UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by
the Registrant [X]
Filed
by
a party other than the Registrant [ ]
Check
the
appropriate box:
[
] Preliminary Proxy Statement
[
] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X]
Definitive Proxy Statement
[
] Definitive Additional Materials
[
] Soliciting Material Pursuant to ss. 240.14a-12
SENECA
FOODS CORPORATION
----------------------------------------------------------------
(Name
of
Registrant as Specified in Its Charter)
---------------------------------------------------------------------------------
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No
fee required.
[
] Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1)
Title
of each class of securities to which transaction applies:
---------------------------------------------------------------------------------
(2)
Aggregate number of securities to which transactions applies:
---------------------------------------------------------------------------------
(3)
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated
and state how it was determined):
---------------------------------------------------------------------------------
(4)
Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------------
(5)
Total
fee paid:
---------------------------------------------------------------------------------
[
] Fee
paid previously with preliminary materials.
[
] Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously.
Identify the previous filing by registration statement number,
or
the
Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
---------------------------------------------------------------------------------
(2)
Form,
Schedule or Registration Statement No.:
---------------------------------------------------------------------------------
(3)
Filing Party:
---------------------------------------------------------------------------------
(4)
Date
Filed:
---------------------------------------------------------------------------------
SENECA
FOODS CORPORATION
3736
South Main Street
Marion,
New York 14505
June
29, 2007
Dear
Shareholder:
You
are
cordially invited to the 2007 Annual Meeting of Shareholders of Seneca Foods
Corporation (the “Company”), to be held on August 10, 2007 at 1:00 p.m., Eastern
Daylight Time, at the Company’s offices, 3736 South Main Street, Marion, New
York 14505.
Information
about the Annual Meeting is included in the Notice of Annual Meeting of
Shareholders and Proxy Statement which follow.
It
is
important that your shares of Common Stock be represented at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, I urge you to give your
immediate attention to voting. Please review the enclosed materials, sign and
date the enclosed proxy card and return it promptly in the enclosed postage-paid
envelope.
Very
truly yours,
KRAIG
H.
KAYSER
President
and Chief Executive Officer
SENECA
FOODS CORPORATION
3736
South Main Street
Marion,
New York 14505
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON AUGUST 10, 2007
To
the
Shareholders:
The
2007
Annual Meeting of Shareholders of Seneca Foods Corporation (the “Company”) will
be held at the Company’s offices, 3736 South Main Street, Marion, New York
14505, on Friday, August 10, 2007 at 1:00 p.m., Eastern Daylight Time, for
the
following purposes:
| 1. |
To
elect three directors to serve until the Annual Meeting of shareholders
in
2010 and until each of their successors is duly elected and shall
qualify;
|
| 2. |
To
ratify the adoption of the Seneca Foods Corporation 2007 Equity Incentive
Plan;
|
| 3. |
To
ratify the appointment of BDO Seidman, LLP as the Company’s independent
registered public accounting firm for the fiscal year ending March
31,
2008; and
|
| 4. |
To
transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
|
Only
shareholders of record at the close of business on June 15, 2007 are entitled
to
notice of and to vote at the Annual Meeting and any adjournment
thereof.
The
prompt return of your proxy will avoid delay and save the expense involved
in
further communication. The proxy may be revoked by you at any time prior to
its
exercise, and the giving of your proxy will not affect your right to vote in
person if you wish to attend the Annual Meeting.
By
Order
of the Board of Directors
JEFFREY
L. VAN RIPER
Secretary
DATED:
June 29, 2007
IT
IS
IMPORTANT THAT THE ENCLOSED PROXY BALLOT BE SIGNED, DATED AND PROMPTLY
RETURNED
IN THE ENCLOSED ENVELOPE, SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER
OR NOT
YOU PLAN TO ATTEND THE MEETING.
TABLE
OF
CONTENTS
|
1
|
|
|
Why
did I receive this proxy?
|
1
|
|
Who
is entitled to vote?
|
1
|
|
How
many votes do I have?
|
1
|
|
What
does it mean if I receive more than one proxy card?
|
1
|
|
How
do I vote?
|
2
|
|
How
do I vote my shares that are held by my broker?
|
2
|
|
What
am I voting on?
|
2
|
|
Will
there be any other items of business on the agenda?
|
2
|
|
How
many votes are required to act on the proposals?
|
2
|
|
How
are votes counted?
|
2
|
|
What
happens if I return my proxy card without voting on all
proposals?
|
3
|
|
Who
has paid for this proxy solicitation?
|
3
|
|
When
was this proxy statement mailed?
|
3
|
|
How
can I obtain a copy of this year’s Annual Report on Form
10-K?
|
3
|
|
Can
I find additional information on the Company’s website?
|
3
|
|
4
|
|
|
Information
Concerning Directors
|
4
|
|
Independent
Directors
|
5
|
|
6
|
|
|
Audit
Committee
|
6
|
|
Compensation
Committee
|
6
|
|
Corporate
Governance and Nominating Committee
|
7
|
|
Board
Attendance at Meetings
|
7
|
|
Stockholder
Communication With the Board
|
7
|
|
Report
of the Audit Committee
|
8
|
|
9
|
|
|
10
|
|
|
Compensation
Discussion and Analysis
|
10
|
|
Report
of the Compensation Committee
|
14
|
|
Summary
Compensation Table
|
15
|
|
Grants
of Plan-Based Awards in Fiscal 2007
|
16
|
|
Pension
Benefits
|
16
|
|
Compensation
of Directors
|
17
|
|
Compensation
Committee Interlocks
|
18
|
|
Certain
Transactions and Relationships
|
18
|
|
18
|
|
|
Security
Ownership of Certain Beneficial Owners
|
18
|
|
Security
Ownership of Management and Directors
|
23
|
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
25
|
|
25
|
|
|
Summary
of the 2007 Equity Incentive Plan
|
25
|
|
Proposed
Awards
|
27
|
|
Vote
Required for Approval
|
27
|
|
28
|
|
|
Principal
Accountant Fees and Services
|
28
|
|
Changes
in Certifying Accountant
|
29
|
|
30
|
|
|
30
|
|
|
Proposals
for the Company’s Proxy Material
|
30
|
|
Proposals
to be Introduced at the Annual Meeting but not Intended to
be Included in
the Company’s Proxy Material
|
31
|
| APPENDIX A |
|
PROXY
STATEMENT
ABOUT
THE 2007 ANNUAL MEETING
Why
did I receive this proxy?
The
Board
of Directors of Seneca Foods Corporation (the “Company”) is soliciting proxies
to be voted at the Annual Meeting of Shareholders. The Annual Meeting will
be
held Friday, August 10, 2007, at 1:00 p.m., Eastern Daylight Time, at the
Company’s offices, 3736 South Main Street, Marion, New York 14505. This proxy
statement summarizes the information you need to know to vote by proxy
or in
person at the Annual Meeting. You do not need to attend the Annual Meeting
in
person in order to vote.
Who
is entitled to vote?
All
record holders of the Company’s voting stock as of the close of business on June
15, 2007 (the “Record Date”) are entitled to vote at the Annual Meeting. As of
the Record Date, the following shares of voting stock were issued and
outstanding: (i) 4,813,684 shares of Class A common stock, $0.25 par value
per
share (“Class A Common Stock”); (ii) 2,760,905 shares of Class B common stock,
$0.25 par value per share (“Class B Common Stock”, and together with the Class A
Common Stock, sometimes collectively referred to as the “Common Stock”); (iii)
200,000 shares of Six Percent (6%) Cumulative Voting Preferred Stock, $0.25
par
value per share (“6% Preferred Stock”); (iv) 407,240 shares of 10% Cumulative
Convertible Voting Preferred Stock - Series A, $0.25 stated value per share
(“10% Series A Preferred Stock”); and (v) 400,000 shares of 10% Cumulative
Convertible Voting Preferred Stock - Series B, $0.25 stated value per share
(“10% Series B Preferred Stock”).
How
many votes do I have?
Each
share of Class B Common Stock, 10% Series A Preferred Stock, and 10% Series
B
Preferred Stock is entitled to one vote on each item submitted to you for
consideration. Each share of Class A Common Stock is entitled to one-twentieth
(1/20) of one vote on each item submitted to you for consideration. Each
share
of 6% Preferred Stock is entitled to one vote, but only with respect to
the
election of directors.
What
does it mean if I receive more than one proxy card?
It
means
that you have multiple accounts at the transfer agent or with stockbrokers.
Please complete and return all proxy cards to ensure that all your shares
are
voted.
1
How
do I vote?
· In
Person: At
the
Annual Meeting.
How
do I vote my shares that are held by my broker?
If
you
have shares held by a broker, you may instruct your broker to vote your
shares
by following the instructions that the broker provides to you.
What
am I voting on?
You
will
be voting on Proposal One regarding the election of three directors of
the
Company, Proposal Two regarding the ratification of the adoption of the
Seneca
Foods Corporation 2007 Equity Incentive Plan, and Proposal Three regarding
the
ratification of BDO Seidman, LLP as the Company’s independent registered public
accounting firm for the fiscal year ending March 31, 2008.
Will
there be any other items of business on the agenda?
Pursuant
to SEC rules, shareholder proposals must have been received by May 17,
2007 to
be considered at the Annual Meeting. To date, we have received no shareholder
proposals and we do not expect any other items of business. Nonetheless,
in case
there is an unforeseen need, your proxy gives discretionary authority to
Arthur
S. Wolcott and Kraig H. Kayser with respect to any other matters that might
be
brought before the Annual Meeting. Those persons intend to vote that proxy
in
accordance with their best judgment.
How
many votes are required to act on the proposals?
Pursuant
to our Bylaws, provided a quorum is present, directors will be elected
by a
plurality of all the votes cast at the Annual Meeting with each share of
voting
stock being voted for as many individuals as there are directors to be
elected
and for whose election the share is entitled to vote.
Both
the
ratification of the adoption of the Seneca Foods Corporation 2007 Equity
Incentive Plan and the ratification of the appointment of BDO Seidman,
LLP as
the Company’s independent registered public accounting firm for the fiscal year
ending March 31, 2008 require the affirmative vote of a majority of the
votes
cast on the proposal, provided that a quorum is present at the Annual
Meeting.
How
are votes counted?
The
Annual Meeting will be held if a quorum is represented in person or by
proxy.
The holders of voting shares entitled to exercise a majority of the voting
power
of the Company shall constitute a quorum at the Annual Meeting. If you
return a
signed proxy card, your shares will be counted for the purpose of determining
whether there is a quorum. We will treat failures to vote, referred to
as
abstentions, as shares present and entitled to vote for quorum purposes.
2
However,
abstentions will not be counted as votes cast on a proposal and will have
no
effect on the result of the vote on such proposal. A withheld vote is the
same
as an abstention.
Broker
non-votes occur when proxies submitted by a broker, bank or other nominee
holding shares in “street name” do not indicate a vote for a proposal because
they do not have discretionary voting authority and have not received
instructions as to how to vote on the proposal. We will treat broker non-votes
as shares that are present and entitled to vote for quorum purposes. However,
broker non-votes will not be counted as votes cast on a proposal and will
have
no effect on the result of the vote on the proposal.
What
happens if I return my proxy card without voting on all
proposals?
When
the
proxy is properly executed and returned, the shares it represents will
be voted
at the Annual Meeting in accordance with your directions. If the signed
card is
returned with no direction on a proposal, the proxy will be voted in favor
of
(FOR) Proposals One, Two and Three.
Who
has paid for this proxy solicitation?
The
Company has paid the entire expense of this proxy statement and any additional
materials furnished to shareholders.
When
was this proxy statement mailed?
This
proxy statement and the enclosed proxy card were mailed to shareholders
beginning on or about June 29, 2007.
How
can I obtain a copy of this year’s Annual Report on Form
10-K?
A
copy of
our 2007 Annual Report to Shareholders, including financial statements
for the
fiscal year ended March 31, 2007, accompanies this Proxy Statement. The
Annual
Report, however, is not part of the proxy solicitation material. A
copy of our Annual Report on Form 10-K filed with the Securities and Exchange
Commission (“SEC”) may be obtained free of charge by writing to Seneca Foods
Corporation, 3736 South Main Street, Marion, New York 14505, Attention:
Secretary or by accessing the “Investor Information” section of the Company’s
website at www.senecafoods.com.
Can
I find additional information on the Company’s website?
Yes.
Our
website is located at www.senecafoods.com. Although the information contained
on
our website is not part of this proxy statement, you can view additional
information on the website, such as our code of conduct, corporate governance
guidelines, charters of board committees and reports that we file with
the SEC.
A copy of our code of ethics and each of the charters of our board committees
may be obtained free of charge by writing to Seneca Foods Corporation,
3736
South Main Street, Marion, New York 14505, Attention: Secretary.
3
PROPOSAL
ONE: ELECTION OF DIRECTORS
In
accordance with our Bylaws, the Board of Directors has fixed the number
of
directors at nine and the Board of Directors is divided into three classes,
as
equal in number as possible, having staggered terms of three years each.
Therefore, at this annual meeting three directors will be elected to serve
until
the annual meeting in 2010 and until each of their successors is duly elected
and shall qualify.
