified by the affirmative
vote at a meeting of the shareholders, or by the written consent, with or
without a meeting, of the holders of record of shares entitling them to exercise
a majority of the voting power of the Company, and such approval or modification
shall be as valid and binding as though affirmatively voted for or consented to
by every shareholder of the Company.
SECTION 7. Order of Business. (a) The Chairman, or such other officer of
the Company designated by a majority of the total number of directors that the
Company would have if there were no vacancies on the Board of Directors (such
number being referred to as the "Whole Board"), will call meetings of
shareholders to order and will act as presiding officer thereof. Unless
otherwise determined by the Board of Directors prior to the meeting, the
presiding officer of the meeting of shareholders will also determine the order
of business and have the authority in his or her sole discretion to regulate the
conduct of any such meeting including, without limitation, by imposing
restrictions on the persons (other than shareholders of the Company or their
duly appointed proxies) who may attend any such shareholders' meeting, by
ascertaining whether any shareholder or his proxy may be excluded from any
meeting of shareholders based upon any determination by the presiding officer,
in his sole discretion, that any such person has unduly disrupted or is likely
to disrupt the proceedings of the meeting, and by determining the circumstances
in which any person may make a statement or ask questions at any meeting of
shareholders.
(b) At an annual meeting of the shareholders, only such business will be
conducted or considered as is properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given in accordance with Section 3
of these Regulations, (ii) otherwise properly brought before the meeting by the
presiding officer or by or at the direction of a majority of the Whole Board, or
(iii) otherwise properly requested to be brought before the meeting by a
shareholder of the Company in accordance with Section 7(c) of this Article I of
these Regulations.
(c) For business to be properly requested by a shareholder to be brought
before an annual meeting, the shareholder must (i) be a shareholder of the
Company of record at the time of the giving of the notice for such annual
meeting provided for in these Regulations, (ii) be entitled to vote at such
meeting, and (iii) have given timely notice thereof in writing to the Secretary.
To be timely, a shareholder's notice must be delivered to or mailed and received
at the principal executive offices of the Company not less than 60 calendar days
before the first anniversary of the date on which the Company first mailed its
proxy materials for the prior year's annual meeting of shareholders; provided,
however, that in the event public announcement of the date of the annual meeting
is not made at least 75 calendar days prior to the date of the annual meeting,
notice by the shareholder to be timely must be so received not later than the
close of business on the 10th calendar day following the day on which public
announcement is first made of the date of the annual meeting. A shareholder's
notice to the Secretary must set forth as to each matter the shareholder
proposes to bring before the annual meeting (A) a description in reasonable
detail of the business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (B) the name and
address, as they appear on the Company's books, of the shareholder proposing
such business and of the beneficial owner, if any, on whose behalf the proposal
is made, (C) the class and number of shares of the Company that are owned
beneficially and of record by the shareholder proposing such business and by the
beneficial owner, if any, on whose behalf the proposal is made, and (D) any
material interest of such shareholder proposing such business and the beneficial
owner, if any, on whose behalf the proposal is made in such business.
Notwithstanding the foregoing provisions of this Code of Regulations, a
shareholder must also comply with all applicable requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder with respect to
the matters set forth in this Section 7. For purposes of this Section 7, "public
announcement" means disclosure in a press release reported by the Dow Jones News
Service,
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Associated Press, or comparable national news service or in a document publicly
filed by the Company with the Securities and Exchange Commission pursuant to
Sections 13, 14, or 15(d) of the Securities Exchange Act of 1934 or publicly
filed by the Company with any national securities exchange or quotation service
through which the Company's stock is listed or traded, or furnished by the
Company to its shareholders. Nothing in this Section 7(c) will be deemed to
affect any rights of shareholders to request inclusion of proposals in the
Company's proxy statement pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934.
(d) At a special meeting of shareholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) or (ii) otherwise brought
before the meeting by the presiding officer or by or at the direction of a
majority of the Whole Board.
(e) The determination of whether any business sought to be brought before
any annual or special meeting of the shareholders is properly brought before
such meeting in accordance with this Section 7 will be made by the presiding
officer of such meeting. If the presiding officer determines that any business
is not properly brought before such meeting, he or she will so declare to the
meeting and any such business will not be conducted or considered.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Number and Classification; Election Term of Office. The Board
of Directors shall be divided into three classes. Each class shall consist of
such number of directors, not fewer than three, (a) as the shareholders at any
meeting of shareholders called for the purpose of electing directors of which a
quorum is present, by the affirmative vote of the holders of a majority of the
shares represented at the meeting and entitled to vote on the proposal may
determine, or (b) as the directors, by the vote of a majority of the directors
then in office may determine, except that after the number of directors in any
class has been fixed by the shareholders, the directors may not increase or
decrease that number by more than two. Unless and until otherwise so fixed or
changed, two classes shall each consist of four directors and one class shall
consist of three directors. A separate election shall be held for each class of
directors at any meeting of shareholders at which a member or members of more
than one class of directors is being elected. At each annual election the
directors elected to the class whose term shall expire in that year shall hold
office for a term of three years and until their respective successors are
elected. In case of any increase in the number of directors of any class, any
additional directors elected to that class shall hold office for a term that
shall coincide with the full term on the remainder of the term, as the case may
be, of the class.
SECTION 2. Vacancies. In the event of the occurrence of any vacancy or
vacancies in the Board of Directors, however caused, the remaining directors,
though less than a majority of the whole authorized number of directors, may, by
the vote of a majority of their number, fill any such vacancy for the balance of
the unexpired term.
SECTION 3. Organization Meeting. Immediately after each annual meeting of
the shareholders, the newly elected Board of Directors shall hold an
organization meeting at the same place for the purpose of electing officers and
transacting any other business. Notice of such meeting need not be given.
SECTION 4. Regular Meetings. Regular meetings of the Board of Directors
may be held at such times and places within or without the State of Ohio as may
be provided for in by-laws or resolutions adopted by the Board of Directors and
upon such notice, if any, as shall be so provided.
SECTION 5. Special Meetings. Special meetings of the Board of Directors
may be held at any time within or without the State of Ohio upon call by the
Chairman of the Board or the President or a Vice President or any two directors.
Notice of each such meeting shall be given to each director by letter or
telegram or in person not less than three days prior to such meeting, provided,
however, that attendance of any director at any such meeting without protesting
the lack of proper notice shall be deemed to be a waiver
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of notice of such meeting and such notice may be waived in writing, either
before or after the invoking of such meeting, by any director, which writing
shall be filed with or entered upon the records of the meeting. Unless otherwise
indicated in the notice thereof, any business may be transacted at any
organization, regular, or special meeting.
SECTION 6. Quorum. A quorum of the Board of Directors shall consist of a
majority of other members of the Board of Directors then in office; provided
that any organization meeting or other meeting duly held, whether a quorum is
present or otherwise, may, by vote of a majority of the directors present at the
meeting, adjourn from time to time and place to place without notice other than
by announcement at the meeting. At each meeting of the Board at which a quorum
is present, all questions and business shall be determined by a majority vote of
those present except as in these Regulations otherwise expressly provided.
SECTION 7. Committees. The Board of Directors may at any time appoint from
its members an Executive, Finance or any other committee or committees,
consisting of such number of members as the Board may deem advisable, each of
which member shall hold office during the pleasure of the Board. Any such
committee shall act only in the intervals between meetings of the Board and
shall have such powers as may, from time to time, be delegated by the Board,
except the power to fill vacancies in the Board or in any committee of the
board. Subject to the aforesaid exception, any person dealing with the Company
shall be entitled to rely upon any act of, or authorization of an act by, such
committee to the same extent as if such action had been taken or authorized by
the Board of Directors. Each committee shall keep full and complete records of
all meetings and actions, which shall be open to inspection by the Board of
Directors. Unless otherwise ordered by the Board of Directors, any such
committee may prescribe its own rules for calling and holding meetings, and for
its own method of procedure, and may act by a majority of its members at a
meeting or without a meeting by a writing signed by all of its members.
SECTION 8. By-Laws. The Board of Directors may adopt By-Laws for its own
government, not inconsistent with the Articles of Incorporation or these
Regulations.
