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
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Check
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[
]
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
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(Name
of
Registrant as Specified in Its Charter)
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] Check
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SENECA
FOODS CORPORATION
3736
South Main Street
Marion,
New York 14505
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE
IS
HEREBY GIVEN that the Annual Meeting (the “Meeting”) of the shareholders of
SENECA FOODS CORPORATION will be held at our offices at 418 East Conde Street,
Janesville, Wisconsin, on Friday, August 4, 2006, at 1:00 p.m., Central Daylight
Savings Time, for the following purposes:
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1.
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To
elect three directors to serve until the Annual Meeting of shareholders
in
2009 and until each of their successors is duly elected and shall
qualify.
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|
2.
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To
ratify the appointment of BDO Seidman, LLP as the Company’s independent
registered public accounting firm for the fiscal year ending March
31,
2007.
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3.
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To
transact such other business as may properly come before the Meeting
or
any adjournment thereof.
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Accompanying
this notice is a form of proxy and Proxy Statement. If you are unable to
be
present in person at the Meeting, please sign the enclosed form of proxy
and
return it in the enclosed envelope. If you attend the Meeting and vote
personally, the proxy will not be used. Only shareholders of record at the
close
of business on June 16, 2006, will be entitled to vote at the Meeting and
any
adjournment thereof. The prompt return of your proxy will save the expense
of
further communications.
A
copy of
the Annual Report for the fiscal year ended March 31, 2006, also accompanies
this Notice.
By
order
of the Board of Directors,
JEFFREY
L. VAN RIPER
Secretary
DATED: Marion,
New York
June
30, 2006
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.
PROXY
STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
SENECA
FOODS CORPORATION
_______________________________
Date
of Mailing: June 30, 2006
Annual
Meeting of Shareholders: August 4, 2006
The
enclosed proxy is solicited by the Board of Directors of Seneca Foods
Corporation (hereinafter called the “Company”).
Any
proxy given pursuant to such solicitation may be revoked by the shareholder
at
any time prior to the voting of the proxy. The signing of the form of proxy
will
not preclude the shareholder from attending the Annual Meeting (the “Meeting”)
and voting in person.
Shares represented by proxy will be voted in accordance with the directions
of
the shareholder.
The
directors of the Company know of no matters to come before the meeting other
than those set forth in this Proxy Statement. In the event any other matter
may
properly be brought before the meeting, the proxy holders will vote the proxies
in their discretion on such matter. If no choices are specified on the proxy,
the proxy will be voted FOR the proposals discussed in this Proxy
Statement.
All
of
the expenses involved in preparing and mailing this Proxy Statement and the
material enclosed herewith will be paid by the Company. The Company will
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for expenses reasonably incurred by them in sending proxy material to beneficial
owners of stock.
Only
record holders of the voting stock at the close of business on June 16, 2006
(the “Record Date”) are entitled to vote at the Meeting. On that day the
following shares were issued and outstanding: (i) 4,074,509 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”);
(v) 400,000 shares of 10% Cumulative Convertible Voting Preferred Stock -
Series
B, $0.25 stated value per share (“10% Series B Preferred Stock”); (vi) 853,500
shares of Series 2003 Preferred Stock with $0.025 par value per share; and
(vii)
3,436,809 shares of Convertible Participating Preferred Stock with $0.025
par
value per share (the “Convertible Participating Preferred Stock”). The shares of
Class B Common Stock, 10% Series A Preferred Stock, and 10% Series B Preferred
Stock are entitled to one vote per share on all matters submitted to the
Company’s shareholders. The shares of Class A Common Stock are entitled to
one-twentieth (1/20)
of one
vote per share on all matters submitted to the Company’s shareholders. The
shares of 6% Preferred Stock are entitled to one vote per share, but only
with
respect to the election of directors. The shares of Convertible Participating
Preferred Stock and Series 2003 Preferred Stock are not currently entitled
to
vote on matters submitted to shareholders (other than as required by law);
however, these shares are convertible on a share-for-share basis into shares
of
Class A Common Stock, which are entitled to one-twentieth (1/20)
of one
vote per share.