The
Board
of Directors unanimously recommends a vote FOR the election of each of
the
nominees listed below. All nominees, except Susan A. Henry, are currently
serving as directors of the Company and were elected at the 2004 Annual
Meeting
of Shareholders. Douglas F. Brush, who has served as a director since 2001,
has
indicated that he will not be standing for re-election to the Company’s Board of
Directors. Susan A. Henry has been recommended by the Corporate Governance
and
Nominating Committee of the Board of Directors to fill the vacancy. Dr.
Henry is
the Ronald P. Lynch Dean of Agriculture and Life Sciences at Cornell University
school of Agriculture & Life Sciences in Ithaca, New York.
Unless
instructed otherwise, proxies will be voted FOR the election of the three
nominees listed below. Although the directors do not contemplate that any
of the
nominees will be unable to serve prior to the Meeting, if such a situation
arises, the enclosed proxy will be voted in accordance with the best judgment
of
the person or persons voting the proxy.
Information
Concerning Directors
The
following provides certain information regarding the nominees for election
to
the Company’s Board of Directors and the Directors whose terms continue beyond
the Annual Meeting. Each individual’s name, position with the Company and tenure
is indicated. In addition, the principal occupation and business experience
for
the past five years is provided for each nominee and unless otherwise stated,
each nominee has held the position indicated for at least the past five
years.
Nominees
Standing for Election at the Annual Meeting
Andrew
M. Boas,
age 52
− Mr. Boas is the General Partner of Carl Marks Management Company, L.P.
(merchant banking firm), President of Carl Marks Offshore Management, Inc.,
Vice
President of CM Capital and Vice President of Carl Marks & Co., Inc. He has
served as a director of the Company since 1998.
Susan
W. Stuart,
age 52
− Ms. Stuart is a marketing consultant. She has served as a director of the
Company since 1986.
Susan
A. Henry,
age 61
− Dr. Henry is Dean of Cornell University’s College of Agriculture and Life
Sciences since July 2000. She is a new director candidate and therefore
has not
served as a director previously. Dr. Henry serves on the Board of Directors
of
Agrium, Inc.
4
Directors
whose Terms Expire in 2008
Robert
T. Brady,
age 66
− Mr. Brady is Chairman and Chief Executive Officer of Moog, Inc. (manufacturer
of control systems). He has served as a director of the Company since 1989.
Mr.
Brady also serves on the Board of Directors of Moog Inc., National Fuel
Gas
Company, Astronics Corporation and M&T Bank Corporation.
G.
Brymer Humphreys,
age 66 −
Mr. Humphreys is State Executive Director, USDA Farm Services Agency, New
York
State Office. He has served as a director of the Company since
1983.
Arthur
S. Wolcott,
age 81
− Mr. Wolcott has served as a director and as the Chairman of the Board of
the
Company since 1949.
Directors
whose Terms Expire in 2009
Arthur
H. Baer,
age 60
− Mr. Baer is President of Hudson Valley Publishing since January 2003 and
from
1998 to 1999. He was President of Arrow Electronics Europe from 2000 to
2002 and
President of XYAN Inc. from 1996 to 1998. Mr. Baer has served as a director
of
the Company since 1998.
Kraig
H. Kayser,
age 46 −
Mr. Kayser is the President and Chief Executive Officer of the Company
and has
served in that capacity since 1993. He has served as a director of the
Company
since 1985. Mr. Kayser also serves on the Board of Directors of Moog
Inc.
Thomas
Paulson,
age 51
− Since March 2006, Mr. Paulson has been the Chief Financial Officer of Tennant
Corporation (industrial cleaning company). He was Chief Financial Officer
of
Innovex, Inc. (flexible circuits) from February 2001 to March 2006 and
Vice
President of Finance of The Pillsbury Company from 1998-2000. He has served
as a
director of the Company since 2004.
Messrs.
Boas and Baer were first nominated to the Company’s Board of Directors pursuant
to the terms of a Stock Purchase Agreement dated as of June 22, 1998, by
and
between the Company and Carl Marks Strategic Investments, L.P. and related
entities (collectively the “Investors”). Certain substantial shareholders of the
Company have agreed to vote their shares in favor of Messrs. Boas and Baer.
This
voting arrangement will continue in effect until the Investors, in the
aggregate, own less than 10% of the outstanding Class A Common Stock (assuming
conversion of the Company’s Convertible Participating Preferred
Stock).
Arthur
S.
Wolcott, Chairman, is the father of Susan W. Stuart, a director of the
Company.
There are no other family relationships between any of the directors or
executive officers of the Company.
Independent
Directors
Under
the
NASDAQ Global Market listing standards, at least a majority of the Company’s
directors and all of the members of the Company’s Audit Committee, Compensation
Committee and Corporate Governance and Nominating Committee must meet the
test
of
5
“independence”
as defined by NASDAQ. The NASDAQ standards provide that, to qualify as
an
“independent” director, in addition to satisfying certain bright-line criteria,
the Board of Directors must affirmatively determine that a director has
no
relationship which would interfere with the exercise of independent judgment
in
carrying out the responsibilities of a director. The Board of Directors
has
determined that each current director and nominee for director, other than
Mr.
Wolcott, the Company’s Chairman, his daughter, Ms. Stuart, and Mr. Kayser, the
Company’s President and Chief Executive Officer, is “independent” as defined by
the listing standards of the NASDAQ Global Market. In making its determinations,
the Board considered Mr. Humphreys’ relationship with the Company described in
“Certain Transactions and Related Relationships” below and concluded that this
relationship was not inconsistent with a determination that Mr. Humphreys
is
independent. No other director has any material relationship with the Company.
BOARD
COMMITTEES AND MEETINGS
The
Board
of Directors has a standing Audit Committee, Compensation Committee and
Corporate Governance and Nominating Committee. Each member of each of these
committees is “independent” as that term is defined in the NASDAQ Global Market
listing standards. The Board has adopted a written charter for each of
these
committees, which is available on our website at www.senecafoods.com.
Audit
Committee
The
Audit
Committee consists of Messrs. Baer, Brady, Brush, Humphreys and Paulson.
The
Audit Committee met four times during the fiscal year ended March 31, 2007.
The
Audit Committee is directly responsible for the engagement of independent
auditors, reviews with the auditors the scope and results of the audit,
reviews
with management the scope and results of the Company’s internal auditing
procedures, reviews the independence of the auditors and any non-audit
services
provided by the auditors, reviews with the auditors and management the
adequacy
of the Company’s system of internal accounting controls and makes inquiries into
other matters within the scope of its duties. Mr. Baer has been designated
as
the Company’s “audit committee financial expert” in accordance with the SEC
rules and regulations. Shareholders should understand that this designation
is a
disclosure requirement of the SEC related to Mr. Baer’s experience and
understanding with respect to certain accounting and auditing matters.
The
designation does not impose any duties, obligations or liability that are
greater than are generally imposed on him as a member of the Audit Committee
and
the Board, and his designation as an audit committee financial expert pursuant
to this SEC requirement does not affect the duties, obligations or liability
of
any other member of the Audit Committee or the Board. See “Report of the Audit
Committee” below.
Compensation
Committee
The
Compensation Committee consists of Messrs. Brush, Humphreys and Boas. The
Compensation Committee’s function is to review and recommend to the Board of
Directors appropriate executive compensation policy and compensation of
the
Company’s directors and officers. The Compensation Committee also reviews and
makes recommendations with respect
6
to
executive and employee benefit plans and programs. The Compensation Committee
met two times during the fiscal year ended March 31, 2007.
Corporate
Governance and Nominating Committee
The
Corporate Governance and Nominating Committee consists of Messrs. Boas,
Brady,
Humphreys and Paulson. The responsibilities of the Corporate Governance
and
Nominating Committee include assessing Board membership needs and identifying,
screening, recruiting, and presenting director candidates to the Board,
implementing policies regarding corporate governance matters, making
recommendations regarding committee memberships and sponsoring and overseeing
performance evaluations for the Board as a whole and the directors.
The
Board
has not adopted specific minimum criteria for director nominees. The Corporate
Governance and Nominating Committee identifies nominees by first evaluating
the
current members of the Board of Directors willing to continue in service.
Current members of the Board with skills and experience that are relevant
to the
Company’s business and who are willing to continue in services are considered
for re-nomination. If any member of the Board does not wish to continue
in
service, or if the Corporate Governance and Nominating Committee decides
not to
nominate a member for re-election, the Committee first considers the
appropriateness of the size of the board. If the Committee determines the
board
seat should remain and a vacancy exists, the Committee considers factors
that it
deems are in the best interests of the Company and its shareholders in
identifying and evaluating a new nominee. The Corporate Governance and
Nominating Committee will consider nominees suggested by incumbent Board
members, management and shareholders.
Shareholder
recommendations must be in writing and addressed to the Chairman of the
Corporate Governance and Nominating Committee, c/o Corporate Secretary,
3736
South Main Street, Marion, New York 14505, and should include a statement
setting forth the qualifications and experience of the proposed candidates
and
basis for nomination. Any person recommended by shareholders of the Company
will
be evaluated in the same manner as any other potential nominee for director.
Board
Attendance at Meetings
The
Board
of Directors held four meetings during the fiscal year ended March 31,
2007.
Each director attended at least 75% of the aggregate of the total number
of
meetings of the Board of Directors and meetings held by all committees
of the
Board of Directors on which he or she served. Each director is expected
to
attend the Annual Meeting of shareholders. In 2006, the Annual Meeting
of
Shareholders was attended by all nine directors.
Shareholder
Communication With the Board
The
Company provides an informal process for shareholders to send communications
to
the Board of Directors. Shareholders who wish to contact the Board of Directors
or any of its members may do so in writing to Seneca Foods Corporation,
3736
South Main Street, Marion, New York 14505. Correspondence directed to an
individual board member will be referred, unopened, to that member.
Correspondence not directed to a particular board member will be referred,
unopened, to the Chairman of the Audit Committee.
7
Report
of the Audit Committee
The
following Report of the Audit Committee does not constitute soliciting
material
and should not be deemed filed or incorporated by reference into any other
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 except to the extent the Company specifically incorporates
this Report by reference therein.
The
Audit
Committee of the Company is composed of five directors, each of whom meets
the
current independence and experience requirements of the NASDAQ Global Market
and
the SEC. The Audit Committee operates under a written charter which was
adopted
on May 27, 2004. A complete copy of the Audit Committee charter is available
on
the Company’s website at www.senecafoods.com. The Board has determined that
Arthur H. Baer is an “audit committee financial expert” as defined in the
current rules of the SEC.
Management
is primarily responsible for the Company’s financial statements and reporting
process. The Company’s independent registered public accounting firm, BDO
Seidman, LLP, is responsible for performing an independent audit of the
Company’s financial statements in accordance with U.S. generally accepted
accounting principles (“GAAP”) and for issuing a report on those statements. The
Audit Committee’s responsibilities include oversight of the Company’s
independent registered public accounting firm and internal audit department,
as
well as oversight of the Company’s financial reporting process on behalf of the
full Board of Directors. It is not the duty or the responsibility of the
Audit
Committee to conduct auditing or accounting reviews or related procedures.
The
Audit
Committee meets at least quarterly and at such other times as it deems
necessary
or appropriate to carry out its responsibilities. Those meetings include,
whenever appropriate, executive sessions with BDO Seidman without management
being present. The Committee met four times during the fiscal year ended
March
31, 2007. In the course of fulfilling its oversight responsibilities, the
Audit
Committee met with management, internal audit personnel and BDO Seidman
to
review and discuss all annual financial statements and quarterly operating
results prior to their issuance. Management advised the Audit Committee
that all
financial statements were prepared in accordance with GAAP. The Audit Committee
also discussed with BDO Seidman matters required to be discussed, pursuant
to
Statement on Auditing Standards No. 61, Communication
with Audit Committees,
including the reasonableness of judgments and the clarity and completeness
of
financial disclosures. In addition, the Audit Committee discussed with
BDO
Seidman matters relating to its independence and has received from BDO
Seidman
the written disclosures and letter required by the Independence Standards
Board
Standard No. 1, Independence
Discussions with Audit Committees.
On
the
basis of the reviews and discussions the Audit Committee has had with BDO
Seidman and management, the Audit Committee recommended to the Board of
Directors that the
8
Board
approve the inclusion of the Company’s audited financial statements in the
Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2007,
for filing with the SEC.
Submitted
by:
THE
AUDIT
COMMITTEE
Arthur
H.
Baer, Chair
Douglas
F. Brush
Robert
T.
Brady
G.
Brymer
Humphreys
Thomas
Paulson
The
following provides certain information regarding our executive officers.
Each
individual’s name and position with the Company is indicated. In addition, the
principal occupation and business experience for the past five years is
provided
for each officer and, unless otherwise stated, each person has held the
position
indicated for at least the past five years.
Arthur
S. Wolcott,
age 81
− Mr. Wolcott has served as the Chairman of the Board of the Company since
1949.
Kraig
H. Kayser,
age 46
− Mr. Kayser is the President and Chief Executive Officer of the Company
and has
served in that capacity since 1993. From 1991-1993 he served as the Company’s
Chief Financial Officer.
Roland
E. Breunig,
age 55
− Mr. Breunig has served as the Company’s Chief Financial Officer since
September 2006. From February 2004 to September 2006, Mr. Breunig was a
consultant operating as an independent contractor with Robert Half Management
Consultants. During 2003 and part of 2004, Mr. Breunig was principal of
Heartland Consulting. From 1999 to 2003, Mr. Breunig was Chief Financial
Officer, Secretary and Treasurer at HeartLand Airlines, LLC.