ARTICLE III
OFFICERS
SECTION 1. Election and Designation of Officers. The Board of Directors,
at its organization meeting, may elect a Chairman of the Board and shall elect a
President, one or more Vice Presidents, a Secretary, a Treasurer, and in its
discretion, an Assistant Secretary or Secretaries, an Assistant Treasurer or
Treasurers, and such other officers as the Board may deem necessary. The
Chairman of the Board and the President shall be directors, but no one of the
other officers need be a director; provided, however, that a Vice President who
is not a director shall not succeed the office of President. Any two or more of
such offices, except those of President and Vice President, or Secretary and
Assistant Secretary, or Treasurer and Assistant Treasurer, may be held by the
same person, but no officer shall execute, acknowledge, or verify any instrument
in more than one capacity, if such instrument is required to be executed,
acknowledged or verified by two or more officers.
SECTION 2. Term of Office; Vacancies. The officers of the Company shall
hold office until the next organization meeting of the Board of Directors and
until their successors are elected, except in case of resignation, death or
removal. The Board of Directors may remove any officer at any time with or
without cause by a majority vote of the Whole Board. A vacancy in any office,
however created, may be filled by election by the Board of Directors.
SECTION 3. Chairman of the Board. The Chairman of the Board, if any, shall
preside at all meetings of the Board of Directors and shall have such power and
duties as may be prescribed by the Board of Directors.
SECTION 4. President. Subject to directions of the Board of Directors, the
President shall have general executive supervision over the property, business,
and affairs of the Company. He may execute all authorized deeds, mortgages,
bonds, contracts, and other obligations in the name of the Company and shall
have such other power and duties as may be prescribed by the Board of Directors.
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SECTION 5. Vice Presidents. The Vice Presidents in the order designated
shall perform all of the duties of the President in case of the absence or
disability of the latter or when circumstance prevent the latter from acting,
together with such other duties as the Board of Directors may prescribe. The
power of such Vice Presidents to execute all authorized deeds, mortgages, bonds,
contracts, and other obligations in the name of the Company shall be coordinated
with like powers of the President and any such instrument so executed by any of
such Vice Presidents shall be as valid and binding as though executed by the
President.
SECTION 6. Secretary. The Secretary shall keep the minutes of meetings of
the shareholders and the Board of Directors. He shall keep such books as may be
required by the Board of Directors, shall give notices of shareholders and
directors meetings required by law, or by these regulations, or otherwise, and
have such other powers and duties as the Board of Directors may prescribe.
SECTION 7. Treasurer. The Treasurer shall receive and have in charge all
money, bills, notes, bonds, stocks in other corporations, and similar property
belonging to the Company, and shall do with the same as may be ordered by the
Board of Directors. He shall keep accurate financial accounts and hold the same
open for the inspection and examination of the directors. On the expiration of
his term of office, he shall turn over to his successor, or to the Board of
Directors, all property, books, papers, and money of the Company in his hands.
SECTION 8. Other Officers. The Assistant Secretaries, Assistant
Treasurers, if any, and any other officers that the Board of Directors may elect
shall have such power and duties as the Board of Directors may prescribe.
SECTION 9. Delegation of Duties. The Board of Directors is authorized to
delegate the duties of any officer to any other officer and generally to control
the action of the officers and to require the performance of duties in addition
to those mentioned herein.
ARTICLE IV
COMPENSATION
SECTION 1. Directors and Members of Committees. Members of the Board of
Directors and members of any committees of the Board shall, as such, receive
such compensation, which may be either a fixed sum for attendance at each
meeting of the Board, or at each meeting of the committee, or stated
compensation payable at intervals, or shall otherwise be compensated as may be
determined by the Board of Directors or any committee or the Board, which
compensation may be in different amounts for various members of the Board or any
committee; provided, however, that no director shall receive compensation as
such, or as a member of any committee who is receiving compensation on a
full-time basis from the Company either as an officer or an employee. No member
of the Board of Directors and no member of any committee of the Board shall be
disqualified from being counted in the determination of a quorum at any meeting
of either the Board or a committee of the Board by reason of the fact that
matters affecting his own compensation as a director, member or a committee of
the Board, officer, or employee are to be determined, or shall be disqualified
from acting other than on matters directly relating to such member's own
compensation.
SECTION 2. Officers and Employees. The compensation of officers and
employees of the Company, or the method of fixing such compensation, shall be
determined by or pursuant to authority conferred by the Board of Directors or
any committee of the Board of Directors. Such compensation may be by way of
fixed salary, or on the basis of earnings of the Company, or any combination
thereof, or otherwise, as may be determined from time to time by the Board of
Directors or any committee of the Board.
ARTICLE V
INDEMNIFICATION
SECTION 1. Indemnification. The Company shall indemnify, to the full
extent then permitted by law, any person who is or was a party or is threatened
to be made a party to any threatened, pending, or
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completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, by reason of the fact that such person is or was a member of
the Board of Directors or an officer or employee of the Company, or is or was
serving at the request of the Company as a director, trustee, officer, or
employee of another corporation, partnership, joint venture, trust, or other
enterprise. The Company shall pay to the full extent then required or permitted
by law expenses, including attorney's fees, incurred by a member of the Board of
Directors in defending any such action, suit, or proceeding as they are
incurred, in advance of the final disposition thereof, and may pay in the same
manner to the full extent then permitted by law such expenses incurred by any
other person. The indemnification and payment of expenses provided hereby shall
not be exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under any law, the Articles of Incorporation, or
any agreement, vote of shareholders or disinterested members of the Board of
Directors, or otherwise, both as to action in official capacities and as to
action in another capacity while a member of the Board of Directors or an
officer or employee of the Company, and shall continue as to a person who has
ceased to be a director, trustee, officer or employee and shall inure to the
benefit of the heirs, executors, and administrators of such person.
SECTION 2. Insurance. The Company may, to the full extent then permitted
by law and authorized by the Board of Directors, purchase and maintain insurance
or furnish similar protection, including but not limited to, trust funds,
letters of credit, or self-insurance, on behalf of or for any persons described
in Section 1 against any liability asserted against and incurred by any such
person in any such capacity, or arising out of his or her status as such,
whether or not the Company would have the power to indemnify such person against
such liability. Insurance may be purchased from or maintained with a person in
which the Company has a financial interest.
SECTION 3. Agreements. The Company, upon approval by the Board of
Directors, may enter into agreements with any persons whom the Company may
indemnify under these Regulations or under law and undertake thereby to
indemnify such persons and to pay in advance of any final disposition the
expenses incurred by them in defending any action, suit, or proceeding against
them, whether or not the Company would be required or permitted under these
Regulations to indemnify any such person.
ARTICLE VI
RECORD DATES
The Board of Directors may fix a date, which shall not be a past date and
which shall be not more than sixty days preceding the date of any meeting of
shareholders, or the date fixed for the payment of any dividend or distribution,
or the date for the allotment of rights, or (subject to contract rights with
respect thereto) the date when any change or conversion or exchange of shares
shall be made or go into effect, or the date as of which written consents,
waivers, or releases are to be obtained from shareholders, as a record date for
the determination of the shareholders entitled to notice of and to vote at any
such meeting, or any adjournments thereof, or entitled to receive payment of any
such dividend, distribution, or allotment of rights, or to exercise the rights
in respect to any such change, conversion, or exchange of shares, or to execute
consents, waivers, or releases, and in such case, only shareholders of record on
the date so fixed shall be entitled to notice of and to vote at such meetings,
or any adjournments thereof, or to receive payment of such dividend,
distributions, or allotments of rights, or to exercise such rights, or to
execute such consents, waivers, or releases, as the case may be, notwithstanding
any transfer of any shares on the books of the Company after any record date
fixed as aforesaid. The Board of Directors may close the books of the Company
against transfers of shares during the whole or any part of such period,
including the time of such meeting of the shareholders or any adjournments
thereof.
ARTICLE VII
CERTIFICATES FOR SHARES
SECTION 1. Form of Certificates and Signatures. Certificates for shares
shall be in such form as the Board of Directors may from time to time prescribe.