At
the
Meeting, shareholders of the Company will consider and vote upon the following
matters:
(1) To
elect
three directors to serve until the Annual Meeting of shareholders in 2009
and
until each of their successors is duly elected and shall
qualify.
(2) To
ratify
the appointment of BDO Seidman, LLP as the Company’s independent registered
public accounting firm for the fiscal year ending March 31, 2007.
(3) To
transact such other business as may properly come before the Meeting or any
adjournment thereof.
PROPOSAL
1
ELECTION
OF DIRECTORS
Under
the
By-Laws of the Company, 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 2009 and until each of their successors is duly elected
and shall qualify.
Unless
authority to vote for the election of directors is withheld or the Proxy
is
marked to the contrary as provided therein, the enclosed Proxy 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, should such a situation arise, the Proxy may be voted for the election
of
other persons as directors. Each nominee, to be elected as a director, must
receive the affirmative vote of a plurality of the votes cast at the Meeting
by
the shareholders entitled to vote thereon.
The
following table sets forth certain information with respect to the nominees
for
election as directors and directors whose terms continue beyond the
meeting:
Nominee
|
Principal
Occupation for Past Five Years
|
Age
|
Served
as
Director
Since
|
|
|
|
|
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Nominees
Standing for Election
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|
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|
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To
serve until the annual meeting of shareholders in 2009 and until
their
successors are duly elected and shall qualify:
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Arthur
H. Baer (3)
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President
of Hudson Valley Publishing since January 2003 and 1998 to 1999;
President
of Arrow Electronics Europe from 2000 to 2002; President of XYAN
Inc. from
1996 to 1998.
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59
|
1998
|
|
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Kraig
H. Kayser
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President
and Chief Executive Officer of the Company. (4)
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45
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1985
|
|
|
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Thomas
Paulson
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Chief
Financial Officer, Tennant Corporation (floor cleaning) since March,
2006;
Chief Financial Officer, Innovex, Inc. (flexible circuits) February,
2001
to March, 2006; Vice President Finance, The Pillsbury Company from
1998-2000.
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50
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2004
|
|
|
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Directors
Whose Terms Expire in 2008
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|
|
|
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Robert
T. Brady
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Chairman
and Chief Executive Officer of Moog, Inc. (manufacturer of control
systems), East Aurora, New York. (5)
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65
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1989
|
|
|
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G.
Brymer Humphreys
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President,
Humphreys Farm Inc., New Hartford, New York.
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65
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1983
|
|
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Arthur
S. Wolcott (2)
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Chairman
of the Company.
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80
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1949
|
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Directors
Whose Terms Expire in 2007
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|
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Andrew
M. Boas (3)
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General
Partner of Carl Marks Management Company, L.P. (merchant banking
firm);
President of Carl Marks Offshore Management, Inc. since 1994; Vice
President of CM Capital; Vice President of Carl Marks & Co.,
Inc.
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51
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1998
|
|
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Douglas
F. Brush
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Chairman
and Chief Business Development Officer of Sentry Group (manufacturer
of
safes), Rochester, New York.
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52
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2001
|
|
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Susan
W. Stuart (2)
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Marketing
Consultant, Fairfield, Connecticut.
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51
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1986
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-------------------------------------------
(1)
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Unless
otherwise indicated, each nominee has had the same principal occupation
for at least the past five years.
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(2)
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Susan
W. Stuart and Arthur S. Wolcott are daughter and
father.
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(3)
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Messrs.
Boas and Baer were 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 Convertible
Participating Preferred Stock).
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(4)
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Mr.
Kayser is also a director of the following publicly held company:
Moog
Inc.
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(5)
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Mr.