Paul
L. Palmby,
age 45
− Mr. Palmby has been Chief Operating Officer of the Company since 2006.
Prior
to that, he served as President of the Vegetable Division of the Company
from
2005 to 2006 and Vice President of Operations of the Company from 1999-2004.
Mr.
Palmby joined the Company in March 1999.
Carl
A. Cichetti,
age 49
− Mr. Cichetti has served as Chief Information Officer of the Company since
2006. He was a Senior Consultant of Navint (Technology Consulting) from
2004-2005 and Senior Vice President of Technology of Citigroup from
2001-2004.
Dean
E. Erstad,
age 44
− Mr. Erstad has been Senior Vice President of Sales of the Company since
2001
and Vice President of Private Label Sales during 2000.
9
John
D. Exner,
age 45
− Mr. Exner has been General Counsel of the Company since 2006. He was Legal
Counsel/President of Midwest Food Processors Association, Inc. from
1991-2005.
Cynthia
L. Fohrd,
age 44
− Ms. Fohrd has been Chief Administrative Officer of the Company since 2007.
Ms.
Fohrd has held various positions since joining the Company in 1988 including
Internal Auditor, Risk Management Specialist and Vice President of Human
Resources.
Jeffrey
L. Van Riper,
age 50
− Mr. Van Riper has been Secretary and Controller of the Company since 1986.
He
joined the Company as Accounting Manager in 1978.
COMPENSATION
OF EXECUTIVE OFFICERS AND
DIRECTORS
Compensation
Discussion and Analysis
Overview
This
section discusses our policies and practices relating to executive compensation
and presents a review and analysis of the compensation earned during the
fiscal
year ended March 31, 2007 by our Chief Executive Officer, or CEO, the two
individuals who served as our Chief Financial Officer during the year and
our
three other most-highly compensated executive officers, to whom we refer
collectively in this proxy statement as the “named executive officers.” The
amounts of compensation earned by these executives are detailed in the
Fiscal
Year 2007 Summary Compensation Table and the other tables which follow
it. The
purpose of this section is to provide you with more information about the
types
of compensation earned by the named executive officers and the philosophy
and
objectives of our executive compensation programs and practices.
Authority
of the Compensation Committee; Role of Executive Officers
The
Compensation Committee of the Board of Directors (the “Committee”) consists of
Messrs. Brush, Humphreys and Boas. Mr. Brush, who has served on the Board
of
Directors for approximately six years, is the Committee Chairman. Each
member of
the Committee qualifies as an independent director under NASDAQ Global
Market
listing standards. The Committee operates under a written charter adopted
by the
Board. A copy of the charter is available at www.senecafoods.com under
“Corporate Governance.” The Committee meets as often as necessary to perform its
duties and responsibilities. The Committee held two meetings during fiscal
2007
and has held one meeting so far during fiscal 2008. The Committee has never
engaged a compensation consultant to assist it in developing compensation
programs. The Committee also regularly allocates a portion of each meeting
to an
executive session without management.
The
Committee is authorized by our Board of Directors to oversee our compensation
and employee benefit practices and plans generally, including our executive
compensation, incentive compensation and equity-based plans. The Committee
may
delegate appropriate responsibilities associated with our benefit and
compensation plans to members of management. The Committee has delegated
certain
responsibilities with regard to our Pension Plan and 401(k) Plan to
an
10
investment
committee consisting of members of management. The Committee also has delegated
authority to our President and CEO to designate those employees who will
participate in our Profit Sharing Bonus Plan; provided, however, that the
Committee is required to approve participation in such plan by any of our
executive officers.
The
Committee approves the compensation of our CEO. Our CEO develops and submits
to
the Committee his recommendation for the compensation of each of the other
executive officers in connection with annual merit reviews of their performance.
The Committee reviews and discusses the recommendations made by our CEO
and
approves the compensation for each named executive officer for the coming
year.
No corporate officer, including our CEO, is present when the Committee
determines that officer’s compensation. In addition, our Chief Financial Officer
and other members of our finance staff assist the Committee with establishing
performance target levels for our Profit Sharing Bonus Plan, as well as
with the
calculation of actual financial performance and comparison to the performance
targets, each of which actions requires the Committee’s approval.
Philosophy
and Objectives
Our
philosophy for the compensation of all of our employees, including the
named
executive officers, is to value the contribution of our employees and share
profits through broad-based incentive arrangements designed to reward
performance and motivate collective achievement of strategic objectives
that
will contribute to our company’s success. The primary objectives of the
compensation programs for our named executive officers are to:
|
·
|
attract
and retain highly-qualified executives,
|
|
·
|
motivate
our executives to achieve our business objectives,
|
|
·
|
reward
our executives appropriately for their individual and collective
contributions, and
|
|
·
|
align
our executives’ interests with the long-term interests of our
shareholders.
|
Our
compensation principles are designed to complement and support the Company’s
business strategy. The canned fruit and vegetable business is highly
competitive, and the principal customers are major food chains and food
distributors with strong negotiating power as to price and other terms.
Consequently, our success depends on an efficient cost structure (as well
as
quality products) which enables us to provide favorable prices to the customers
and acceptable margins for the Company.
However,
an important purpose of our compensation policies is to enable the Company
to
retain highly valued employees. Our senior management monitors middle and
senior
management attrition and endeavors to be sufficiently competitive as to
salary
levels so as to retain and acquire highly valued managers. Consequently,
the
Company has been flexible, and expects to remain so, in attracting and
retaining
quality management personnel.
11
Elements
of Executive Compensation for Fiscal Year 2007
Base
Salary.
The
base salary of each of our named executive officers is reviewed by the
Committee
at the beginning of each fiscal year as part of the overall annual review
of
executive compensation. During the review of base salaries, the Committee
considers the executive’s qualifications and experience, scope of
responsibilities and future potential, the goals and objective established
for
the individual, his or her past performance and competitive salary practices
both internally and externally. In addition to the annual reviews, the
base
salary of a particular executive may be adjusted during the course of a
fiscal
year, for example, in connection with a promotion or other material change
in
the executive’s role or responsibilities. During fiscal year 2007, each of the
named executive officers received a merit increase to his base salary in
May
2006.
As
a
general rule, base salaries for the named executive officers are set at
a level
which will allow us to attract and retain highly-qualified executives.
Many of
our competitors are family-owned businesses operating in rural areas, where
compensation rates and salary expectations are below the urban levels.
However,
most of our executive officers also live and work in rural locations, inasmuch
as the Company believes that its facilities (some of which include executive
offices) should be located in the agricultural areas that produce the crops
processed by the Company. Although the compensation level of our executive
officers is generally in the upper end of executive compensation in these
localities, they are below the compensation levels for comparable positions
in
most public food companies with sales comparable to those of the
Company.
For
Mr.
Kayser, our CEO, the Committee concluded that a base salary of $428,570
was
appropriate in this regard effective May 1, 2006. The Committee similarly
determined the appropriate base salary of each of our named executive officers
as set forth in the Summary Compensation Table.
Profit
Sharing Bonus Plan.
The
corporate Profit Sharing Bonus Plan is generally available to officers
and
certain key corporate employees. An annual incentive bonus is payable based
upon
the Company’s performance, and aligns the interests of executives and employees
with those of our shareholders. The Profit Sharing Bonus Plan links performance
incentives for management and key employees to increases in shareholder
value
and promotes a culture of high performance and ownership in which members
of
management are rewarded for achieving operating efficiencies, reducing
costs and
improving profitability.
The
Profit Sharing Bonus Plan became effective April 1, 2006. Under the Plan,
annual
incentive bonuses are paid based on achieving the performance criteria
set for
the Company. The bonuses for officers and certain key corporate employees
are
distributed at the sole discretion of our CEO upon approval of such bonuses
by
the Committee.
The
performance criteria established under the Profit Sharing Bonus Plan requires
the Company’s pre-tax profits for a fiscal year to equal or exceed a specific
bonus target plus the aggregate bonus amounts calculated under the Plan.
Each
bonus target under the Profit Sharing Bonus Plan is expressed as a percentage
of
the consolidated net worth of the Company as stated in the annual report
for the
prior fiscal year. Additionally, each bonus target corresponds to a
12
potential
bonus payment calculated as a percentage of the employee’s base salary earned
during the fiscal year. The following table sets forth the bonus targets
and
potential bonus payments established under the Profit Sharing Bonus Plan
for
fiscal 2007.
|
Bonus
Target
|
Potential
Bonus Payment
(Percent
of Base Salary)
|
|
7.5%
|
10%
|
|
10%
|
15%
|
|
12.5%
|
20%
|
|
15%
|
25%
|
|
20%
|
50%
|
For
fiscal 2007, the Company’s pre-tax profits exceeded 15% of the Company’s
consolidated net worth at the end of the prior fiscal year and a total
of
$321,428 was earned by eligible employees under the Profit Sharing Bonus
Plan.
With respect to the named executive officers, the bonuses set forth in
the
Summary Compensation Table under the heading “Non-Equity Incentive Plan
Compensation” were paid as part of fiscal 2007 compensation.
Equity
Based Incentive Awards.
The
Company is asking shareholders to approve an Equity Incentive Plan to align
the
interests of management and shareholders through the use of stock-based
incentives that result in increased stock ownership by management. See
the
section entitled Proposal 2: Approval of the Company’s 2007 Equity Incentive
Plan for further information. Shareholder approval of the new Plan is important
to allow us to continue to attract and retain key talent and to motivate
executive and other key employees to achieve the Company’s goals.
Retirement
Programs.
Our
executive officers are entitled to participate in the Company’s Pension Plan,
which is for the benefit of all employees meeting certain eligibility
requirements. Effective August 1, 1989, the Company amended the Plan to
provide
improved pension benefits under an excess formula. The excess formula for
the
calculation of the annual retirement benefit is: total years of credited
service
(not to exceed 35) multiplied by the sum of (i) 0.6% of the participant’s
average salary (five highest consecutive years, excluding bonus), and (ii)
0.6%
of the participant’s average salary in excess of compensation covered by Social
Security.
Participants
who were employed by the Company prior to August 1, 1988, are eligible
to
receive the greater of their benefit determined under the excess formula
or
their benefit determined under the offset formula as of July 31, 1989.
The
offset formula is: (i) total years of credited service multiplied by $120,
plus
(ii) average salary multiplied by 25%, less 74% of the primary Social Security
benefit. The maximum permitted annual retirement income under either formula
is
$160,000. See “Pension Benefits” below for further information regarding the
number of years of service credited to each of the named executive officers
and
the actuarial present value of his accumulated benefit under the Pension
Plan.
We
also
have a 401(k) Plan pursuant to which the Company makes matching and
discretionary contributions for eligible employees. The Company matching
contributions to the
13
named
executive officers’ 401(k) Plan accounts are included in the Summary
Compensation Table under the heading “Other Compensation.”
Other
Compensation.
The
Company also provides health insurance, term life insurance, and short-term
disability benefits that do not discriminate in scope, terms or operation
in
favor of our executive officers and are therefore not included in the Summary
Compensation Table for the named executive officers.
Other
Compensation Policies
Internal
Pay Equity.
The
Committee believes that internal equity is an important factor to be considered
in establishing compensation for our officers. The Committee has not established
a policy regarding the ratio of total compensation of our CEO to that of
the
other officers, but it does review compensation levels to ensure that
appropriate equity exists. The Committee intends to continue to review
internal
compensation equity and may adopt a formal policy in the future if it deems
such
a policy to be appropriate.
Compensation
Deductibility Policy.
Under
Section 162(m) of the Internal Revenue Code of 1986, as amended, the Company
may
not receive a federal income tax deduction for compensation paid to the
CEO or
any of the four other most highly compensated executive officers to the
extent
that any of the persons receive more than $1,000,000 in compensation in
any one
year. However, if the Company pays compensation that is “performance-based”
under Section 162(m), the Company can receive a federal income tax deduction
for
the compensation paid even if such compensation exceeds $1,000,000 in a
single
year. None of our executive officers received more than $1,000,000 in
compensation during fiscal 2007 or any prior year, so Section 162(m) has
not
affected the Company. To maintain flexibility in compensating executive
officers
in a manner designed to promote varying corporate goals, the Committee
has not
adopted a policy that all compensation must be deductible on the Company’s
federal income tax returns.
No
Stock Options.
The
Company has never awarded stock options to any officer or employee, and
it does
not presently contemplate initiating any plan or practice to award stock
options.
Timing
of Grants.
The
Committee anticipates that stock awards to the Company’s officers under the 2007
Equity Incentive Plan will typically be granted annually in conjunction
with the
review of the individual performance of each officer. This review will
take
place at a regularly scheduled meeting of the Compensation Committee.
Report
of the Compensation Committee
The
following Report of the Compensation Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into
any
other filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 except to the extent the Company specifically incorporates
this Report by reference therein.
The
Compensation Committee of the Company has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K
with
14
management
and, based on such review and discussions, the Compensation Committee
recommended to the Board that the Compensation Discussion and Analysis
be
included in this Proxy Statement and in the Company’s Annual Report for the
Fiscal Year Ended March 31, 2007 (as incorporated by reference to this
Proxy
Statement).
THE
COMPENSATION COMMITTEE
Douglas
F. Brush, Chair
G.
Brymer
Humphreys
Andrew
M.