Such certificates shall be signed by the Chairman of the
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Board of Directors, or the President, or a Vice President, and by the Secretary,
or an Assistant Secretary, or the Treasurer, or an Assistant Treasurer of the
Company, and shall certify the number and class of shares held by the respective
shareholders in such Company. When such certificate is countersigned by an
incorporated transfer agent or registrar, the signature of any of said officers
of the Company may be facsimile, engraved, stamped, or printed. Although any
officer of the Company whose manual or facsimile signature is affixed to a share
certificate shall cease to be such officer before the certificate is delivered,
such certificate nevertheless shall be effective in all respects when delivered.
SECTION 2. Transfer of Shares. Shares of the Company shall be transferable
upon the books of the Company by the holders thereof, in person, or by a duly
authorized attorney, upon surrender and cancellation of certificates for a like
number of shares of the same class or series, with duly executed assignment and
power of transfer endorsed thereon or attached thereto, and with such proof of
the authenticity of the signature to such assignment and power of transfer as
the Company or its agent may reasonably require.
Notwithstanding the foregoing, unless the conditions set forth in sections
(B) through (E) of Article Seventh of the Amended Articles of Incorporation of
the Company have been satisfied, no transfer of shares of the Company to which
such conditions were applicable shall be effective as to the Company, the
transferor, or the transferee. Any Person (as such term is defined in paragraph
(2) of Section (A) of such Article Seventh) who acquires or attempts to acquire
shares of the Company in violation of such Article Seventh shall have no right
to vote any of such shares of the Company on any manner to be submitted to the
vote of the shareholders; in addition, those shares of the Company acquired in
violation of such Article Seventh shall, at the option of the Directors of the
Company, be subject to redemption, in whole or in part, by the Company at a
purchase price per share equal to the lesser of (a) the price paid by the Person
in acquiring the shares of the Company in violation of such Article Seventh and
(b) the arithmetic average of the daily closing sale prices for shares of the
same class or series traded on a national securities exchange or in the
over-the-counter market for the ten trading days preceding (1) the date on which
the Person, in violation of such Article Seventh, acquired the first of the
shares of the Company or (2), if applicable, the date on which the Person
publically announced his intention to acquire beneficial ownership of Common
Shares in a control share acquisition (as defined in such Article Seventh),
whichever compensation produces the lower average.
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[OUTSIDE BACK COVER]
MAP SHOWING LOCATION OF
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In general, a director of an Ohio corporation will not be found to have
violated his or her fiduciary duties unless there is proof by clear and
convincing evidence that the director (1) has not acted in good faith, (2) has
not acted in a manner the director reasonably believes to be in or not opposed
to the best interests of the corporation, or (3) has not acted with the care
that an ordinarily prudent person in a like position would use under similar
circumstances. Monetary damages for any act taken or omission made as a director
are generally awarded only if it is proved by clear and convincing evidence that
the director undertook such act or omission either with deliberate intent to
cause injury to the corporation or with reckless disregard for the best
interests of the corporation.
Under Ohio law, a corporation must indemnify its directors, officers,
employees, and agents against expenses reasonably incurred in connection with
the successful defense (on the merits or otherwise) of an action, suit, or
proceeding. A corporation may indemnify such persons in actions, suits, and
proceedings (including certain derivative suits) if the individual has acted in
good faith and in a manner that the individual believes to be in or not opposed
to the best interests of the corporation. In the case of a criminal proceeding,
the individual must also have no reasonable cause to believe that his or her
conduct was unlawful.
Indemnification may be made only if ordered by a court or if authorized in
a specific case upon a determination that the applicable standard of conduct has
been met. Such a determination may be made by a majority of the disinterested
directors, by independent legal counsel, or by the shareholders.
Under Ohio law, a corporation may pay the expenses of any indemnified
individual as they are incurred, in advance of the final disposition of the
matter, if the individual provides an undertaking to repay the amount if it is
ultimately determined that the individual is not entitled to be indemnified.
Ohio law generally requires all expenses, including attorney's fees, incurred by
a director in defending any action, suit, or proceeding to be paid by the
corporation as they are incurred if the director agrees (i) to repay such
amounts in the event that it is proved by clear and convincing evidence that the
director's action or omission was undertaken with deliberate intent to cause
injury to the corporation or with reckless disregard for the best interests of
the corporation and (ii) to reasonably cooperate with the corporation concerning
the action, suit, or proceeding.
Smucker's regulations require Smucker to indemnify, to the full extent
permitted by Ohio law, any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit, or proceeding (whether civil,
criminal, administrative, or investigative) because that person is or was a
director, officer, or employee of Smucker or was serving, at the request of
Smucker, as a director, trustee, officer, or employee of another entity. Smucker
also has in effect insurance policies for general officers' and directors'
liability insurance covering all of its directors and officers.
Following the merger, the indemnification arrangements discussed above will
be expanded to extend to persons serving as an agent of Smucker or serving at
Smucker's request as an agent of another entity. In addition, Smucker may enter
into indemnification agreements with each of its directors and officers that
indemnify its directors and officers to the maximum extent permitted by law.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
*2 Agreement of Merger, dated as of , 2000, by and
between The J. M. Smucker Company and JMS-Ohio, Inc.
(included as Annex A to the proxy statement contained in
this registration statement)
*3(a) Articles of Incorporation of JMS-Ohio, Inc. (included as
Annex D to the proxy statement contained in this
registration statement)
*3(b) Regulations of JMS-Ohio, Inc. (included as Annex E to the
proxy statement contained in this registration statement)
+4(a) Specimen Common Share Certificate of The J. M. Smucker
Company
+4(b) Rights Agreement, dated as April 22, 1999, between The J. M.
Smucker Company and Harris Trust and Savings Bank, as rights
agent, incorporated by reference to Form 8-K filed with the
Securities and Exchange Commission on April 23, 1999
+5(a) Opinion of Jones, Day, Reavis & Pogue regarding the validity
of the securities being registered
+8 Tax Opinion of Jones, Day, Reavis & Pogue
+10 Documents evidencing the financing of the combination and
the merger
*23(a) Consent of Ernst & Young, LLP
+23(b) Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5)
*23(c) Consent of William Blair & Company
*24 Power of Attorney for each director and officer of The J. M.
Smucker Company signing this registration statement
+99(a) Form of Election and Transmittal Letter for Class A and
Class B common shares of The J. M. Smucker Company
*99(b) Forms of Proxy
</TABLE>
- ---------------
* Filed herewith
+ To be filed by amendment
(b) Financial Statement Schedules.
None.
(c) Reports, Opinions, or Appraisals.
The opinion of William Blair & Company is included as Annex C to the
proxy statement contained in this registration statement.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE> 101
(b) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(c) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE> 102
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Orrville, state of Ohio,
on May 15, 2000.
The J. M. Smucker Company
By: /s/ STEVEN J. ELLCESSOR
------------------------------------
Name: Steven J. Ellcessor
Title: Vice President, Finance
and
Administration,
Secretary/Treasurer,
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ TIM SMUCKER* Chairman and Director (Principal May 15, 2000
- --------------------------------------------------- Executive Officer)
Timothy P. Smucker
/s/ RICHARD K. SMUCKER* President and Director (Principal May 15, 2000
- --------------------------------------------------- Executive Officer)
Richard K. Smucker
/s/ STEVEN J. ELLCESSOR Vice President-Finance and May 15, 2000
- --------------------------------------------------- Administration,
Steven J. Ellcessor Secretary/Treasurer, and
General Counsel (Principal
Financial Officer)
/s/ MARK R. BELGYA Corporate Controller May 15, 2000
- --------------------------------------------------- (Principal Accounting Officer)
Mark R. Belgya
/s/ VINCENT C. BYRD* Director May 15, 2000
- ---------------------------------------------------
Vincent C. Byrd
/s/ KATHRYN W. DINDO* Director May 15, 2000
- ---------------------------------------------------
Kathryn W. Dindo
/s/ FRED A. DUNCAN* Director May 15, 2000
- ---------------------------------------------------
Fred A. Duncan
/s/ ELIZABETH VALK LONG Director May 15, 2000
- ---------------------------------------------------
Elizabeth Valk Long
Director
- ---------------------------------------------------
Russell G. Mawby
</TABLE>
II-4
<PAGE> 103
<TABLE>
<S> <C> <C>
Director
- ---------------------------------------------------
Charles S. Mechem, Jr.