Brady is also a director of the following publicly held companies:
Moog
Inc., National Fuel Gas Company, Astronics Corporation and M&T Bank
Corporation.
|
OWNERSHIP
OF SECURITIES
Ownership
by Management.
The
following table sets forth certain information with respect to beneficial
ownership of the Company’s outstanding Class A Common Stock, Class B Common
Stock, 6% Preferred Stock, 10% Series A Preferred Stock, 10% Series B Preferred
Stock, and Convertible Participating Preferred Stock by each nominee and
director and by all directors, nominees and officers as a group as of April
1,
2006. (“Beneficial ownership” for these purposes is determined in accordance
with applicable Securities and Exchange Commission [“SEC”] rules and includes
shares over which a person has sole or shared voting power or investment
power):
Name
|
Title
of Class
|
Shares (1)
Beneficially
Owned
|
Percent
Of
Class
|
|
|
|
|
Arthur
H. Baer
|
Class
B Common Stock
|
3,000
|
-(3)
|
|
|
|
|
Kraig
H. Kayser
|
Class
A Common Stock (10)
|
224,658
|
5.51
|
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Class
B Common Stock (11)
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509,188
|
18.44
|
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6%
Preferred Stock (12)
|
8,000
|
4.00
|
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10%
Series A Preferred Stock (13)
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173,812
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42.68
|
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10%
Series B Preferred Stock (14)
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165,080
|
41.27
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Name
|
Title
of Class
|
Shares (1)
Beneficially
Owned
|
Percent
Of
Class
|
|
|
|
|
Andrew
M. Boas
|
Class
A Common Stock
|
70,642
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1.73%
|
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Class
B Common Stock
|
70,642
|
2.56
|
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Convertible
Participating Preferred Stock (9)
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2,355,736
|
68.54
|
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Douglas
F. Brush
|
Class
B Common Stock
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770
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-(3)
|
|
|
|
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Susan
W. Stuart
|
Class
A Common Stock (15)
|
162,502
|
3.99
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Class
B Common Stock (16)
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463,658
|
16.79
|
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6%
Preferred Stock
|
25,296
|
12.65
|
|
|
|
|
Robert
T. Brady
|
Class
A Common Stock
|
1,500
|
-(3)
|
|
|
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Thomas
Paulson
|
Class
A Common Stock
|
500
|
-(3)
|
|
|
|
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G.
Brymer Humphreys
|
Class
A Common Stock
|
800
|
-(3)
|
|
Class
B Common Stock
|
800
|
-(3)
|
|
Convertible
Participating Preferred Stock
|
400
|
-(3)
|
|
|
|
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Arthur
S. Wolcott
|
Class
A Common Stock (4)
|
138,090
|
3.39
|
|
Class
B Common Stock (5)
|
357,599
|
12.95
|
|
6%
Preferred Stock (6)
|
32,844
|
16.42
|
|
10%
Series A Preferred Stock (7)
|
212,840
|
52.26
|
|
10%
Series B Preferred Stock (8)
|
212,200
|
53.05
|
|
|
|
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Philip
G. Paras
|
Class
A Common Stock
|
1,000
|
-(3)
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Class
B Common Stock
|
1,500
|
-(3)
|
|
|
|
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All
directors, nominees and named officers as a group (17)
|
Class
A Common Stock (18)
Class
B Common Stock (19)
6%
Preferred Stock (20)
10%
Series A Preferred Stock (21)
10%
Series B Preferred Stock (22)
Convertible
Participating Preferred Stock (23)
|
447,083
728,282
66,140
386,652
377,280
2,356,136
|
10.97
26.38
33.07
94.94
94.32
68.56
|
-------------------------------------------
(1) Unless
otherwise stated, each person named in the table has sole voting and investment
power with respect to the shares indicated as beneficially owned by that
person.