Boas
Summary
Compensation Table
The
following table summarizes, for the fiscal year ended March 31, 2007, the
amount
of compensation earned by the named executive officers.
|
Name
and Principal Position
|
Year
|
Salary
|
Non-Equity
Incentive Plan Compensation
|
All
Other Compensation (1)
|
Total
|
|||||||||||
|
Arthur
S. Wolcott
Chairman
of the Board
|
2007
|
$
|
427,530
|
$
|
107,142
|
$
|
-
|
$
|
534,672
|
|||||||
|
Kraig
H. Kayser
President
and Chief Executive Officer
|
2007
|
$
|
427,522
|
$
|
107,142
|
$
|
13,345
|
$
|
548,009
|
|||||||
|
Roland
E. Breunig
Chief
Financial Officer
|
2007
|
$
|
90,865
|
$
|
21,875
|
$
|
15,262
|
$
|
128,002
|
|||||||
|
Paul
L. Palmby
Chief
Operating Officer
|
2007
|
$
|
198,784
|
$
|
50,000
|
$
|
4,758
|
$
|
253,542
|
|||||||
|
Carl
A. Cichetti
Chief
Information Officer
|
2007
|
$
|
140,569
|
$
|
35,269
|
$
|
3,710
|
$
|
179,548
|
|||||||
|
Philip
G. Paras (2)
Former
Chief Financial Officer
|
2007
|
$
|
55,621
|
$
|
-
|
$
|
-
|
$
|
55,621
|
|||||||
_______________
|
(1)
|
The
amount shown in this column represents the Company’s matching contribution
to its 401(k) Plan for each named executive officer, relocation
costs
including gross-up for Mr. Kayser and Mr. Breunig and the amount
of
premium paid by the Company for group term life insurance on
the named
executive officer’s life. The value of perquisites and other personal
benefits are not shown in the table because the aggregate amount
of such
compensation, if any, is less than $10,000 for each named executive
officer.
|
|
(2)
|
Mr.
Paras served as Chief Financial Officer of the Company from April
2001 to
August 2006.
|
15
Grants
of Plan-Based Awards in Fiscal 2007
|
Name
|
Grant
Date
|
Estimated
Possible Payouts Under Non-Equity Incentive Plan
Awards
|
||
|
Threshold
|
Target
|
Maximum
|
||
|
Arthur
S. Wolcott
Chairman
of the Board
|
April
1, 2006
|
$42,857
|
$85,714
|
$214,284
|
|
Kraig
H. Kayser
President
and Chief Executive Officer
|
April
1, 2006
|
$42,857
|
$85,714
|
$214,284
|
|
Roland
E. Breunig
Chief
Financial Officer
|
September
28, 2006
|
$8,750
|
$17,500
|
$43,750
|
|
Paul
L. Palmby
Chief
Operating Officer
|
April
1, 2006
|
$20,000
|
$40,000
|
$100,000
|
|
Carl
A. Cichetti
Chief
Information Officer
|
April
1, 2006
|
$14,108
|
$28,215
|
$70,538
|
|
Philip
G. Paras (2)
Former
Chief Financial Officer
|
April
1, 2006
|
$12,647
|
$25,294
|
$63,235
|
_______________
|
(1)
|
Represents
the possible payouts under the Company’s Profit Sharing Bonus Plan
discussed in further detail on pages 12-13. For fiscal 2007,
the Company’s
pre-tax profits exceeded 15% of the Company’s consolidated net worth at
the end of the prior fiscal year. The actual amount earned by
each named
executive officer in fiscal 2007 is reported under the Non-Equity
Incentive Plan Compensation column in the Summary Compensation
Table.
|
|
(2)
|
Mr.
Paras served as Chief Financial Officer of the Company from April
2001 to
August 2006.
|
Pension
Benefits
The
Company’s Pension Plan is a funded, tax-qualified, noncontributory
defined-benefit pension plan that covers certain employees, including the
named
executive officers. Effective
August 1, 1989, the Company amended the Pension Plan to provide improved
pension
benefits under an excess formula. The excess formula for the calculation
of the
annual retirement benefit is: total years of credited service (not to exceed
35)
multiplied by the sum of (i) 0.6% of the participant’s average salary (five
highest consecutive years, excluding bonus), and (ii) 0.6% of the participant’s
average salary in excess of his compensation covered by Social Security.
The
amount of annual earnings that may be considered in calculating benefits
under
the Pension Plan is limited by law. For 2007, the annual limitation is
$225,000.
Participants
who were employed by the Company prior to August 1, 1988, are eligible
to
receive the greater of their benefit determined under the excess formula
or
their benefit determined under the offset formula as of July 31, 1989.
The
offset formula is: (i) total years of credited service multiplied by $120,
plus
(ii) average salary multiplied by 25%, less 74% of the
16
primary
Social Security benefit. The maximum permitted annual retirement income
under
either formula is $160,000.
The
following table shows the present value of accumulated benefits payable
to each
of our named executive officers under our Pension Plan.
|
Name
|
Plan
Name
|
Number
of Years Credited Service
(#)
|
Present
Value of Accumulated Benefit (1)
($)
|
Payments
During Last Fiscal Year
($)
|
|||||||||
|
Arthur
S. Wolcott
|
Pension
Plan
|
58
|
$
|
781,683
|
$
|
98,370
|
|||||||
|
Kraig
H. Kayser
|
Pension
Plan
|
15
|
115,680
|
--
|
|||||||||
|
Roland
E. Breunig
|
Pension
Plan
|
--
|
--
|
--
|
|||||||||
|
Paul
L. Palmby
|
Pension
Plan
|
20
|
94,457
|
--
|
|||||||||
|
Carl
A. Cichetti
|
Pension
Plan
|
1
|
5,005
|
--
|
|||||||||
|
Philip
G. Paras
|
Pension
Plan
|
9
|
28,465
|
--
|
|||||||||
_______________
|
(1)
|
Please
see Note 8, “Retirement Plans,” in the Notes to Consolidated Financial
Statements included in our Annual Report to Shareholders for
the year
ended March 31, 2007 for the assumptions used in calculating
the present
value of the accumulated benefit. Pension Plan service credit
and
actuarial values are calculated as of March 31, 2007, which is
the pension
plan measurement date that we use for financial statement reporting
purposes.
|
Compensation
of Directors
Under
the
director compensation program, which became effective July 1, 2006, each
non-employee director is paid a monthly cash retainer of $1,750. Messrs.
Wolcott
and Kayser, as officers of the Company, do not receive any compensation
for
serving the Company as members of the Board of Directors. The Company’s
non-employee directors received the following aggregate amounts of compensation
for the fiscal year ended March 31, 2007:
|
Name
|
Fees
Earned or Paid in Cash
|
|||
|
Arthur
H. Baer
|
$
|
20,250
|
||
|
Andrew
M. Boas
|
$
|
20,250
|
||
|
Robert
T. Brady
|
$
|
20,250
|
||
|
Douglas
F. Brush
|
$
|
20,250
|
||
|
G.
Brymer Humphreys
|
$
|
20,250
|
||
|
Susan
W. Stuart
|
$
|
20,250
|
||
|
Thomas
Paulson
|
$
|
20,250
|
||
17
Compensation
Committee Interlocks
As
noted
above, the Compensation Committee is comprised of three independent Directors:
Messrs. Brush, Humphreys and Boas. No member of the Compensation Committee
is or
was formerly an officer or an employee of the Company. No executive officer
of
the Company serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving
as a
member of the Company’s Board of Directors, nor has such interlocking
relationship existed in the past.
Certain
Transactions and Relationships
The
Audit
Committee must review and approve all related party transactions that are
required to be disclosed pursuant to Item 404 of Regulation S-K.
Prior
to
December 30, 2006, the Company operated under a contract pursuant to which
Birds
Eye Foods supplied the Company’s New York processing plants with their raw
vegetable requirements. Birds Eye’s sources of supply are the grower-members of
Pro-Fac Cooperative, Inc., a non-controlling shareholder of Birds Eye.
A small
percentage (less than 1% in fiscal year 2007) of vegetables supplied to
the
Company under this contract are grown by Humphreys Farm Inc. as a Pro-Fac
grower-member. G. Brymer Humphreys is President and a 23% shareholder of
Humphreys Farm.
Each
year
the prices paid for all Pro-Fac-sourced vegetables are negotiated between
the
Company and Birds Eye and paid directly to Birds Eye. The Company understands
that the member-growers who supplied the vegetables are paid through Pro-Fac.
The Company has no negotiations with Humphreys Farm and no authority to
require
Birds Eye or Pro-Fac to fill from Humphreys Farm any particular volume
or
percentage of the vegetables supplied to the Company. Moreover, the Company
does
not negotiate or identify any special prices for vegetables produced at
Humphreys Farm as distinguished from other Pro-Fac grower-members.
OWNERSHIP
OF COMPANY
STOCK
Security
Ownership of Certain Beneficial Owners
To
the
best of the Company’s knowledge, no person or group (as those terms are used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) beneficially owned, as of March 31, 2007, more than five
percent of the shares of any class of the Company’s voting securities, except as
set forth in the following table. Beneficial ownership for these purposes
is
determined in accordance with applicable SEC rules and includes shares
over
which a person has sole or shared voting power or investment power. The
holdings
of Common Stock listed in the table do not include the shares obtainable
upon
conversion of the 10% Series A Preferred Stock and the 10% Series B Preferred
Stock, which currently are convertible into both Class A Common Stock and
Class
B Common Stock on the basis of 20 and 30 shares of Preferred Stock,
respectively, for each share of Common Stock.
18
|
Amount
of Shares and Nature
of
Beneficial Ownership
|
|||||
|
Title
of Class
|
Name
and Address of Beneficial Owner
|
Sole
Voting/ Investment Power
|
Shared
Voting/ Investment Power
|
Total
|
Percent
of Class (1)
|
|
6%
Preferred Stock
|
Arthur
S. Wolcott
1605
Main Street
Sarasota,
Florida
|
32,844
|
--
|
32,844
(2)
|
16.42%
|
|
Kurt
C. Kayser
Bradenton,
Florida
|
27,536
|
--
|
27,536
|
13.77
|
|
|
Susan
W. Stuart
Fairfield,
Connecticut
|
25,296
|
--
|
25,296
|
12.65
|
|
|
Bruce
S. Wolcott
Canandaigua,
New York
|
25,296
|
--
|
25,296
|
12.65
|
|
|
Grace
W. Wadell
Wayne,
Pennsylvania
|
25,292
|
--
|
25,292
|
12.65
|
|
|
Mark
S. Wolcott
Pittsford,
New York
|
25,292
|
--
|
25,292
|
12.65
|
|
|
L.
Jerome Wolcott, Jr.
Costa
Mesa, California
|
15,222
|
--
|
15,222
|
7.61
|
|
|
Peter
J. Wolcott
Bridgewater,
Connecticut
|
15,222
|
--
|
15,222
|
7.61
|
|
|
10%
Series A Preferred Stock
|
Arthur
S. Wolcott
|
212,840
|
--
|
212,840
(3)
|
52.26
|
|
Kraig
H. Kayser
418
East Conde Street
Janesville,
Wisconsin
|
32,168
|
141,644
|
173,812
(4)
|
42.68
|
|
|
Hannelore
Wolcott-Bailey
Penn
Yan, New York
|
20,588
|
--
|
20,588
(5)
|
5.05
|
|
|
10%
Series B Preferred Stock
|
Arthur
S. Wolcott
|
212,200
|
--
|
212,200
(6)
|
53.10
|
|
Kraig
H. Kayser
|
--
|
165,080
|
165,080
(7)
|
41.30
|
|
|
Hannelore
Wolcott-Bailey
|
22,720
|
--
|
22,720
(8)
|
5.60
|
|
19
|
Amount
of Shares and Nature
of
Beneficial Ownership
|
|||||
|
Title
of Class
|
Name
and Address of Beneficial Owner
|
Sole
Voting/ Investment Power
|
Shared
Voting/ Investment Power
|
Total
|
Percent
of Class (1)
|
|
Class
A Common Stock
|
Carl
Marks Management Company, LP
900
Third Avenue, 33rd
Floor
New
York, New York
|
2,355,736
|
--
|
2,355,736
(9)
|
32.86
|
|
Manulife
Financial Corporation
200
Bloor Street, East
Toronto,
Ontario, Canada
|
1,025,220
|
--
|
1,025,220
(10)
|
17.56
|
|
|
Nancy
A. Marks
Great
Neck, New York
|
652,824
|
--
|
652,824
(11)
|
6.95
|
|
|
Franklin
Resources, Inc.
One
Franklin Parkway
San
Mateo, California
|
556,600
|
--
|
556,600
(12)
|
5.93
|
|
|
I.
Wistar Morris, III
4
Tower Bridge, Suite 300
200
Barr Harbor Drive
West
Conshohocken, Pennsylvania
|
184,700
|
348,722
|
533,422
(13)
|
5.68
|
|
|
Arnhold
and S. Bleichroeder Advisers, LLC
1345
Avenue of the Americas
New
York, New York
|
488,060
|
--
|
488,060
(14)
|
5.20
|
|
|
The
Pillsbury Company
General
Mills, Inc.
Number
One General Mills Blvd
Minneapolis,
Minnesota
|
--
|
346,570
|
346,570
(15)
|
3.69
|
|
|
T.
Rowe Price Associates, Inc.