Director
- ---------------------------------------------------
Benjamin B. Tregoe, Jr.
/s/ WILLIAM H. STEINBRINK* Director May 15, 2000
- ---------------------------------------------------
William H. Steinbrink
Director
- ---------------------------------------------------
William Wrigley, Jr.
</TABLE>
- ---------------
* The undersigned, by signing his name hereto, does sign and execute this
registration statement pursuant to the powers of attorney executed by the
above-named officers and directors of the registrant, which are being filed
herewith with the Securities and Exchange Commission on behalf of such
officers and directors.
By: /s/ STEVEN J. ELLCESSOR
------------------------------------
Steven J. Ellcessor
II-5
<PAGE> 104
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
*2 Agreement of Merger, dated as of , 2000 by and
between The J. M. Smucker Company and JMS-Ohio, Inc.
(included as Annex A to the proxy statement contained in
this registration statement)
*3(a) Articles of Incorporation of JMS-Ohio, Inc. (included as
Annex D to the proxy statement contained in this
registration statement)
*3(b) Regulations of JMS-Ohio, Inc. (included as Annex E to the
proxy statement contained in this registration statement)
+4(a) Specimen Common Share Certificate of The J. M. Smucker
Company
+4(b) Rights Agreement, dated as April 22, 1999, between The J. M.
Smucker Company and Harris Trust and Savings Bank, as rights
agent, incorporated by reference to Form 8-K filed with the
Securities and Exchange Commission on April 23, 1999
+5(a) Opinion of Jones, Day, Reavis & Pogue regarding the validity
of the securities being registered
+8 Tax Opinion of Jones, Day, Reavis & Pogue
+10 Documents evidencing the financing of the combination and
the merger
*23(a) Consent of Ernst & Young, LLP
+23(b) Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5)
*23(c) Consent of William Blair & Company
*24 Power of Attorney for each director and officer of The J. M.
Smucker Company signing this registration statement
+99(a) Form of Election and Transmittal Letter for Class A and
Class B common shares of The J. M. Smucker Company
*99(b) Forms of Proxy
</TABLE>
- ---------------
* Filed herewith
+ To be filed by amendment
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
included in the Proxy Statement that is made part of the Registration Statement
(Form S-4 No. 333- ) and related Prospectus of The J.M. Smucker Company
for the registration of shares of its common stock and to the
incorporation by reference therein of our reports dated June 18, 1999, with
respect to the consolidated financial statements of The J. M. Smucker Company
incorporated by reference in its Annual Report (Form 10-K) for the year ended
April 30, 1999 and the related financial statement schedule included therein,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Akron, Ohio
May 15, 2000
<PAGE> 1
EXHIBIT 23(c)
CONSENT OF WILLIAM BLAIR & COMPANY, L.L.C.
May 15, 2000
The J. M. Smucker Company
Strawberry Lane
Orrville, OH 44667-0280
Dear Sirs:
We hereby consent to the inclusion in the Registration Statement on Form
S-4, relating to the proposed merger of a newly formed, wholly owned subsidiary
of Smucker with and into Smucker, of our opinion letter appearing as Annex C to
the Proxy Statement/Prospectus which is a part of the Registration Statement,
and to the references thereto under the captions "SUMMARY - Additional
Information - Fairness Opinion of William Blair & Company;" "SPECIAL FACTORS -
Background of the Proposed Combination;" "SPECIAL FACTORS - Recommendation of
the Smucker Board; Reasons for the Combination;" and "SPECIAL FACTORS - Opinion
of Smucker's Financial Advisor." In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1993 or the rules and regulations adopted by
the Securities and Exchange Commission thereunder.
Very truly yours,
WILLIAM BLAIR & COMPANY, L.L.C.
<PAGE> 1
Exhibit 24
DIRECTORS AND OFFICERS
OF THE J.M. SMUCKER COMPANY
POWER OF ATTORNEY
Each of the undersigned officers, directors and other representatives of
The J.M. Smucker Company, an Ohio Corporation, (the "Company"), hereby
constitutes and appoints Timothy P. Smucker, Richard Smucker, and Steven J.
Ellcessor and each of them, with full power of substitution and resubstitution,
as attorneys-in-fact or attorney-in-fact of the undersigned, for him and in his
name, place and stead, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Securities Act") one or more
Registration Statement(s) on Form S-4 relating to the registration of the
offering of shares of a new class of common stock of the Company pursuant to a
merger of JMS-Ohio, Inc., a wholly owned subsidiary of Smucker with and into
Smucker, with any and all amendments, supplements and exhibits thereto,
including pre-effective and post-effective amendments or supplements or any
additional registration statement filed pursuant to Rule 462 promulgated under
the Securities Act, with full power and authority to do and perform any and all
acts and things whatsoever that any of said attorneys or their substitutes may
deem necessary or desirable, in his or their sole discretion, with any such act
or thing being hereby ratified and approved in all respects without any further
act or deed whatsoever.
Executed as of May 15, 2000
/s/ TIMOTHY P. SMUCKER
- -------------------------------------------------------
Timothy P. Smucker
/s/ R. K. SMUCKER
- -------------------------------------------------------
Richard K. Smucker
- -------------------------------------------------------
Steven J. Ellcessor
- -------------------------------------------------------
Mark R. Belgya
/s/ VINCENT C. BYRD
- -------------------------------------------------------
Vincent C. Byrd
/s/ KATHRYN W. DINDO
- -------------------------------------------------------
Kathryn W. Dindo
/s/ FRED A. DUNCAN
- -------------------------------------------------------
Fred A. Duncan
- -------------------------------------------------------
Elizabeth Valk Long
- -------------------------------------------------------
Russell G. Mawby
- -------------------------------------------------------
Charles S. Mechem, Jr.
- -------------------------------------------------------
Benjamin B. Tregoe, Jr.
- -------------------------------------------------------
William H. Steinbrink
- -------------------------------------------------------
William Wrigley, Jr.
<PAGE> 2
Exhibit 24
DIRECTORS AND OFFICERS
OF THE J.M. SMUCKER COMPANY
POWER OF ATTORNEY
Each of the undersigned officers, directors and other representatives of
The J.M. Smucker Company, an Ohio Corporation, (the "Company"), hereby
constitutes and appoints Timothy P. Smucker, Richard Smucker, and Steven J.
Ellcessor and each of them, with full power of substitution and resubstitution,
as attorneys-in-fact or attorney-in-fact of the undersigned, for him and in his
name, place and stead, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Securities Act") one or more
Registration Statement(s) on Form S-4 relating to the registration of the
offering of shares of a new class of common stock of the Company pursuant to a
merger of JMS-Ohio, Inc., a wholly owned subsidiary of Smucker with and into
Smucker, with any and all amendments, supplements and exhibits thereto,
including pre-effective and post-effective amendments or supplements or any
additional registration statement filed pursuant to Rule 462 promulgated under
the Securities Act, with full power and authority to do and perform any and all
acts and things whatsoever that any of said attorneys or their substitutes may
deem necessary or desirable, in his or their sole discretion, with any such act
or thing being hereby ratified and approved in all respects without any further
act or deed whatsoever.
Executed as of May 15, 2000
- -------------------------------------------------------
Timothy P. Smucker
- -------------------------------------------------------
Richard K. Smucker
- -------------------------------------------------------
Steven J. Ellcessor
- -------------------------------------------------------
Mark R. Belgya
- -------------------------------------------------------
Vincent C. Byrd
- -------------------------------------------------------
Kathryn W. Dindo
- -------------------------------------------------------
Fred A. Duncan
- -------------------------------------------------------
Elizabeth Valk Long
- -------------------------------------------------------
Russell G. Mawby
- -------------------------------------------------------
Charles S. Mechem, Jr.
- -------------------------------------------------------
Benjamin B. Tregoe, Jr.
/s/ WILLIAM H. STEINBRINK
- -------------------------------------------------------
William H. Steinbrink
- -------------------------------------------------------
William Wrigley, Jr.