No stock options are held by any of the named individuals or the group. The
holdings of Class A Common Stock and Class B 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 are currently convertible
into
Class A Common Stock and Class B Common Stock on the basis of 20 and 30
preferred shares, respectively, for each share of Common Stock. The holdings
of
Class A Common Stock do not include the shares obtainable upon conversion
of the
Convertible Participating Preferred Stock, which is currently convertible
into
shares of Class A Common Stock on a one-for-one basis.
(2)
|
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.
|
(3) Less
than
1.0%.
(4) 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 Seneca Foods Foundation (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 (including Susan W. Stuart),
or (ii) 440,547 shares held by 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. 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.
(5)
|
The
shares in the table include (i) 8,584 shares of Class B Common
Stock held
by Mr. Wolcott’s wife, (ii) 265,500 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 (including Susan W.
Stuart) or (ii) 60,192 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.
|
(6)
|
Does
not include 101,176 shares of 6% Preferred Stock held directly
by Mr. and
Mrs. Wolcott’s offspring (including Susan W. Stuart), as to which Mr.
Wolcott disclaims beneficial
ownership.
|
(7)
|
These
shares are convertible into 10,642 shares of Class A Common Stock
and
10,642 shares of Class B Common
Stock.
|
(8)
|
These
shares are convertible into 7,073 shares of Class A Common Stock
and 7,073
shares of Class B Common Stock.
|
(9) These
shares are convertible on a share-for-share basis into 2,355,736 shares of
Class
A Common Stock. Includes 2,355,736 shares of Convertible Participating Preferred
Stock owned by Investors, as to which Mr. Boas disclaims beneficial ownership.
Does not include 251,520 shares of Convertible Participating Preferred Stock
owned by Nancy A. Marks which are related to the Investors via common ownership
in certain entities and family relationships and which sometimes are
collectively referred to as the “Related Marks Shareholders”. Mr. Boas disclaims
beneficial ownership of the stock owned by the Related Marks
Shareholders.
(10) 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.
Robert
Oppenheimer of Rochester, New York is the other co-trustee of the trusts.
The
shares reported in the table include 76,936 shares held by 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) 440,547 shares held by 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.
(11)
|
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. Robert Oppenheimer of Rochester, New
York is the
other co-trustee of the trusts. The shares in the table include
(i)
265,500 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) 60,192 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.
|
(12)
|
Does
not include 27,536 shares of 6% Preferred Stock held by Mr. Kayser’s
brother, as to which Mr. Kayser disclaims beneficial ownership.
See also
the table in “Principal Owners of Voting
Stock”.
|
(13) Mr.
Kayser has shared voting and investment power with respect to 141,644 shares
of
10% Series A Preferred Stock held in two trusts described in notes 10 and
11
above. 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.
(14) Mr.
Kayser has shared voting and investment power with respect to 165,080 shares
of
10% Series B Preferred Stock held in two trusts described in notes 10 and
11
above. 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.
(15)
|
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 trustee. 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.
|
(16) 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) 265,500 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.
(17) Does
not
include 496,446 shares of Class A Common Stock or 460,446 shares of Class
B
Common Stock owned by the Related Marks Shareholders, as to which Andrew
Boas
disclaims beneficial ownership. See note 9 above.
(18)
|
See
notes 2, 4, 7, 8, 9, 10, 15 and 17 above.
|
(19)
|
See
notes 2, 5, 7, 8, 11, 13 and 16
above.
|
(20)
|
See
notes 6 and 12 above.
|
(21)
|
See
notes 7 and 13 above.
|
(22) See
notes
8 and 14 above.
(23) See
note
9 above.
Principal
Owners of Voting Stock.