100
E. Pratt Street
Baltimore,
Maryland
|
280,200
|
--
|
280,200
(16)
|
2.98
|
|
|
Kraig
H. Kayser
|
66,528
|
158,130
|
224,658
(17)
|
2.39
|
|
|
Susan
W. Stuart
|
57,214
|
105,288
|
162,502
(18)
|
1.73
|
|
|
Arthur
S. Wolcott
|
20,623
|
106,467
|
127,090
(19)
|
1.35
|
|
20
|
Amount
of Shares and Nature
of
Beneficial Ownership
|
|||||
|
Title
of Class
|
Name
and Address of Beneficial Owner
|
Sole
Voting/ Investment Power
|
Shared
Voting/ Investment Power
|
Total
|
Percent
of Class (1)
|
|
Class
B Common Stock
|
Kraig
H. Kayser
|
82,770
|
440,218
|
522,988
(20)
|
18.94
|
|
Susan
W. Stuart
|
63,492
|
413,966
|
477,458
(21)
|
17.29
|
|
|
Nancy
A. Marks
|
377,304
|
--
|
377,304
(22)
|
13.67
|
|
|
Arthur
S. Wolcott
|
8,551
|
362,808
|
371,359
(23)
|
13.47
|
|
|
Seneca
Foods Pension Plan
|
279,300
|
--
|
279,300
|
10.12
|
|
_________________________
|
(1)
|
The
applicable percentage of beneficial ownership is based on the
number of
shares of each class of voting stock outstanding as of March
31, 2007.
With respect to certain persons, the percentage of beneficial
ownership of
Class A Common Stock includes the shares of Class A Common Stock
that may
be acquired upon conversion of the Company’s Convertible Participating
Preferred Stock but such shares are not treated as outstanding
for the
purpose of computing the percentage ownership of any other
person.
|
|
(2)
|
Does
not include 101,176 shares of 6% Preferred Stock held directly
by Mr. and
Mrs. Wolcott’s offspring, as to which Mr. Wolcott disclaims beneficial
ownership.
|
|
(3)
|
These
shares are convertible into 10,642 shares of Class A Common Stock
and
10,642 shares of Class B Common
Stock.
|
|
(4)
|
Mr.
Kayser has shared voting and investment power with respect to
141,644
shares of 10% Series A Preferred Stock held in two trusts of
which he is a
co-trustee and in which he and members of his family are beneficiaries.
The total 173,812 shares of 10% Series A Preferred Stock are
convertible
into 8,690 shares of Class A Common Stock and 8,690 shares of
Class B
Common Stock.
|
|
(5)
|
These
shares are convertible into 1,029 shares of Class A Common Stock
and 1,029
shares of Class B Common Stock.
|
|
(6)
|
These
shares are convertible into 7,073 shares of Class A Common Stock
and 7,073
shares of Class B Common Stock.
|
|
(7)
|
Mr.
Kayser has shared voting and investment power with respect to
165,080
shares of 10% Series B Preferred Stock held in two trusts of
which he is a
co-trustee and in which he and members of his family are beneficiaries.
The total 165,080 shares of 10% Series B Preferred Stock are
convertible
into 5,502 shares of Class A Common Stock and 5,502 shares of
Class B
Common Stock.
|
|
(8)
|
These
shares are convertible into 757 shares of Class A Common Stock
and 757
shares of Class B Common Stock.
|
|
(9)
|
Based
on an amended statement on Schedule 13D filed with the SEC on
July 8, 2004
by Carl Marks Management Company, L.P. as sole general partner
of Carl
Marks Strategic Investments, L.P. and Carl Marks Strategic Investments
II,
L.P. The shares in the table consist solely of 2,355,736 shares
of the
Company’s Convertible Participating Preferred Stock that are convertible
into shares of Class A Common Stock on a one-for-one
basis.
|
|
(10)
|
Based
on a statement on Schedule 13G filed with the SEC on August 28,
2006 by
Manulife Financial Corporation and its indirect, wholly-owned
subsidiary,
John Hancock Life Insurance Company (JHLICO). The shares in the
table
consist solely of 1,025,220 shares of Convertible Participating
Preferred
Stock, Series 2006 (of which 19,346 shares are held by JHLICO’s direct,
wholly-owned subsidiary, John Hancock Variable Life Insurance
Company)
that are convertible into shares of Class A Common Stock on a
one-for-one
basis.
|
|
(11)
|
Based on an amended statement on Schedule 13D filed with the SEC on July 8, 2004 by Nancy A. Marks and certain related investors. The shares reported in the table include 130,000 shares held in trust of which she is a trustee and 248,520 shares of the Company’s Convertible Participating Preferred Stock that are convertible into shares of Class A Common Stock on a one-for-one basis. |
21
|
(12)
|
Based
on a statement on Schedule 13G filed with the SEC on February
7, 2006 by
Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson,
Jr. and
Franklin Advisory Services, LLC. Includes 300,000 shares of the
Company’s
Convertible Participating Preferred Stock that are convertible
into shares
of Class A Common Stock on a one-for-one basis.
|
|
(13)
|
Based
on a statement on Schedule 13D filed with the SEC on August 16,
2006 by I.
Wistar Morris, III. Mr. Morris has the sole voting power and
the sole
investment power over 184,700 shares held for his benefit in
nominee name.
He has no voting power but he has shared investment power with
respect to
the 178,180 shares held by his wife, in nominee name for her
benefit and
the 138,600 shares held in nominee name for the benefit of his
children,
as well as, the 38,942 shares registered in nominee name for
a Foundation
in which he is the co-trustee.
|
|
(14)
|
Based
on a statement on Schedule 13G filed with the SEC on February
6, 2007 by
Arnhold and S. Bleichroeder Advisers, LLC. Includes 207,290 shares
of the
Company’s Convertible Participating Preferred Stock that are convertible
into shares of Class A Common Stock on a one-for-one
basis.
|
|
(15)
|
Based
on a statement on Schedule 13D filed with the SEC on March 22,
1996 by The
Pillsbury Company (now a subsidiary of General Mills, Inc.) and
Grand
Metropolitan.
|
|
(16)
|
Based
on an amended statement on Schedule 13G filed with the SEC on
February 14,
2007 by T. Rowe Price Associates, Inc. (Price Associates). These
securities are owned by various individual and institutional
investors,
which Price Associates serves as investment adviser with power
to direct
investments and/or sole power to vote the securities. For purposes
of the
reporting requirements of the Exchange Act, Price Associates
is deemed to
be a beneficial owner of such securities; however, Price Associates
expressly disclaims that it is, in fact, the beneficial owner
of such
securities.
|
|
(17)
|
Mr.
Kayser has sole voting and investment power over 66,528 shares
of Class A
Common Stock owned by him and sole voting but no investment power
over
5,550 shares owned by his siblings and their children, which
are subject
to a voting trust agreement of which Mr. Kayser is a trustee.
Mr. Kayser
has shared voting and investment power with respect to 72,269
shares held
in two trusts of which he is a co-trustee and in which he and
members of
his family are beneficiaries. The shares reported in the table
include
76,936 shares held by the Seneca Foods Foundation (the “Foundation”), of
which Mr. Kayser is a director. The shares reported in the table
do not
include (i) 14,902 shares owned by Mr. Kayser’s mother, (ii) 19,000 shares
held in trust for Mr. Kayser’s mother, (iii) 4,900 shares held by Mr.
Kayser’s brothers, or (iv) 398,239 shares held by the Seneca Foods
Corporation Employee Savings Plan (the “401(k) Plan”), over which the
Company’s officers may be deemed to have shared voting and investment
power. Mr. Kayser has shared voting and investment power with
respect to
the shares held by the Foundation. He disclaims beneficial ownership
of
the shares held by his mother and in trust for his mother, the
shares held
by his brother and the shares held by the 401(k)
Plan.
|
|
(18)
|
The
shares in the table include (i) 12,616 shares of Class A Common
Stock held
by Ms. Stuart’s husband, (ii) 15,736 shares owned by her sister’s
children, of which Ms. Stuart is the trustee, (iii) 76,936 shares
held by
the Foundation, of which Ms. Stuart is a director. Ms. Stuart
has shared
voting and investment power with respect to the shares held by
the
Foundation and sole voting and investment power with respect
to the shares
owned by her sister’s children. She disclaims beneficial ownership of the
shares held by her husband.
|
|
(19)
|
The
shares in the table include (i) 29,531 shares of Class A Common
Stock held
by Mr. Wolcott’s wife, (ii) 76,936 shares held by the Foundation, of which
Mr. Wolcott is a director. The shares reported in the table do
not include
(i) 308,528 shares of Class A Common Stock held directly by Mr.
and Mrs.
Wolcott’s offspring and their families, or (ii) 398,239 shares held by
the
401(k) Plan, over which the Company’s officers may be deemed to have
shared voting and investment power. Mr. Wolcott has shared voting
and
investment power with respect to the shares held by the Foundation.
He
disclaims beneficial ownership with respect to the shares held
by his
wife, his offspring and their families and the 401(k)
Plan.
|
|
(20)
|
Mr.
Kayser has sole voting and investment power over 82,770 shares
of Class B
Common Stock he owns and sole voting but no investment power
over 10,050
shares owned by his siblings and their children, which are
subject to a
voting trust agreement of which Mr. Kayser is a trustee. Mr.
Kayser has
shared voting and investment power with respect to 75,944 shares
held in
two trusts of which he is a co-trustee and in which he and
members of his
family are beneficiaries. The shares in the table include (i)
279,300
shares held by the Pension Plan, of which Mr. Kayser is a trustee
and (ii)
74,924 shares held by the Foundation, of which Mr. Kayser is
a director.
The shares in the table do not include (i) 14,912 shares owned
by Mr.
Kayser’s mother, or (ii) 19,000 shares held in trust for Mr. Kayser’s
mother, and (iii) 57,141 shares held by the 401(k) Plan. Mr.
Kayser has
shared voting and investment power with respect to the shares
held by the
Pension Plan and the Foundation. He disclaims beneficial ownership
of the
shares held by his mother and in trust for his mother and the
shares held
by the 401(k) Plan.
|
22
|
(21)
|
The
shares reported in the table include (i) 18,894 shares of Class
B Common
Stock held by Ms. Stuart’s husband, (ii) 40,848 shares owned by her
sister’s children, of which Ms. Stuart is the trustee, (iii) 279,300
shares held by the Pension Plan, of which Ms. Stuart is a trustee
and (iv)
74,924 shares held by the Foundation, of which Ms. Stuart is
a director.
Ms. Stuart has shared voting and investment power with respect
to the
shares held the Pension Plan and the Foundation and sole voting
and
investment power with respect to the shares owned by her sister’s
children. She disclaims beneficial ownership of the shares held
by her
husband.
|
|
(22)
|
Based
on an amended statement on Schedule 13D filed with the SEC on
July 8, 2004
by Nancy A. Marks and certain related investors. The shares reported
in
the table include 130,000 shares held in trust of which she is
a
trustee.
|
|
(23)
|
The
shares in the table include (i) 8,584 shares of Class B Common
Stock held
by Mr. Wolcott’s wife, (ii) 279,300 shares held by the Pension Plan, of
which Mr. Wolcott is a trustee and (iii) 74,924 shares held by
the
Foundation, of which Mr. Wolcott is a director. The shares in
the table do
not include (i) 448,608 shares of Class B Common Stock held directly
by
Mr. and Mrs. Wolcott’s offspring and their families or (ii) 57,141 shares
held by the 401(k) Plan. Mr. Wolcott has shared voting and investment
power with respect to the shares held by the Pension Plan and
the
Foundation. He disclaims beneficial ownership with respect to
the shares
held by his wife, his offspring and their families and the 401(k)
Plan.
|
Security
Ownership of Management and Directors
The
following table sets forth certain information available to the Company
with
respect to shares of all classes of the Company’s voting securities owned by
each director, each nominee for director, each executive officer and all
directors, nominees and executive officers as a group, as of March 31,
2007.
Beneficial ownership for these purposes is determined in accordance with
applicable SEC rules and includes shares over which a person has sole or
shared
voting power or investment power. The holdings of Common Stock listed in
the
table do not include the shares obtainable upon conversion of the 10% Series
A
Preferred Stock and the 10% Series B Preferred Stock, which currently are
convertible into both Class A Common Stock and Class B Common Stock on
the basis
of 20 and 30 shares of Preferred Stock, respectively, for each share of
Common
Stock.
23
|
Name
of Beneficial Owner
|
Title
of Class
|
Shares
Beneficially Owned
|
Percent
of Class (1)
|
|
Arthur
H. Baer
|
Class
B Common Stock
|
3,000
|
*%
|
|
Andrew
M. Boas
|
Class
A Common Stock (2)
Class
B Common Stock
|
2,409,711
53,975
|
33.36
1.95
|
|
Robert
T. Brady
|
Class
A Common Stock (3)
|
1,500
|
*
|
|
Douglas
F. Brush
|
Class
B Common Stock
|
770
|
*
|
|
G.