<PAGE> 1
Exhibit 99(b)
PROXY -- CLASS A COMMON SHARES (RECORD HOLDERS)
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
<S> <C>
At the Annual Meeting of Shareholders of The J. M. Smucker Company to be held on August 15,
2000, and at any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of
them, are hereby authorized to represent me and vote my shares on the following:
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- ----------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of ----------------------------------------
The J. M. Smucker Company, into The J. M. Smucker ----------------------------------------
Company.
2. Election of Directors to the class whose term of office (If you have written in the above
will expire in 2003. The nominees of the Board of space, please mark the corresponding
Directors are: box on the reverse side of this card.)
Fred A. Duncan
Charles S. Mechem, Jr.
Tim Smucker
3. Ratification of appointment of auditors.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- -----------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 2
CLASS A COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted:
common shares into a single class of
voting common shares through the - for the proposal
merger of JMS-Ohio, Inc., a newly described in item 1,
formed, wholly owned subsidiary of
The J. M. Smucker Company, into - for election as
The J. M. Smucker Company. directors of the
nominees listed on the
reverse, and
- for the proposal
described in item 3.
2. Election of Directors (see reverse) FOR WITHHELD FOR
ALL ALL ALL
For, except vote withheld from the EXCEPT:
following nominee(s):
[ ] [ ] [ ]
- -------------------------------------
3. Proposal to ratify appointment of FOR AGAINST ABSTAIN
auditors.
[ ] [ ] [ ]
Will attend meeting [ ]
Number attending
------------------
Change of Address/Comments [ ]
Dated: , 2000
------------------------------
---------------------------------------------
---------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE NOTE THAT ADMISSION TO THE ANNUAL MEETING WILL BE BY ADMISSION CARD ONLY.
If you plan to attend the meeting, please mark the indicated box on your Proxy.
Also, if you plan to bring a guest, please so state on your card. Due to space limitations, no more than two
admission cards per shareholder account will be provided.
</TABLE>
<PAGE> 3
PROXY -- CLASS B COMMON SHARES (RECORD HOLDERS)
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
<S> <C>
At the Annual Meeting of Shareholders of The J. M. Smucker Company to be held on August 15, 2000, and at
any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of them, are hereby authorized to
represent me and vote my shares on the following:
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- ---------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of ---------------------------------------
The J. M. Smucker Company, into The J. M. Smucker ---------------------------------------
Company. ---------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ----------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 4
CLASS B COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted
common shares into a single class of for the proposal
voting common shares through the described in item 1.
merger of JMS-Ohio, Inc., a newly
formed, wholly owned subsidiary of
The J. M. Smucker Company, into
The J. M. Smucker Company.
Will attend meeting [ ]
Number attending
------------
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
-----------------------------------------
-----------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE NOTE THAT ADMISSION TO THE ANNUAL MEETING WILL BE BY ADMISSION CARD ONLY.
If you plan to attend the meeting, please mark the indicated box on your Proxy.
Also, if you plan to bring a guest, please so state on your card. Due to space limitations, no more than
two admission cards per shareholder account will be provided.
</TABLE>
<PAGE> 5
VOTING INSTRUCTIONS - CLASS A COMMON (SAVINGS PLAN)
<TABLE>
<CAPTION>
PRINTER -- PLEASE PRINT SOLID YELLOW STRIP ACROSS THE TOP OF THIS CARD
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE (THE "TRUSTEE") UNDER THE J. M. SMUCKER
EMPLOYEE SAVINGS PLAN (THE "PLAN")
<S> <C>
I, the undersigned, as a Participant in or a Beneficiary of the Plan, hereby instruct the Trustee to vote
(in person or by proxy), in accordance with my confidential instructions on the reverse and the provisions of the
Plan, all Class A Common Shares of The J. M. Smucker Company (the "Company") allocated to my account under the Plan
("Allocated Shares") as well as a portion of all non-directed shares as determined in accordance with the terms of
the Plan ("Non-directed Shares"), as of the record date for the Annual Meeting of Shareholders of the Company to be
held on August 15, 2000. By completing, signing, and returning this voting instruction card I instruct the Trustee
to vote all Allocated Shares as well as all Non-directed Shares of Common Stock the same way. If I wish to vote the
Non- directed Shares differently from the Allocated Shares or do not wish to vote the Non-directed Shares at all I
will request a separate voting instruction card from Key Trust Company of Ohio, N.A. at P.O. Box 94717, Cleveland,
Ohio 44101, (216) 689-3639.
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- -----------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of -----------------------------------------
The J. M. Smucker Company, into The J. M. Smucker -----------------------------------------
Company. -----------------------------------------
2. Election of Directors to the class whose term of office (If you have written in the above
will expire in 2003. The nominees of the Board of space, please mark the corresponding
Directors are: box on the reverse side of this card.)
Fred A. Duncan
Charles S. Mechem, Jr.
Tim Smucker
3. Ratification of appointment of auditors.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 6
CLASS A COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted:
common shares into a single class of
voting common shares through the - for the proposal
merger of JMS-Ohio, Inc., a newly described in item 1,
formed, wholly owned subsidiary of
The J. M. Smucker Company, into - for election as
The J. M. Smucker Company. directors of the
nominees listed on the
reverse, and
- for the proposal
described in item 3.
2. Election of Directors (see reverse) FOR WITHHELD FOR
ALL ALL ALL
For, except vote withheld from the EXCEPT:
following nominee(s):
[ ] [ ] [ ]
- ------------------------------------
3. Proposal to ratify appointment of FOR AGAINST ABSTAIN
auditors.
[ ] [ ] [ ]
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
------------------------------------------
------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE> 7
VOTING INSTRUCTIONS - CLASS B COMMON (SAVINGS PLAN)
<TABLE>
PRINTER -- PLEASE PRINT SOLID YELLOW STRIP ACROSS THE TOP OF THIS CARD
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE (THE "TRUSTEE") UNDER THE J. M. SMUCKER
EMPLOYEE SAVINGS PLAN (THE "PLAN")
<S> <C>
I, the undersigned, as a Participant in or a Beneficiary of the Plan, hereby instruct the Trustee to vote
(in person or by proxy), in accordance with my confidential instructions on the reverse and the provisions of the
Plan, all Class B Common Shares of The J. M. Smucker Company (the "Company") allocated to my account under the Plan
("Allocated Shares") as well as a portion of all non-directed shares as determined in accordance with the terms of
the Plan ("Non-directed Shares"), as of the record date for the Annual Meeting of Shareholders of the Company to be
held on August 15, 2000. By completing, signing, and returning this voting instruction card I instruct the Trustee
to vote all Allocated Shares as well as all Non-directed Shares of Common Stock the same way. If I wish to vote the
Non- directed Shares differently from the Allocated Shares or do not wish to vote the Non-directed Shares at all I
will request a separate voting instruction card from Key Trust Company of Ohio, N.A. at P.O. Box 94717, Cleveland,
Ohio 44101, (216) 689-3639.
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- -----------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of -----------------------------------------
The J. M. Smucker Company, into The J. M. Smucker -----------------------------------------
Company. -----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ----------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 8
CLASS B COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted
common shares into a single class of for the proposal
voting common shares through the described in item 1.
merger of JMS-Ohio, Inc., a newly
formed, wholly owned subsidiary of
The J. M. Smucker Company, into
The J. M. Smucker Company.
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
-------------------------------------------------
-------------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE> 9
VOTING INSTRUCTIONS - CLASS A COMMON (ESOP)
<TABLE>
<CAPTION>
PRINTER --PLEASE PRINT SOLID GREEN STRIP ACROSS THE TOP OF THIS CARD
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE (THE "TRUSTEE") UNDER THE J. M. SMUCKER
EMPLOYEE STOCK OWNERSHIP PLAN (THE "PLAN")
<S> <C>
I, the undersigned, as a Participant in or a Beneficiary of the Plan, hereby instruct the Trustee to vote
(in person or by proxy), in accordance with my confidential instructions on the reverse and the provisions of the
Plan, all Class A Common Shares of The J. M. Smucker Company (the "Company") allocated to my account under the Plan
("Allocated Shares"), a portion of those unallocated shares held in the ESOP Suspense Account ("Unallocated
Shares"), as well as a portion of all non-directed shares ("Non-directed Shares") as determined in accordance with
the terms of the Plan, as of the record date for the Annual Meeting of Shareholders of the Company to be held on
August 15, 2000. By completing, signing, and returning this voting instruction card I instruct the Trustee to vote
all Allocated Shares as well as all Non-directed and Unallocated Shares of common stock the same way. If I wish to
vote the Non-directed and Unallocated Shares differently from the Allocated Shares or do not wish to vote the
Non-directed and Unallocated Shares at all I will request a separate voting instruction card from Key Trust Company
of Ohio, N.A. at P.O. Box 94717, Cleveland, Ohio 44101, (216) 689-3639.