The
following table sets forth, as of April 1, 2006, certain information with
respect to persons known by the Company to be the beneficial owners of more
than
five percent of the classes of stock. (“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 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. The holdings of Class
A
Common Stock listed in the table do not include the shares obtainable upon
conversion of the Series 2003 Preferred Stock or the Convertible Participating
Preferred Stock, which are convertible into Class A Common Stock on a
one-for-one basis.
|
|
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
|
|
|
|
|
|
|
6%
Preferred Stock
|
Arthur
S. Wolcott (1)
|
32,844
|
—
|
32,844
|
16.42%
|
|
|
|
|
|
|
|
Kurt
C. Kayser
Bradenton,
Florida
|
27,536(2)
|
—
|
27,536
|
13.77
|
|
|
|
|
|
|
|
Susan
W. Stuart
Fairfield,
Connecticut
|
25,296(3)
|
—
|
25,296
|
12.65
|
|
|
|
|
|
|
|
Bruce
S. Wolcott
Canandaigua,
New York
|
25,296(3)
|
—
|
25,296
|
12.65
|
|
|
|
|
|
|
|
Grace
W. Wadell
Wayne,
Pennsylvania
|
25,292(3
|
—
|
25,292
|
12.65
|
|
|
|
|
|
|
|
Mark
S. Wolcott
Pittsford,
New York
|
25,292(3)
|
—
|
25,292
|
12.65
|
|
|
|
|
|
|
|
L.
Jerome Wolcott, Jr.
Costa
Mesa, California
|
15,222
|
—
|
15,222
|
7.61
|
|
|
|
|
|
|
|
Peter
J. Wolcott
Bridgewater,
Connecticut
|
15,222(3)
|
—
|
15,222
|
7.61
|
|
|
|
|
|
|
10%
Series A
Preferred
Stock
|
Arthur
S. Wolcott
|
212,840(4)
|
—
|
212,840
|
52.26
|
|
Kraig
H. Kayser (5)
|
32,168
|
141,644 (6)
|
173,812
|
42.68
|
|
|
|
|
|
|
|
Hannelore
Wolcott-Bailey
Penn
Yan, New York
|
20,588
|
—
|
20,588
|
5.06
|
|
|
|
|
|
|
10%
Series B
Preferred
Stock
|
Arthur
S. Wolcott
|
212,200(7
|
—
|
212,200
|
53.05
|
|
Kraig
H. Kayser (5)
|
—
|
165,080(8)
|
165,080
|
41.27
|
|
|
|
|
|
|
|
Hannelore
Wolcott-Bailey
|
22,720
|
—
|
22,720
|
5.68
|
|
|
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
|
|
|
|
|
|
|
Class
A Common Stock(9)
|
Nancy
A. Marks (10)
Great
Neck, New York
|
217,892
|
232,912(11)
|
450,804
|
11.06%
|
|
|
|
|
|
|
|
The
Pillsbury Company (12)
General
Mills, Inc. Minneapolis, Minnesota
|
—
|
346,570
|
346,570
|
8.51
|
|
|
|
|
|
|
|
T.
Rowe Price
Associates,
Inc.
(17)
Baltimore,
Maryland
|
281,300
|
—
|
281,300
|
6.90
|
|
|
|
|
|
|
|
Franklin
Advisory Services, LLC (16)
San
Mateo, California
|
256,600
|
—
|
256,600
|
6.30
|
|
|
|
|
|
|
|
Susan
W. Stuart
|
57,214
|
105,288
|
162,502
|
3.99
|
|
|
|
|
|
|
|
Kraig
H. Kayser (13)
|
66,528
|
158,130
|
224,658
|
5.51
|
|
|
|
|
|
|
|
Arthur
S. Wolcott (14)
|
31,623
|
106,467
|
138,090
|
3.39
|
|
|
|
|
|
|
Class
B Common Stock(9)
|
Susan
W. Stuart
|
63,492
|
400,166(20)
|
463,658
|
16.79
|
|
|
|
|
|
|
|
Kraig
H. Kayser
|
82,770
|
426,418(8)
|
509,188
|
18.44
|
|
|
|
|
|
|
|
Nancy
A. Marks
(10)
|
318,412
|
96,392
|
414,804
|
15.02
|
|
|
|
|
|
|
|
Arthur
S. Wolcott
|
8,551
|
349,008(19)
|
357,599
|
12.95
|
|
|
|
|
|
|
|
T.