Brymer Humphreys
|
Class
A Common Stock (4)
Class
B Common Stock
|
1,200
800
|
*
*
|
|
Kraig
H. Kayser
|
Class
A Common Stock (5)
Class
B Common Stock (5)
6%
Preferred Stock (5)
10%
Series A Preferred Stock (5)
10%
Series B Preferred Stock (5)
|
224,658
522,988
8,000
173,812
165,080
|
4.67
18.94
4.00
42.68
41.27
|
|
Susan
W. Stuart
|
Class
A Common Stock (6)
Class
B Common Stock (6)
6%
Preferred Stock (6)
|
162,502
477,458
25,296
|
3.38
17.29
12.65
|
|
Thomas
Paulson
|
Class
A Common Stock
|
500
|
*
|
|
Arthur
S. Wolcott
|
Class
A Common Stock (7)
Class
B Common Stock (7)
6%
Preferred Stock (7)
10%
Series A Preferred Stock (7)
10%
Series B Preferred Stock (7)
|
127,090
371,359
32,844
212,840
212,200
|
2.64
13.45
16.42
52.26
53.05
|
|
Roland
E. Breunig
|
--
|
--
|
|
|
Paul
L. Palmby
|
--
|
--
|
|
|
Carl
A. Cichetti
|
--
|
--
|
|
|
Philip
G. Paras
|
Class
A Common Stock
Class
B Common Stock
|
1,000
1,500
|
*
*
|
|
All
directors and executive officers as a group
|
Class
A Common Stock (8)
Class
B Common Stock (8)
6%
Preferred Stock (8)
10%
Series A Preferred Stock (8)
10%
Series B Preferred Stock (8)
|
2,775,315
725,415
66,140
386,652
377,280
|
38.71
26.27
33.07
94.94
94.32
|
_________________________
* Less
than
1.0%.
24
| (1) | The applicable percentage of beneficial ownership is based on the number of shares of each class of voting stock outstanding as of the March 31, 2007. With respect to certain persons, the percentage of beneficial ownership of Class A Common Stock includes the shares of Class A Common Stock that may be acquired upon conversion of the Company’s Convertible Participating Preferred Stock but such shares are not treated as outstanding for the purpose of computing the percentage ownership of any other person. |
|
(2)
|
Includes
2,355,736 shares of the Company’s Convertible Participating Preferred
Stock indirectly owned by Carl Marks Management Company, L.P.
Mr. Boas is
a general partner of Carl Marks Management Company, L.P. and
may be deemed
to be the beneficial owner of such shares, which are convertible
into
shares of Class A Common Stock on a one-for-one basis. See note
8 to the
table under the heading “ -- Security Ownership of Certain Beneficial
Owners.”
|
|
(3)
|
Does
not include 300 shares of Class A Common Stock and 300 shares
of Class B
Common Stock owned by Mr. Brady’s children as to which Mr. Brady disclaims
beneficial ownership.
|
|
(4)
|
Includes
400 shares of the Company’s Convertible Participating Preferred Stock,
which are convertible into shares of Class A Common Stock on
a one-for-one
basis.
|
|
(5)
|
See
notes 4, 7, 17, and 20 to the table under the heading “ -- Security
Ownership of Certain Beneficial
Owners.”
|
|
(6)
|
See
notes 18 and 21 to the table under the heading “ -- Security Ownership of
Certain Beneficial Owners.”
|
|
(7)
|
See
notes 2, 3, 6, 19, and 23 to the table under the heading “ -- Security
Ownership of Certain Beneficial
Owners.”
|
|
(8)
|
See
footnotes (2) through (7).
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires that the Company’s directors, officers and
shareholders owning more than 10% of a registered class of equity securities
of
the Company file reports regarding their ownership and changes in that
ownership
with the SEC. The Company is not aware that any from this group failed
to make
such filings in a timely manner during the past year except that the Form
3 for
Mr. Breunig, which indicated no initial holdings of the Company’s stock, was
inadvertently filed late.
PROPOSAL
TWO: 2007 EQUITY INCENTIVE
PLAN
The
Board
of Directors adopted the Seneca Foods Corporation 2007 Equity Incentive
Plan on
May 31, 2007, upon recommendation of the Compensation Committee and subject
to
approval by the shareholders.
A
summary
of the 2007 Equity Incentive Plan is set forth below. The summary is qualified
in its entirety by reference to the full text of the plan, which is attached
as
Appendix A.
Summary
of the 2007 Equity Incentive Plan
The
2007
Equity Incentive Plan authorizes the issuance of a total of 100,000 shares
of
the Company’s Common Stock under awards of restricted stock and restricted stock
units to eligible employees of the Company. Awards may be made in shares
of
Class A Common Stock or Class B Common Stock, or in a combination of Class
A
Common Stock and Class B Common Stock.
The
2007
Equity Incentive Plan provides that whenever an award is forfeited or cancelled,
the shares subject to the award will again be available under the plan.
Shares
awarded under the plan may be newly issued shares or shares purchased in
open
market or privately negotiated transactions.
25
The
Compensation Committee of the Board of Directors will administer the 2007
Equity
Incentive Plan.
The
employees of the Company eligible to be selected for awards under the 2007
Equity Incentive Plan are the officers, executives, and other key employees
as
determined by the Compensation Committee.
Under
the
2007 Equity Incentive Plan, the Compensation Committee will select eligible
employees of the Company to whom restricted stock will be awarded and will
determine the number of shares of restricted stock to be awarded. Restricted
stock will be forfeitable and not assignable or transferable until the
satisfaction of one or more, or alternative, conditions prescribed by the
Compensation Committee. The conditions may relate to the achievement of
performance goals, the continuation of the employment of the employee,
or other
matters. The employee will be entitled to receive dividends, if any, on
and vote
restricted stock during the period the restricted stock is forfeitable.
If the
only condition attached to the vesting of restricted stock is the performance
of
future services, then, unless the Compensation Committee specifies otherwise,
the award will vest at the rate of 25 percent per year. An employee will
forfeit
restricted stock upon termination of employment while the shares remain
forfeitable, unless the Compensation Committee specifies otherwise in the
case
of death or disability.
The
Compensation Committee may also select employees of the Company to whom
restricted stock units will be awarded and will determine the number of
restricted stock units to be awarded. Restricted stock units will not be
assignable or transferable. Restricted stock units will be forfeitable
until the
satisfaction of one or more, or alternative, conditions prescribed by the
Compensation Committee. The conditions may relate to the achievement of
performance goals, the continuation of the employment of the employee,
or other
matters. If the only condition attached to the vesting of an award of restricted
stock units is the performance of future services, then, unless the Compensation
Committee specifies otherwise, the award will vest at the rate of 25 percent
per
year. An employee will forfeit restricted stock units upon termination
of
employment while the restricted stock units remain forfeitable, unless
the
Compensation Committee specifies otherwise in the case of death or disability.
A
restricted stock unit will be paid out upon vesting or, if specified by
the
Compensation Committee at the time of the award, at a later date. Payment
will
be made in the form of the Company’s Common Stock--one share of Common Stock for
each restricted stock unit, either Class A Common Stock or Class B Common
Stock,
as specified by the Compensation Committee at the time of the award. A
restricted stock unit does not carry voting or dividend rights, but the
Compensation Committee may provide for the award of a dividend equivalent
in
conjunction with the award of a restricted stock unit. A dividend equivalent
will not be credited unless a dividend is declared and paid to all holders
of
Class A or Class B Common Stock of the Company. Dividend equivalents may
be paid
currently or accrued as contingent cash compensation, or may be converted
into
additional restricted stock units, as specified by the Compensation Committee
at
the time of the award. Restricted stock units are treated in the same way
as
restricted stock for purposes of determining the number of shares available
under the 2007 Equity Incentive Plan.
In
the
event of a share dividend or distribution, recapitalization, split,
reorganization, merger, consolidation, spin off, or other similar corporate
event that affects the Corporation’s Class A Common Stock or Class B Common
Stock, the Compensation Committee will
26
determine
how to adjust, in an equitable manner, the remaining number of shares available
for award under the 2007 Equity Incentive Plan and the number of shares
subject
to outstanding restricted stock unit awards.
A
change
in control of the Company (as defined in the plan) will affect restricted
stock
and restricted stock units as follows. If the only condition attached to
the
vesting of restricted stock or restricted stock units is the performance
of
future services, then the restricted stock or restricted stock units will
vest
upon a change in control. If vesting of restricted stock or restricted
stock
units is conditioned on achievement of a performance goal, then the restricted
stock or restricted stock units will, unless otherwise specified by the
Compensation Committee at the time of the award, vest upon a change of
control
only to the extent of a number of shares proportionate to the time elapsed
in
the performance period and the achievement of the performance goal at a
target
level.
The
Board
of Directors may amend the 2007 Equity Incentive Plan, except that, without
shareholder approval, the Board of Directors may not increase the number
of
shares of Common Stock available under the plan, materially increase the
benefits accruing to employees, extend the term of the plan, change the
classes
of employees to whom awards may be made, or expand the types of awards
that may
be made under the plan.
Proposed
Awards
The
following table presents information with respect to the fair market value
of
shares of restricted stock anticipated to be granted by the Compensation
Committee under the 2007 Equity Incentive Plan with respect to Fiscal 2008
compensation. These awards are subject to approval of the 2007 Equity Incentive
Plan by our shareholders at the Annual Meeting.
|
Name
|
Fair
Market Value of Restricted Stock
|
|||
|
Roland
E. Breunig
|
$
|
12,500
|
||
|
Carl
A. Cichetti
|
$
|
12,500
|
||
|
John
D. Exner
|
$
|
12,500
|
||
|
Cynthia
L. Fohrd
|
$
|
12,500
|
||
|
Paul
L. Palmby
|
$
|
50,000
|
||
Vote
Required for Approval
The
affirmative vote of a majority of the votes eligible to be cast at the
Annual
Meeting is required to approve the 2007 Equity Incentive Plan. Your Board
of
Directors recommends that you vote FOR this proposal. Unless otherwise
instructed, proxies will be voted FOR ratification of the adoption of the
2007
Equity Incentive Plan. If approved by the shareholders, the 2007 Equity
Incentive Plan will be effective as of August 10, 2007.
27
PROPOSAL
THREE: RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit
Committee of the Board of Directors has appointed BDO Seidman, LLP to act
as
auditors for the fiscal year ending March 31, 2008. BDO Seidman has served
as
the Company’s registered independent public accounting firm since December 8,
2005. On such date, the Company terminated Ernst & Young LLP from serving as
its independent accountants. A representative of BDO Seidman is expected
to be
present at the Annual Meeting and will have an opportunity to make a statement,
if he or she so desires, and will be available to respond to appropriate
questions.
At
the
Annual Meeting, the shareholders will be asked to ratify the selection
of BDO
Seidman as the Company’s independent registered public accounting firm. Pursuant
to the Rules and Regulations of the Securities and Exchange Commission,
the
Audit Committee has the direct responsibility to appoint, retain, fix the
compensation and oversee the work of the Company’s independent registered public
accounting firm. Consequently, the Audit Committee will consider the results
of
the shareholder vote on ratification, but will exercise its judgment, consistent
with its primary responsibility, on the appointment and retention of the
Company’s independent auditors.
The
affirmative vote of a majority of the votes cast on the proposal, assuming
a
quorum is present at the Meeting, is required to ratify the appointment
of BDO
Seidman. The directors of the Company unanimously recommend a vote FOR
the
ratification of BDO Seidman as the Company’s independent registered public
accounting firm for the fiscal year ending March 31, 2008. Unless otherwise
instructed, proxies will be voted FOR ratification of the appointment of
BDO
Seidman.
Principal
Accountant Fees and Services
The
following table shows the fees paid or accrued by the Company for the audit
and
other services provided by BDO Seidman and Ernst & Young LLP for fiscal
years 2007 and 2006.
|
2007
|
2006
|
||||||
|
Audit
Fees (1)
|
|||||||
|
-
Audit of consolidated financial statements (2)
|
$
|
241,167
|
$
|
257,038
|
|||
|
-
Audit of internal control over financial reporting (2)
|
380,061
|
455,107
|
|||||
|
-
Timely quarterly reviews
|
46,000
|
45,000
|
|||||
|
Total
Audit Fees
|
$
|
667,228
|
$
|
757,145
|
|||
|
Audit-Related
Fees (3)
|
56,010
|
--
|
|||||
|
Tax
Fees (4)
|
--
|
20,000
|
|||||
|
All
Other Fees
|
--
|
--
|
|||||
|
Total
|
$
|
723,238
|
$
|
777,145
|
|||
_________________________
28
| (1) | Includes fees and expenses related to the fiscal year audit and interim reviews, notwithstanding when the fees and expenses were billed or when the services rendered. Fiscal year 2007 audit fees included $16,827 of Ernst & Young LLP related fees. Fiscal year 2006 audit fees included $232,582 of Ernst & Young LLP related fees. |
|
(2)
|
Includes
fees and expenses billed through June 15,
2007.
|
|
(3)
|
Includes
fees and expenses for services rendered from April through March
of the
fiscal year, notwithstanding when the fees and expenses were
billed.
Consists of attestations related to SEC filings, including 8-K’s related
to acquisitions, comfort letters, consents, and comment letters.
|
|
(4)
|
Consists
of professional tax services rendered by BDO Seidman, LLP for
tax
planning.
|
All
audit, audit-related and non-audit services were pre-approved by the Audit
Committee, which concluded that the provision of such services by BDO Seidman
was compatible with the maintenance of that firm’s independence in the conduct
of its auditing functions. The Audit Committee’s pre-approval policies provide
that the Chairman of the Audit Committee has the authority to approve individual
audit related and permitted non-audit engagements up to $10,000. Larger
engagements require majority Audit Committee approval. There were no engagements
of this type provided by the principal accountant during the last two years.