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- ----------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of ----------------------------------------
The J. M. Smucker Company, into The J. M. Smucker ----------------------------------------
Company. ----------------------------------------
2. Election of Directors to the class whose term of office (If you have written in the above
will expire in 2003. The nominees of the Board of space, please mark the corresponding
Directors are: box on the reverse side of this card.)
Fred A. Duncan
Charles S. Mechem, Jr.
Tim Smucker
3. Ratification of appointment of auditors.
Only one box should be checked for voting your Allocated Shares, Unallocated Shares and Non- directed Shares. The
Trustee will vote any shares allocated to your account for which timely instructions are not received for you by
12:00 noon August __, 2000, in accordance with the Plan.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ----------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 10
CLASS A COMMON
<TABLE>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted:
common shares into a single class of
voting common shares through the - for the proposal
merger of JMS-Ohio, Inc., a newly described in item 1,
formed, wholly owned subsidiary of
The J. M. Smucker Company, into - for election as
The J. M. Smucker Company. directors of the
nominees listed on the
reverse, and
- for the proposal
described in item 3.
2. Election of Directors (see reverse) FOR WITHHELD FOR
ALL ALL ALL
For, except vote withheld from the EXCEPT:
following nominee(s):
[ ] [ ] [ ]
3. Proposal to ratify appointment of FOR AGAINST ABSTAIN
auditors.
[ ] [ ] [ ]
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE> 11
VOTING INSTRUCTIONS - CLASS B COMMON (ESOP)
<TABLE>
<CAPTION>
PRINTER --PLEASE PRINT SOLID GREEN STRIP ACROSS THE TOP OF THIS CARD
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE (THE "TRUSTEE") UNDER THE J. M. SMUCKER
EMPLOYEE STOCK OWNERSHIP PLAN (THE "PLAN")
I, the undersigned, as a Participant in or a Beneficiary of the Plan, hereby instruct the Trustee to vote
(in person or by proxy), in accordance with my confidential instructions on the reverse and the provisions of the
Plan, all Class B Common Shares of The J. M. Smucker Company (the "Company") allocated to my account under the Plan
("Allocated Shares"), a portion of those unallocated shares held in the ESOP Suspense Account ("Unallocated
Shares"), as well as a portion of all non-directed shares ("Non-directed Shares") as determined in accordance with
the terms of the Plan, as of the record date for the Annual Meeting of Shareholders of the Company to be held on
August 15, 2000. By completing, signing, and returning this voting instruction card I instruct the Trustee to vote
all Allocated Shares as well as all Non-directed and Unallocated Shares of common stock the same way. If I wish to
vote the Non-directed and Unallocated Shares differently from the Allocated Shares or do not wish to vote the
Non-directed and Unallocated Shares at all I will request a separate voting instruction card from Key Trust Company
of Ohio, N.A. at P.O. Box 94717, Cleveland, Ohio 44101, (216) 689-3639.
<S> <C>
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- ------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of ------------------------------------
The J. M. Smucker Company, into The J. M. Smucker ------------------------------------
Company. ------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
Only one box should be checked for voting your Allocated Shares, Unallocated Shares and Non- directed Shares. The
Trustee will vote any shares allocated to your account for which timely instructions are not received for you by
12:00 noon August __, 2000, in accordance with the Plan.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 12
CLASS B COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted
common shares into a single class of for the proposal
voting common shares through the described in item 1.
merger of JMS-Ohio, Inc., a newly
formed, wholly owned subsidiary of
The J. M. Smucker Company, into
The J. M. Smucker Company.
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
----------------------------------------------
----------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all
should sign.
- -----------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE> 13
PROXY -- CLASS A COMMON SHARES (BROKER)
<TABLE>
<CAPTION>
PRINTER -- PLEASE PRINT SOLID BLUE STRIP ACROSS THE TOP OF THIS CARD
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
At the Annual Meeting of Shareholders of the J. M. Smucker Company to be held on August 15, 2000, and at
any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of them, are hereby authorized to
represent me and vote my shares on the following:
<S> <C>
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- --------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of --------------------------------------
The J. M. Smucker Company, into The J. M. Smucker --------------------------------------
Company. --------------------------------------
2. Election of Directors to the class whose term of office (If you have written in the above
will expire in 2003. The nominees of the Board of space, please mark the corresponding
Directors are: box on the reverse side of this card.)
Fred A. Duncan
Charles S. Mechem, Jr.
Tim Smucker
3. Ratification of appointment of auditors.
PLEASE COMPLETE, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 14
CLASS A COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN Unless otherwise
combination of Smucker's Class A specified below, this
common shares and Class B [ ] [ ] [ ] proxy will be voted:
common shares into a single class of
voting common shares through the - for election as
merger of JMS-Ohio, Inc., a newly directors of the
formed, wholly owned subsidiary of nominees listed on the
The J. M. Smucker Company, into reverse, and
The J. M. Smucker Company.
- for the proposal
described in item 3.
2. Election of Directors (see reverse) FOR WITHHELD FOR
ALL ALL ALL
For, except vote withheld from the
following nominee(s): EXCEPT:
[ ] [ ] [ ]
- ----------------------------------------
3. Proposal to ratify appointment of FOR AGAINST ABSTAIN
auditors.
[ ] [ ] [ ]
By signing below, the undersigned:
- - instructs that this proxy be voted as marked; and
- - certifies that of the total number of Class A common shares represented by this proxy, ________ have been owned
since before July 3, 1996, and _______ were acquired on or after July 3, 1996.
If no certification is made, it will be deemed that all Class A common shares covered by this proxy were acquired
on or after July 3, 1996.
Will attend meeting [ ]
Number attending
------------
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
----------------------------------------------
----------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all should
sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE NOTE THAT ADMISSION TO THE ANNUAL MEETING WILL BE BY ADMISSION CARD ONLY.
If you plan to attend the meeting, please write to the Corporate Secretary at Strawberry Lane, Orrville, Ohio 44667-0280
to request an admission card. If your shares are not held in your name, please furnish proof of shareholder status, such as a
bank or brokerage firm account statement. Also, if you plan to bring a guest, please so state in your request for an admission
card. Due to space limitations, no more than two admission cards per shareholder account will be provided.
</TABLE>
<PAGE> 15
PROXY -- CLASS B COMMON SHARES (BROKER)
<TABLE>
<CAPTION>
PRINTER -- PLEASE PRINT SOLID BLUE STRIP ACROSS THE TOP OF THIS CARD
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
<S> <C>
At the Annual Meeting of Shareholders of the J. M. Smucker Company to be held on August 15, 2000, and at
any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of them, are hereby authorized to
represent me and vote my shares on the following:
1. Approval of the combination of Smucker's Class A (change of address and comments)
common shares and Class B common shares into a single
class of voting common shares through the merger of JMS- ---------------------------------------------
Ohio, Inc., a newly formed, wholly owned subsidiary of ---------------------------------------------
The J. M. Smucker Company, into The J. M. Smucker ---------------------------------------------
Company. ---------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
SEE REVERSE
SIDE
- ----------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
<PAGE> 16
CLASS B COMMON
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [X] [ ]
<S> <C>
1. Proposal to approve the FOR AGAINST ABSTAIN
combination of Smucker's Class A
common shares and Class B [ ] [ ] [ ]
common shares into a single class of
voting common shares through the
merger of JMS-Ohio, Inc., a newly
formed, wholly owned subsidiary of
The J. M. Smucker Company, into
The J. M. Smucker Company.
By signing below, the undersigned instructs that this proxy be voted as marked.