Rowe Price
Associates,
Inc.
(17)
Baltimore,
Maryland
|
114,900
|
—
|
114,900
|
4.16
|
|
|
|
|
|
|
Convertible
Participating
Preferred
Stock (21)
|
Carl
Marks Strategic Investments, LP
New
York, New York
|
2,325,736
|
—
|
2,325,736
|
67.67
|
|
|
|
|
|
|
)
|
Carl
Marks Strategic Investments, LP
New
York, New York
|
30,000
|
—
|
30,000
|
0.87
|
|
|
|
|
|
|
|
Franklin
Advisory Services, LLC (16)
San
Mateo, California
|
300,000
|
—
|
300,000
|
8.73
|
|
|
|
|
|
|
|
Nancy
A. Marks (10)
Great
Neck, New York
|
145,000
|
106,520
|
251,520
|
7.32
|
-------------------------------------------
(1)
|
Business
address: Suite 1010, 1605 Main Street, Sarasota, Florida
34236.
|
(2)
|
These
shares are included in the shares described in note 13 to the table
under
the heading “Ownership by
Management”.
|
(3)
|
These
shares are included in the shares described in note 6 to the table
under
the heading “Ownership by
Management”.
|
(4)
|
See
note 7 to the table under the heading “Ownership by
Management”.
|
(5)
|
Business
address: 3736 South Main Street, Marion, New York
14505.
|
(6)
|
See
note 14 to the table under the heading “Ownership by
Management”.
|
(7)
|
See
note 8 to the table under the heading “Ownership by
Management”.
|
(8)
|
See
note 15 to the table under the heading “Ownership by
Management”.
|
(9)
|
Does
not include 2,325,736 shares of Convertible Participating Preferred
Stock
held by the Investors, which are convertible on a share-for-share
basis
into 2,325,736 shares of Class A Common Stock. Does not include
251,520
shares of Convertible Participating Preferred Stock held by the
Related
Marks Shareholders, which are convertible into 251,520 shares of
Class A
Common Stock. See notes 12, 13, and 21 below. See also notes 9
and 18 to
the table under the heading “Ownership by
Management.”
|
(10)
|
Based
on a statement on Schedule 13D filed by Edwin S. Marks with the
SEC (as
most recently amended in July 1998) and Form 4 filed with the SEC
by Edwin
S. Marks for March 2000.
|
(11)
|
Nancy
A. Marks shares voting and dispositive power with respect to 232,912
of
these shares with her daughters. She disclaims beneficial ownership
of
these shares.
|
(12) Based
on
a statement on Schedule 13D filed by The Pillsbury Company (now a subsidiary
of
General Mills, Inc.) and Grand Metropolitan with the SEC in March
1996.
(13)
|
See
note 11 to the table under the heading “Ownership by
Management”.
|
(14)
|
See
note 4 to the table under the heading “Ownership by
Management”.
|
(15) See
note
16 to the table under the heading “Ownership by Management”.
(16)
|
Based
on a statement on Schedule 13G filed with the SEC February 2006,
by
Franklin Advisory Services, Inc.
|
(17)
|
These
securities are owned by various individual and institutional investors,
which T. Rowe Price Associates, Inc. (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
Securities Exchange Act of 1934, 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.
|
(18)
|
See
note 12 to the table under the heading “—Ownership by
Management.”
|
(19) See
note
5 to the table under the heading “—Ownership by Management.”
(20) See
note
17 to the table under the heading “—Ownership by Management.”
(21) The
shares of Convertible Participating Preferred Stock are not currently entitled
to vote on matters submitted to shareholders (other than as required by law);
however, these shares are convertible on a one-for-one basis into shares
of
Class A Common Stock, which are entitled to one-twentieth (1/20)
of one
vote per share.