Changes
in Certifying Accountant
On
December 8, 2005, the Board of Directors unanimously approved the recommendation
of the Audit Committee to engage the accounting firm of BDO Seidman, LLP
as its
new independent public accountants for its audit engagement. Also on December
8,
2005, the Company’s Board of Directors unanimously approved the recommendation
of the Audit Committee to dismiss Ernst & Young LLP. The Company’s
Certificate of Incorporation requires the unanimous approval of the Board
of
Directors to effect the actions described in this paragraph. On December
8,
2005, the Company dismissed Ernst & Young LLP.
The
reports of Ernst & Young LLP on the consolidated financial statements of the
Company, for the fiscal years ended March 31, 2005 and 2004 did not contain
an
adverse opinion or a disclaimer of opinion and were not qualified or modified
as
to uncertainty, audit scope or accounting principles.
The
decision to change the Company’s accounting firm was made by the Audit Committee
of the Company’s Board of Directors on December 8, 2005.
In
connection with the audits of the Company’s financial statements for each of the
fiscal years ended March 31, 2005 and 2004 and in the subsequent interim
periods
from April 1, 2005 through and including December 8, 2005, there were no
disagreements between the Company and its auditors, Ernst & Young LLP, on
any matter of accounting principles or practices, consolidated financial
statement disclosure, or auditing scope and procedures, which, if not resolved
to the satisfaction of Ernst & Young LLP would have caused Ernst & Young
LLP to make reference to the matter in their reports.
During
the fiscal years ended March 31, 2005 and 2004 and through December 8,
2005,
there were no “reportable events” as that term is described in Item 304(a)(1)(v)
of Regulation S-K, except as described below:
29
In
accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the Company
completed its assessment of the effectiveness of its internal control over
financial reporting and concluded that the Company’s internal control over
financial reporting was not effective as of March 31, 2005 due to material
weakness in its internal control related to (i) the application of accounting
principles over the determination and calculation of asset impairments
in
accordance with FAS 144, (ii) the calculation and review of accrued promotion
expense, and (iii) the selection and monitoring of key assumptions supporting
accounting estimates, based on criteria established in Internal Control
--
Integrated Framework issued by the Committee of Sponsoring Organizations
of the
Treadway Commission. Ernst &Young LLP concurred with the Company’s
assessment of the effectiveness of its internal control over financial
reporting. During 2006, the Company completed remediation measures to address
the material weaknesses. More details on the remediation of these material
weaknesses are discussed in Item 9A of the Company’s Form 10-K for the year
ended March 31, 2006.
The
Company has not consulted with BDO Seidman, LLP during the fiscal years
ended
March 31, 2005 and 2004 or during the subsequent interim periods from April
1,
2005 through and including December 8, 2005, on either the application
of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company’s
consolidated financial statements.
The
Company requested Ernst & Young LLP to furnish a letter addressed to the
Securities and Exchange Commission stating whether Ernst & Young LLP agrees
with the statements made above by the Company. Such letter was
provided.
The
management of the Company does not know of any other matters to come before
the
Annual Meeting. However, if any other matters come before the Annual Meeting,
it
is the intention of the persons designated as proxies to vote in accordance
with
their judgment on such matters.
SHAREHOLDER
PROPOSALS FOR
THE
2008
ANNUAL MEETING
Proposals
for the Company’s Proxy Material
Any
Company shareholder who wishes to submit a proposal for presentation at
the
Company’s 2008 Annual Meeting must submit such proposal to the Company at its
office at 3736 South Main Street, Marion, New York 14505, Attention: Secretary,
no later than March 3, 2008, in order to be considered for inclusion, if
appropriate, in the Company’s proxy statement and form of proxy relating to its
2008 Annual Meeting.
30
Proposals
to be Introduced at the Annual Meeting but not Intended to be Included
in the
Company’s Proxy Material
For
any
shareholder proposal to be presented in connection with the 2008 Annual
Meeting,
including any proposal relating to the nomination of a director to be elected
to
the Board of Directors of the Company, a shareholder must give timely written
notice thereof to the Company in compliance with the advance notice provisions
of the federal securities laws. To be timely, a qualified shareholder must
give
written notice to the Company at the Company’s offices not later than May 17,
2008.
BY
ORDER
OF THE BOARD OF DIRECTORS
JEFFREY
L. VAN RIPER
Secretary
31
SENECA
FOODS CORPORATION
2007
EQUITY INCENTIVE PLAN
ARTICLE
1
Purpose
and Duration
1.1 Introduction.
Seneca Foods, (the "Corporation") establishes the Seneca Foods Corporation
2007
Equity Incentive Plan (the "Plan"), effective August 3, 2007, subject to
the
approval of the Corporation’s shareholders.
1.2 Purpose
of the Plan. The purpose of this 2007 Equity Incentive Plan is to encourage
Employees' long term commitment to the Corporation, to provide incentive
for
Employees to exert their best efforts on behalf of the Corporation, and
to
further align the interests of Employees with those of the Corporation’s
shareholders.
1.3 Forms
of
Incentives. This Plan will provide incentives for certain Employees through
grants of Restricted Stock and Restricted Stock Units.
1.4 Duration
of the Plan. The Plan shall remain in effect, subject to the right of the
Board
of Directors to amend or terminate the Plan, until all Shares subject to
the
Plan shall have been acquired according to the Plan’s provisions. However, no
Award may be granted under the Plan after August 3, 2017.
ARTICLE
2
Definitions
As
used
in this Plan,
2.1 "Award"
means a grant under this Plan of Restricted Stock or Restricted Stock
Units.
2.2 "Award
Agreement" means an agreement entered into by the Corporation and a Participant,
or documentation published by the Corporation unilaterally, establishing
the
terms of an Award in addition to those established by the Plan and the
Committee’s exercise of its powers.
2.3 "Board"
or "Board of Directors" means the Board of Directors of the
Corporation.
2.4 "Change
in Control" has the meaning given in Section 10.1.
2.5 "Class
A
Common Stock" means the Class A common stock, $0.25 par value, of the
Corporation.
2.6 "Class
B
Common Stock" means the Class B common stock, $0.25 par value, of the
Corporation.
2.7 "Code"
means the Internal Revenue Code of 1986, as amended from time to
time.
2.8 "Committee"
means the Compensation Committee of the Board of Directors.
2.9 "Common
Stock" means Seneca Class A Common Stock and Seneca Class B Common Stock,
or
either of those classes of the Corporation's common stock.
2.10 "Director"
means a member of the Board of Directors of the Corporation.
2.11 "Disability"
means, unless the Committee specifies a different definition in an Award
Agreement, a medically determinable physical or mental impairment that
may be
expected to result in death or to last at least a year and that renders
an
Employee incapable of performing the Employee’s duties with the Corporation. The
Committee shall determine whether a Participant is subject to a
Disability.
2.12 "Effective
Date" means the effective date of the Plan, which is August 10,
2007.
2.13 "Employee"
means an employee of the Corporation or a Subsidiary who is an officer,
executive, or other key employee, as determined by the Committee in its
discretion.
2.14 "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to
time.
2.15 "Fair
Market Value" of a Share of Class A Common Stock or Class B Common Stock
on any
date means the closing price of such a Share if the relevant class of the
Corporation's Common Stock is listed on an exchange or the mean between
the
closing bid and the asked prices for that date if the relevant class of
the
Common Stock is traded over the-counter (or, if no such Shares were publicly
traded on that date, the next preceding date that such Shares were so traded),
all as published in The Wall Street Journal or in any other publication
selected
by the Committee; provided, however, that if such Shares shall not have
been
publicly traded for more than ten days immediate preceding such date, then
the
Fair Market Value of such a Share shall be determined by the Committee
in such
manner as it may find appropriate.
2.16 "Participant"
means an Employee who has been selected to participate in the Plan and
has an
outstanding Award granted under the Plan.
2.17 "Performance-Based
Exception" means the performance-based exception from the tax deductibility
limit of Code section 162(m).
2.18 "Restricted
Period" means the period described in Section 6.1 or 7.1 during which Restricted
Stock or a Restricted Stock Unit is not vested.
2.19 "Restricted
Stock" has the meaning given in Section 6.1.
2.20 "Restricted
Stock Unit" has the meaning given in Section 7.1.
2.21 "Share"
means a Share of the Corporation's Class A Common Stock or Class B Common
Stock.
2.22 "Subsidiary"
means any entity of which a majority of any class of equity security or
ownership interest is owned, directly or indirectly, by the
Corporation.
ARTICLE
3
Administration
3.1 Authority
of the Committee. The Committee shall administer the Plan. Except as limited
by
law and subject to the provisions of the Plan, the Committee shall have
full
power and discretion to: select Employees who shall participate in the
Plan;
determine the sizes and types of Awards; determine the terms and conditions
of
Awards and the Award Agreements; construe and interpret the Plan and Award
Agreements; establish, amend, or waive rules for the Plan’s administration;
correct defects, supply omissions, or reconcile inconsistencies in the
Plan and
Award Agreements; and make all other determinations and take all other
action
the Committee may find necessary or advisable for the administration of
the
Plan. In exercising its discretion under the Plan or any Award, the Committee
shall not be required to follow past practices or treat any Participant
in a
manner consistent with the treatment of other Participants.
3.2 Delegation
of Authority. The Committee may delegate to officers of the Corporation
its
duties, power, and authority under the Plan pursuant to such conditions
or
limits as the Committee may establish, except that only the Committee or
the
Board may select, and grant Awards to, Participants who are subject to
section
16 of the Exchange Act, and only the Committee may act with respect to
Awards
intended to satisfy the Performance Based Exception to Code section
162(m).
3.3 Decisions
Binding. All determinations made by the Committee under the Plan shall
be final
and binding on all persons.
ARTICLE
4
Shares
Subject to the Plan and Maximum Awards
4.1 Number
and Type of Shares Subject to Awards. There are reserved for issuance pursuant
to Awards under the Plan 100,000 Shares of the Corporation's Common Stock.
Awards
may
be
made in Class A Common Stock or Class B Common Stock, or in a combination
of
those classes of Common Stock.
4.2 Source
of
Shares. Shares issued pursuant to the Plan may be either newly issued Shares,
or, at the Committee’s discretion, Shares purchased in open market or privately
negotiated transactions from third parties, or from a combination of those
sources.
4.3 Reissuance.
The number of Shares with respect to Awards that are forfeited or canceled
shall
again be available for issuance pursuant to Awards under the Plan.
4.4 Adjustments
in Authorized Shares. If a dividend or other distribution, recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, Share exchange, liquidation, dissolution, or other
similar corporate transaction or event affects the Corporation's Class
A Common
Stock or Class B Common Stock, then the Committee shall, in such manner
as it
may determine equitable, substitute or adjust any or all of (a) the remaining
limits on the number and kind of Shares available for Awards subsequently
granted, and (b) the number and kind of Shares subject to or deliverable
with
respect to outstanding Awards.
ARTICLE
5
Eligibility
and Participation
5.1 Eligibility.
All Employees are eligible to participate in the Plan.
5.2 Awards.
The Committee may, from time to time, select Employees to whom Awards shall
be
granted and shall determine the nature and terms of, and the number of
Shares
subject to, each Award.
ARTICLE
6
Restricted
Stock
6.1 Restricted
Stock Award. A Restricted Stock Award is a grant of Shares of the Corporation's
Class A Common Stock or Class B Common Stock, or both, in which the
Participant’s interest will become vested only upon the satisfaction, lapse, or
waiver of specified conditions, which may include, without limit, the
performance of future services or the achievement of performance goals.
The
"Restricted Period" is the period between the date of grant of Restricted
Stock
and the date as of which the vesting conditions with respect to a Share
of
Restricted Stock are satisfied, lapse, or are waived.
If
the
only condition on vesting is performance of future services, then, unless
the
Committee specifies otherwise, the Restricted Period shall be four years,
with
the Award vesting at the rate of 25 percent per year, subject to Section
6.7.
6.2 Grant
of
Restricted Stock. The Corporation shall grant Restricted Stock Awards to
Employees at the times, with respect to the number of Shares, and subject
to the
conditions and Restricted Period established by the Committee.
6.3 Award
Agreement; Share Certificate. A Restricted Stock Award shall be evidenced
by an
Award Agreement that shall specify the number of Shares granted, the conditions
to which the Award is subject, the Restricted Period, and such other provisions
as the Committee may determine. The Corporation shall retain in its possession
the certificates representing Shares of Restricted Stock until such time
as such
Shares have become vested.
6.4 Nontransferability.
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated before the end of the applicable Restricted Period. Furthermore,
the
Award Agreement may impose restrictions on transfer of Restricted Shares
after
the end of the applicable Restricted Period, including restrictions on
transfer
during continued employment and restrictions to comply with securities
laws or
the requirements of any stock exchange or market.
6.5 Voting
Rights. A Participant may, during the Restricted Period, exercise full
voting
rights with respect to Shares of Restricted Stock granted to the
Participant.
6.6 Dividends
and Other Distributions. During the Restricted Period, dividends and other
distributions with respect to Shares of Restricted Stock shall be paid
currently
to the Participant to whom the Restricted Stock was granted.
6.7 Termination
of Employment.
(a) Except
as
provided in Section 6.7(b), upon termination of a Participant’s employment with
the Corporation and its Subsidiaries during the Restricted Period, the
Participant shall forfeit all Restricted Stock with respect to which the
Restricted Period has not ended.