Will attend meeting [ ]
Number attending
---------------
Change of Address/Comments [ ]
Dated: , 2000
---------------------------
-----------------------------------------------------
-----------------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all should
sign.
- ------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE NOTE THAT ADMISSION TO THE ANNUAL MEETING WILL BE BY ADMISSION CARD ONLY.
If you plan to attend the meeting, please write to the Corporate Secretary at Strawberry Lane, Orrville, Ohio 44667-0280
to request an admission card. If your shares are not held in your name, please furnish proof of shareholder status, such as a
bank or brokerage firm account statement. Also, if you plan to bring a guest, please so state in your request for an admission
card. Due to space limitations, no more than two admission cards per shareholder account will be provided.
</TABLE>
<PAGE> 17
PROXY -- CLASS A COMMON SHARES (BANKS, BROKERS, AND NOMINEES)
<TABLE>
<CAPTION>
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED BELOW AND
FOR THE PROPOSALS DESCRIBED IN ITEMS 3 AND 4.
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
<S> <C>
At the Annual Meeting of Shareholders of The J. M. Smucker Company to be held on August 15, 2000, and at
any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of them, are hereby authorized to
represent me and vote my shares on the following:
1. Proposal to approve the combination of Smucker's Class A common shares and Class B
common shares into a single class of voting common shares through the merger of JMS-
Ohio, Inc., a newly formed, wholly owned subsidiary of The J. M. Smucker Company,
into The J. M. Smucker Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Election of Directors to the class whose term of office will expire in 2003. The
nominees of the Board of Directors are:
Fred A. Duncan, Charles S. Mechem, Jr., and Tim Smucker
(INSTRUCTION: In the table on the reverse side indicate the number of shares
withheld as to each nominee in the column marked "Against")
3. Proposal to ratify appointment of auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Any other matter that may properly come before this meeting.
The Board of Directors recommends a vote FOR the proposals described in Items 1 and 3.
</TABLE>
<PAGE> 18
(Continued from the reverse side)
<TABLE>
<CAPTION>
CLASS A SHARES OWNED BY THE BENEFICIAL OWNERS SINCE BEFORE JULY 3, 1996
-------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
Post number of shares, NOT number of votes
<S> <C> <C> <C>
1. Proposal to approve
the merger of JMS-Ohio,
Inc. into The J. M.
Smucker Company shares shares shares
------------------ ------------------ ------------------
2. Directors:
Fred A. Duncan shares shares shares
------------------ ------------------ ------------------
Charles S. Mechem, Jr. shares shares shares
------------------ ------------------ ------------------
Tim Smucker shares shares shares
------------------ ------------------ ------------------
3. Proposal to ratify
appointment of auditors shares shares shares
------------------ ------------------ ------------------
CLASS A SHARES ACQUIRED BY THE BENEFICIAL OWNERS ON OR AFTER JULY 3, 1996
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
Post number of shares, NOT number of votes
1. Proposal to approve the
merger of JMS-Ohio, Inc.
into The J. M. Smucker
Company shares shares shares
------------------ ------------------ ------------------
2. Directors:
Fred A. Duncan shares shares shares
------------------ ------------------ ------------------
Charles S. Mechem, Jr. shares shares shares
------------------ ------------------ ------------------
Tim Smucker shares shares shares
------------------ ------------------ ------------------
3. Proposal to ratify
appointment of auditors shares shares shares
------------------ ------------------ ------------------
POST ONLY RECORD POSITION; DO NOT TABULATE VOTES.
Signed this _____ date of __________ 2000
-------------------------------------------
-------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all should
sign.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
</TABLE>
<PAGE> 19
PROXY -- CLASS B COMMON SHARES (BANKS, BROKERS, AND NOMINEES)
<TABLE>
<CAPTION>
THE J. M. SMUCKER COMPANY
THIS PROXY FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
<S> <C>
At the Annual Meeting of Shareholders of The J. M. Smucker Company to be held on August 15,
2000, and at any adjournment, Tim Smucker, Richard Smucker, and Steven J. Ellcessor, and each of
them, are hereby authorized to represent me and vote my shares on the following:
1. Proposal to approve the combination of Smucker's Class A common shares and Class B
common shares into a single class of voting common shares through the merger of JMS-
Ohio, Inc., a newly formed, wholly owned subsidiary of The J. M. Smucker Company,
into The J. M. Smucker Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR the proposal described in Item 1.
</TABLE>
<PAGE> 20
(Continued from the reverse side)
<TABLE>
<CAPTION>
CLASS B SHARES OWNED BY THE BENEFICIAL OWNERS SINCE BEFORE JULY 3, 2000
-----------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Post number of shares
1. Proposal to approve
the merger of JMS-Ohio, Inc.
into The J.M. Smucker Company shares shares shares
------- ------- -------
Signed this _____ date of __________ 2000
----------------------------------------------
----------------------------------------------
Signature(s)
NOTE: Please sign your name as it appears in print
and in case of multiple or joint ownership, all should
sign.
PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE
NO POSTAGE NECESSARY
</TABLE>
<PAGE> 21
[SMUCKER'S LOGO]
Dear Shareholder:
The enclosed proxy card for Class A Common Shares of The J. M. Smucker
Company ("Smucker") is a little different from most proxy cards. It not only
permits you to give instructions as to how to vote your Class A Common Shares,
but also provides for certification as to how long you have been the beneficial
owner of your shares. That certification will determine how many votes you will
be entitled to cast at the Annual Meeting to be held on August 15, 2000.
The number of votes to which you will be entitled depends on whether or
not there has been any change since July 3, 1996 (the date which is four years
prior to the record date for the Annual Meeting), in the "beneficial ownership"
of your Class A Common Shares, as that phrase is defined in Smucker's Amended
Articles of Incorporation. Generally speaking, this means that if you own Class
A Common Shares that were purchased prior to July 3, 1996, you will be entitled
to ten votes for each of those shares. You will have only one vote per share,
though, for Class A Common Shares purchased on or after July 3, 1996.
Even though you have shares acquired on or after July 3, 1996, you may
be entitled to ten votes per share under certain circumstances. Those
circumstances and other aspects of the voting rights of the holders of Class A
Common Shares are governed by the Amended Articles of Incorporation, pertinent
portions of which are set forth on the reverse side of this letter. If you have
questions, please contact either our Corporate Secretary's office or our
Transfer Agent, Harris Trust and Savings Bank. Their addresses and telephone
numbers are listed in our Annual Report.
IT IS IMPORTANT THAT YOU COMPLETE THE CERTIFICATION AND INSTRUCTION ON
THE ACCOMPANYING PROXY CARD. IF YOU DO NOT FILL IN THE BLANKS, IT WILL BE
ASSUMED THAT ALL THE CLASS A COMMON SHARES REPRESENTED BY YOUR PROXY WERE
ACQUIRED ON OR AFTER JULY 3, 1996, AND YOU WILL BE ENTITLED TO ONLY ONE VOTE PER
SHARE FOR ALL THOSE SHARES.
/s/ Tim Smucker /s/ Richard Smucker
TIM SMUCKER RICHARD SMUCKER
Chairman President
<PAGE> 22
EXPRESS TERMS OF CLASS A SHARES
(a) Each outstanding Class A Share shall entitle the holder thereof to
ten votes on each matter properly submitted to the shareholders for their vote,
consent, waiver, release or other action, other than any matter submitted to the
shareholders for purposes solely of Article Fifth hereof; except that no holder
shall be entitled to exercise more than one vote on any such matter in respect
of any Class A Share with respect to which there has been a change in beneficial
ownership during the four years immediately preceding the date on which a
determination is made of the shareholders who are entitled to take any such
action; and except that no holder shall be entitled to exercise more than one
vote on any such matter in respect of any Class A Share if the aggregate voting
power such holder otherwise would be entitled to exercise as of the date of such
a determination (disregarding the voting power of any Class A Shares held by
such holder on August 20, 1985 or acquired by such holder in a transaction not
involving any change in beneficial ownership by reason of paragraph (c) of this
Division II) would constitute one-fifth or more of the voting power of the
Company and the holders of the Class A Shares have not authorized the ownership
of Class A Shares by such person as and to the extent contemplated by Article
Seventh hereof.
(b) A change in beneficial ownership of an outstanding Class A Share
shall be deemed to have occurred whenever a change occurs in any person or group
of persons who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares (1) voting power, which
includes the power to vote, or to direct the voting of such Class A Share, (2)
investment power, which includes the power to direct the sale or other
disposition of such Class A Share, (3) the right to receive or retain the
proceeds of any sale or other disposition of such Class A Share or (4) the right
to receive any distributions, including cash dividends, in respect of such Class
A Share.
(A) In the absence of proof to the contrary provided in accordance
with the procedures referred to in paragraph (d) of this Division
II, a change in beneficial ownership shall be deemed to have
occurred whenever a Class A Share is transferred of record into the
name of any other person.
(B) In the case of a Class A Share held of record in the name of a
trust company, broker, nominee or clearing agency, if it has not
been established pursuant to such procedures that there has been no
change in the person or persons who direct the exercise of the
rights referred to in clauses (b)(l) through (b)(4) of this
Division II with respect to such Class A Share during the period of
four years immediately preceding the date on which a determination
is made of the shareholders who are entitled to take any action (or
since August 20, 1985 for any period ending on or before August 19,
1989), then a change in beneficial ownership shall be deemed to
have occurred during such period.
(C) In the case of a Class A Share held of record in the name of
any person as a trustee, agent, guardian or custodian under the
Uniform Gifts to Minors Act as in effect in any state, a change in
beneficial ownership shall be deemed to have occurred whenever
there is a change in the beneficiary of such trust, the principal
of such agent, the ward of such guardian or the minor for whom such
custodian is acting or in such trustee, agent, guardian or
custodian.
(D) In the case of Class A Shares beneficially owned by a person or
group of persons who, after acquiring directly or indirectly the
beneficial ownership of five percent of the outstanding Class A
Shares, failed to notify the Company of such ownership, a change in
beneficial ownership of such Class A Shares shall be deemed to
occur on each day while such failure continues.
<PAGE> 23
(c) Notwithstanding anything in this Division II to the contrary, no
change in beneficial ownership shall be deemed to have occurred solely as a
result of:
(1) any event that occurred prior to August 20, 1985 or pursuant to
the terms of any contract (other than a contract for the purchase
and sale of Class A Shares contemplating prompt settlement),
including contracts providing for options, rights of first refusal
and similar arrangements in existence on such date to which any
holder of Class A Shares is a party;
(2) any transfer of any interest in a Class A Share pursuant to a
bequest or inheritance, by operation of law upon the death of any
individual, or by any other transfer without valuable
consideration, including a gift that is made in good faith and not
for the purpose of circumventing this Article Fourth;
(3) any change in the beneficiary of any trust, or any distribution
of a Class A Share from trust, by reason of the birth, death,
marriage or divorce of any natural person, the adoption of any
natural person prior to age 18 or the passage of a given period of
time or the attainment by any natural person of a specific age, or
the creation or termination of any guardianship or custodial
arrangement;
(4) any appointment of a successor trustee, agent, guardian or
custodian with respect to a Class A Share if neither such successor
has nor its predecessor had the power to vote or to dispose of such
Class A Share without further instructions from others;
(5) any change in the person to whom dividends or other
distributions in respect of a Class A Share are to be paid pursuant
to the issuance or modification of a revocable dividend payment
order; or
(6) any issuance of a Class A Share by the Company or any transfer
by the Company of a Class A Share held in treasury unless otherwise
determined by the Board of Directors at the time of authorizing
such issuance or transfer.
(d) For purposes of this Division II, all determinations concerning
changes in beneficial ownership, or the absence of any such change, shall be
made by the Company or, at any time when a transfer agent is acting with respect
to the Class A Shares, by such transfer agent on the Company's behalf. Written
procedures designed to facilitate such determinations shall be established by
the Company and refined from time to time. Such procedures shall provide, among
other things, the manner of proof of facts that will be accepted and the
frequency with which such proof may be required to be renewed. The Company and
any transfer agent shall be entitled to rely on all information concerning
beneficial ownership of the Class A Shares coming to their attention from any
source and in any manner reasonably deemed by them to be reliable, but neither
the Company nor any transfer agent shall be charged with any other knowledge
concerning the beneficial ownership of the Class A Shares.
(e) In the event of any stock split or stock dividend with respect to
the Class A Shares, each Class A Share acquired by reason of such split or
dividend shall be deemed to have been beneficially owned by the same person
continuously from the same date as that on which beneficial ownership of the
Class A Share, with respect to which such Class A Share was distributed, was
acquired.
(f) Each Class A Share, whether at any particular time the holder
thereof is entitled to exercise ten votes or one, shall be identical to all
other Class A Shares in all respects, and together the Class A Shares shall
constitute a single class of shares of the Company.
<PAGE> 24
[SMUCKER'S LOGO]
VOTING PROCEDURES -- BENEFICIAL OWNERS
CLASS A AND CLASS B COMMON SHARES OF THE J. M. SMUCKER COMPANY
To All Banks, Brokers, and Nominees:
In accordance with the Amended Articles of Incorporation of The J. M.
Smucker Company ("Smucker"), shareholders who were holders of Class A Common
Shares of record on July 3, 2000, and who acquired Smucker Class A Common Shares
prior to July 3, 1996, will be able to cast ten votes per share on those shares
at the Annual Meeting to be held on August 15, 2000. Those holders of record who
acquired their Class A Common Shares on or after July 3, 1996, are, with certain
exceptions, entitled to cast one vote per share on the Class A Common Shares so
acquired.
To enable Smucker to tabulate the voting by beneficial owners of Class
A Common Shares held in your name, a special proxy card has been devised in
accordance with suggestions made by representatives of brokerage houses and
banks. On this card, the beneficial owner will certify the numbers of ten-vote
shares and one-vote shares, respectively, he or she is entitled to vote, and
will by the same signature give instructions as to the voting of those shares.
ALL UNCERTIFIED SHARES, WHETHER INSTRUCTED OR NOT, ARE TO BE LISTED AS ONE-VOTE
SHARES. THIS IS NOT TO BE REGARDED AS A NON-ROUTINE VOTE MERELY BECAUSE OF THE
NATURE OF THE VOTING RIGHTS OF THE COMMON SHARES. The beneficial owner proxy
card certification is as follows:
By signing below, the undersigned:
- instructs that this proxy be voted as marked; and
- certifies that of the total number of Class A Shares
represented by this proxy, _______ have been owned
since before July 3, 1996, and _______ were acquired
on or after July 3, 1996.
If no certification is made, it will be deemed that all Class
A Common Shares represented by this proxy were acquired on or
after July 3, 1996.
Please note, you do NOT have to TABULATE, only RECORD the numbers shown
on the certification. Please note also that you do NOT certify if you are a
broker; the beneficial owner certifies.
If you are a bank, you may wish to follow your usual procedures and
furnish the beneficial owner's proxy card to the beneficial owner for return
directly to Smucker's transfer agent. The beneficial owner will then complete
the certification before returning the card.
TYPICALLY, OUR CLASS B COMMON SHARES ARE NON-VOTING AND WE INSTRUCT YOU
NOT TO DELIVER PROXY CARDS TO HOLDERS OF CLASS B COMMON SHARES. AT THIS YEAR'S
ANNUAL MEETING, HOWEVER, THE CLASS B COMMON SHARES WILL BE ENTITLED TO VOTE ON
ONE MATTER. THEREFORE, WE HAVE DEVISED SEPARATE VOTING CARDS FOR THE CLASS A AND
CLASS B COMMON SHARES AND LABELED THE CARDS ACCORDINGLY. PLEASE DISTRIBUTE THE
APPROPRIATE CARDS TO THE HOLDERS OF CLASS A AND CLASS B COMMON SHARES. HOLDERS
OF BOTH CLASS A AND CLASS B COMMON SHARES SHOULD RECEIVE BOTH CARDS. PLEASE NOTE
THAT NONE OF THE CLASS B COMMON SHARES ARE ENTITLED TO TEN VOTES, AND THEREFORE
NO CERTIFICATION IS INCLUDED ON THE CLASS B PROXY CARD.