(b) An
Award
Agreement may provide that, upon termination of a Participant’s employment by
reason of death or Disability, the Restricted Period for outstanding Shares
of
Restricted Stock granted to the Participant shall end and the Participant’s
interest in those Shares shall become fully vested.
ARTICLE
7
Restricted
Stock Units
7.1 Restricted
Stock Unit Award. A Restricted Stock Unit Award entitles the Participant
to
delivery in the future of Shares of the Corporation's Class A Common Stock
or
Class B Common Stock, or both, or payment of their Fair Market Value in
cash, at
a time specified by the Committee after satisfaction, lapse, or waiver
of any
conditions established by the Committee. The "Restricted Period" is the
period
between the date of grant of a Restricted
Stock
Unit and the date as of which the vesting conditions with respect to the
Restricted Stock Unit are satisfied, lapse, or are waived.
If
the
only condition on vesting is the performance of future services, then,
unless
the Committee specifies otherwise, the Restricted Period shall be four
years,
with the Award vesting at the rate of 25 percent per year, subject to Section
7.7.
7.2 Grant
of
Restricted Stock Units. The Corporation shall grant Restricted Stock Units
to
Employees at the time, with respect to the number of Shares, and subject
to any
conditions and Restricted Period established by the Committee.
7.3 Award
Agreement. A Restricted Stock Unit Award shall be evidenced by an Award
Agreement that shall specify the number of Shares covered by the Award,
any
conditions to which the Award is subject, the Restricted Period, when the
Award
shall be satisfied, whether the Award shall be satisfied by delivery of
Shares
or cash payment, and such other provisions as the Committee may
determine.
7.4 Nontransferability.
A Restricted Stock Unit may not be sold, transferred, pledged, assigned,
or
otherwise alienated.
7.5 No
Shareholder Rights. A Restricted Stock Unit shall carry with it no voting
or
dividend or other rights associated with Share ownership.
7.6 Dividend
Equivalents. Notwithstanding Section 7.5, the Committee may determine to
grant
the equivalent of dividends on the number of Shares covered by a Restricted
Stock Unit Award. Dividend equivalents may be paid currently, accrued as
contingent cash compensation, or converted into additional Restricted Stock
Unit
Awards, as determined by the Committee in the Award Agreement.
7.7 Termination
of Employment.
(a) Except
as
provided in Section 7.7(b), upon termination of a Participant’s employment with
the Corporation and its Subsidiaries during the Restricted Period, the
Participant shall forfeit all Restricted Stock Units with respect to which
the
Restricted Period has not ended.
(b) An
Award
Agreement may provide that, upon termination of a Participant’s employment by
reason of death or Disability, all conditions attached to delivery or payment
of
an outstanding Restricted Stock Unit Award shall end.
(c) A
Participant’s interest in any dividend equivalents granted to the Participant
pursuant to Section 7.6 and accumulated with respect to Restricted Stock
Units
and not paid before the termination of the Participant’s employment during the
Restricted Period shall be forfeited or become vested upon the termination
of
the Participant’s employment, in correspondence with the Participant’s interest
in the Restricted Share Units to which the dividend equivalents are
attributable.
7.8 Satisfaction
of Award. The Corporation shall satisfy a Restricted Stock Unit Award at
or
after the end of the Restricted Period, at such time as is provided for
in the
Award Agreement, by a delivery of Shares or cash payment, as specified
in the
Award Agreement. Any accrued dividend equivalents or the Shares covered
by the
Restricted Stock Unit Awards into which the dividend equivalents were converted
shall also then be paid or delivered, as applicable.
ARTICLE
8
Beneficiary
Designation
A
Participant may name a beneficiary or beneficiaries to whom any benefit
under
the Plan that becomes payable after or on account of the Participant’s death is
to be paid. If no designated beneficiary survives the Participant, the
Corporation shall pay such benefits to the Participant’s surviving spouse or, if
none, to the Participant’s estate.
ARTICLE
9
Status
of
Employees
9.1 Employment.
Nothing in the Plan shall interfere with or limit the right of the Corporation
or a Subsidiary to terminate a Participant’s employment at any time or confer
upon a Participant any right to continue in the employ of the Corporation
or a
Subsidiary.
9.2 Participation.
Awards under the Plan are in the discretion of the Committee. No Employee
shall,
as a result of the existence of the Plan, have the right to be selected
to
receive an Award under this Plan.
ARTICLE
10
Change
in
Control
10.1 Definition
of Change in Control. For purposes of this Plan, a "Change in Control"
shall
mean a change in control of a nature that would be required to be reported
in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), whether
or
not the Corporation is then subject to such reporting requirements; provided
that, without limitation, such a Change in Control shall be deemed to have
occurred if (a) any "person" (as such term is used in section 13(d) and
14(d) of
the Exchange Act) is or becomes "beneficial owner" (as defined in Rule
13d 3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 30 percent or more of the combined voting power
of the
Corporation’s then outstanding securities; or (B) during any period of two
consecutive years, the following persons (the "Continuing
Directors")
cease
for
any reason to constitute a majority of the Board: individuals who at the
beginning of such period constitute the Board and new Directors each of
whose
election to the Board or nomination for election to the Board by the
Corporation’s security holders was approved by a vote of at least two-thirds of
the Directors then still in office who either were Directors at the beginning
of
the period or whose election or nomination for election was previously
so
approved; or (C) the security holders of the Corporation approve a merger
or
consolidation of the Corporation with any other corporation, other than
(i) a
merger or consolidation that would result in the voting securities of the
Corporation outstanding immediately before the merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of such surviving entity) more than 50 percent of
the
combined voting power of the voting securities of the Corporation or of
such
surviving entity outstanding immediately after such merger or consolidation
or
(ii) a merger or consolidation that is approved by a Board having a majority
of
its members individuals who are Continuing Directors, of which Continuing
Directors not less than two-thirds have approved the merger or consolidation;
or
(D) the security holders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by
the Corporation of all or substantially all of the Corporation’s
assets.
10.2 Treatment
of Outstanding Awards. Upon a Change in Control:
(a) Subject
to subsection (c), any terms, conditions, restrictions, limits, and Restricted
Periods imposed on outstanding Restricted Stock Awards shall lapse.
(b) Subject
to subsection (c), any terms, conditions, restrictions, limits, and Restricted
Periods imposed on outstanding Restricted Share Units shall lapse, provided
that, unless the Change in Control is a change in the ownership or effective
control of the Corporation or a change of ownership of a substantial portion
of
the assets of the Corporation (within the meaning of section 409A of the
Internal Revenue Code), a Change in Control shall not accelerate the time
at
which Restricted Share Units and dividend equivalents attributable to them
shall
be paid or delivered.
(c) Except
as
otherwise provided in the Award Agreement, the vesting of Restricted Stock
or a
Restricted Share Unit that has been conditioned on the achievement of a
performance objective shall be accelerated as of the effective date of
the
Change in Control only to the extent of a pro rata number of Shares based
upon
an assumed achievement of all relevant performance objectives at target
levels,
and upon the length of time within the performance period elapsed before
the
effective date of the Change in Control.
ARTICLE
11
Amendment
and Termination of Plan and Awards
11.1 Amendment
and Termination of Plan. The Board of Directors may amend or terminate
the Plan
at any time; provided, however, that:
(a) without
the approval of shareholders, the Board of Directors may not amend the
Plan (i)
to increase (except for increases due to adjustments in accordance with
Section
4.4) the aggregate number of Shares for which Awards may be granted; (ii)
to
provide any material increase in benefits to Participants; (iii) to extend
the
duration of the Plan; (iv) to expand materially the class of individuals
eligible to participate in the Plan; or (v) to expand the type of Awards
available under the Plan, and
(b) without
the consent of the Participant or Participants adversely affected, the
Board of
Directors may not amend the Plan in a manner that has an adverse effect
on the
rights of any Participant under any outstanding Award.
11.2 Amendment
of Awards. The Committee may waive any conditions or rights under the terms
of,
or otherwise amend or terminate, any outstanding Award, prospectively or
retroactively. An amendment or termination shall not, without the Participant’s
consent, materially diminish the benefits of the Award provided, however,
that
the Participant's consent shall not be required if the Committee determines,
in
its discretion, that such amendment or termination is (a) advisable in
order for
the Corporation, Plan, or Award to satisfy any law or the requirements
of any
accounting standard or (b) not reasonably likely to diminish the benefits
of the
Award.
11.3 Compliance
with Section 409A. Except to the extent provided by the Committee, it is
the
intent of the Corporation that each Award satisfy the requirements of section
409A of the Code and applicable Treasury Department regulations to avoid
the
imposition of additional taxes and penalties under section 409A. Should
the
Committee determine that a Participant would be subject to additional tax
or
penalty under section 409A in connection with an Award, then the provision
of
the Award that would cause such additional tax or penalty shall be given
no
effect, and the Award Agreement shall be deemed modified or suspended by
the
Committee to the extent required to conform to the requirements of section
409A,
without the consent of or notice to the Participant, notwithstanding Sections
11.1 and 11.2.
ARTICLE
12
Withholding
12.1 Tax
Withholding. Subject to Section 12.2, the Corporation may deduct or withhold,
or
require a Participant to remit to the Corporation, an amount (either in
cash or
Shares) sufficient to satisfy the Corporation’s obligation to withhold federal,
state, and local taxes with respect to any taxable event arising under
or in
connection with Awards granted under this Plan.
12.2 Share
Withholding. With respect to withholding required upon the occurrence of
any
taxable event arising under or in connection with Awards granted under
this
Plan, the Corporation may satisfy its withholding obligation, in whole
or in
part, by withholding Shares having a Fair Market Value (determined on the
date
the Participant recognizes taxable income on the Award) equal to the withholding
tax required to be collected on the transaction. The Participant may elect,
however, subject to the approval of the Committee, to deliver to
the
Corporation
the funds, in whole or in part, necessary to satisfy the withholding obligation,
in which case there will be no reduction in the Shares otherwise distributable
to the Participant.
ARTICLE
13
Miscellaneous
13.1 Severability.
If a provision of the Plan shall be held illegal or invalid, the illegality
or
invalidity shall not affect the remaining parts of the Plan, and the Plan
shall
be construed and enforced as if the illegal or invalid provision had not
been
included.
13.2 Unfunded
Status of the Plan. The Plan is intended to be an "unfunded" plan for incentive
compensation. With respect to any payments or deliveries of Shares not
yet made
to a Participant by the Corporation, nothing contained in this Plan shall
give
any rights that are greater than those of a general creditor of the Corporation.
13.3 No
Representation with Respect to Taxation. Although the Corporation may endeavor
to qualify an Award for specific federal income tax treatment, the Corporation
makes no representation that any specific federal income tax treatment
is
available for any Award.
13.4 Governing
Law. To the extent not preempted by federal law, the Plan and all Award
Agreements shall be construed in accordance with and governed by the laws
of the
State of New York.
SENECA
FOODS CORPORATION
3736
South Main Street
Marion,
NY 14505
PROXY
FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 10, 2007
The
undersigned shareholder of SENECA FOODS CORPORATION (the "Company") hereby
appoints
and constitutes ARTHUR S. WOLCOTT and KRAIG H. KAYSER, and either
of
them,
the
proxy or proxies of the undersigned, with full power of substitution
and
revocation, for and in the name of the undersigned to attend the
annual
meeting
of shareholders of the Company to be held at 3736 South Main Street,
Marion,
New York, on Friday, August 10, 2007, at 1:00 p.m., Eastern
Daylight
Savings
Time, and any and all adjournments thereof (the "Meeting"), and to vote
all
shares of stock of the Company registered in the name of the undersigned
and
entitled
to vote at the Meeting upon the matters set forth below:
MANAGEMENT
RECOMMENDS A VOTE FOR ITEM 1, FOR ITEM 2 AND FOR ITEM 3.
1.
Election of Directors: Election of the three nominees to serve until the
annual
meeting
of shareholders in 2010 and until their successors are duly elected
and
shall
qualify:
[
]
FOR all nominees listed below (except as [ ]
WITHHOLD AUTHORITY to vote for
marked to all nominees the contrary below) listed
below.
INSTRUCTION:
To withhold authority to vote for any individual nominee,
strike
a
line through their name in the list below:
Andrew
M.
Boas, Susan W. Stuart, Susan A. Henry
2.
2007
Equity Incentive Plan: Ratification of the Equity Incentive Plan which was
recommended
by
the
Compensation Committee and adopted by the Board of
Directors on May 31, 2007.
[
]
FOR [ ]
AGAINST
[
]
ABSTAIN
3.
Appointment of Auditors: Ratification of the appointment of BDO
Seidman,
LLP
as
independent auditors for the fiscal year ending March 31, 2008.
[
]
FOR [ ]
AGAINST
[
]
ABSTAIN
4.
In
their discretion, the Proxies are authorized to vote upon such
other
business
as may properly come before the Meeting or any adjournment thereof.
The
shares represented by this Proxy will be voted as directed by the
shareholder.
IF NO CHOICES ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1,
FOR
ITEM
2 AND FOR ITEM 3.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Signature_______________________________
________________________________________
Joint
owners should each sign. Executors,
administrators,
trustees, guardians, and
corporate
officers should give their titles.
Dated:__________________________________
(PLEASE
SIGN AND RETURN PROMPTLY)