Independence
The
Board
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 Stock Market. No director has any
material relationship with the Company other than those described in “Certain
Transactions and Related Relationships” below.
Information
Concerning Operation Of The Board of Directors
In
order
to facilitate the handling of various functions of the Board of Directors,
the
Board has appointed several committees including an Audit Committee, a
Compensation Committee and a Corporate Governance and Nominating
Committee.
The
members of the Audit Committee are Arthur H. Baer (Chairman), Robert T. Brady,
Douglas F. Brush, G. Brymer Humphreys and Thomas Paulson. The text of the
charter of the Audit Committee is available on the Company’s website
(www.senecafoods.com). 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. 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.
All members of the Audit Committee are independent.
The
Corporate Governance and Nominating Committee consists of Thomas Paulson,
Robert
T. Brady, G. Brymer Humphreys and Andrew M. Boas (Chairman). Each Committee
member is independent under the NASDAQ listing standards. The text of the
charter of the Corporate Governance and Nominating Committee is available
on the
Company's website (www.senecafoods.com). The Committee screens and selects
nominees for vacancies in the Board of Directors as they occur. Consideration
will be given to serious candidates for director who are recommended by
shareholders of the Company. 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.
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.
The
Compensation Committee consists of Douglas F. Brush (Chairman), G. Brymer
Humphreys and Andrew M. Boas. The Compensation Committee establishes the
level
of compensation on an annual basis for all executive officers.
During
the fiscal year ended March 31, 2006, the Board of Directors had four meetings,
the Audit Committee had five meetings, and the Compensation Committee had
two
meetings. All directors who served during the entire fiscal year attended
at
least 75% of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings held by any committee of the Board
on
which he or she served. In addition, each director is expected to attend
the
Annual Meeting of shareholders. In 2005, the Annual Meeting of shareholders
was
attended by all nine of the 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.
Certain
Relationships and Related Transactions
The
Company operates under a contract pursuant to which Birds Eye Foods supplies
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 (1%
in
fiscal year 2006) of vegetables supplied to Seneca Foods 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.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 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.
EXECUTIVE
OFFICERS
The
following is a listing of the Company’s executive officers:
Officer
|
Principal
Occupation for Past Five Years
|
Age
|
Served
as
Officer
Since
|
|
|
|
|
Arthur
S. Wolcott
|
Chairman
of the Company.
|
80
|
1949
|
|
|
|
|
Kraig
H. Kayser
|
President
and Chief Executive Officer of the Company.
|
45
|
1991
|
|
|
|
|
Paul
L. Palmby
|
Chief
Operating Officer of the Company since 2006;
President
Vegetable Division of the Company 2005;
Vice
President Operations of the Company 1999-2004
|
44
|
2006
|
|
|
|
|
Carl
A. Cichetti
|
Chief
Information Officer of the Company since 2006; Senior Consultant
of Navint
(Technology Consulting) 2004-2005; Senior Vice President Technology
of
Citigroup 2001-2004.
|
48
|
2006
|
|
|
|
|
Dean
E. Erstad
|
Senior
Vice President Sales of the Company since 2001.
|
43
|
2006
|
|
|
|
|
John
D. Exner
|
General
Counsel of the Company since 2006, Legal Counsel/President of Midwest
Food
Processor Association 1991-2005.
|
44
|
2006
|
|
|
|
|
Philip
G. Paras
|
Chief
Financial Officer of the Company.
|
45
|
1996
|
|
|
|
|
Jeffrey
L. Van Riper
|
Secretary
and Controller of the Company.
|
49
|
1986
|
|
|
|
|
Sarah
S. Mortensen
|
Assistant
Secretary of the Company.
|
61
|
1986
|
-------------------------------------------
(1)
|
Unless
otherwise indicated, each officer has had the same principal occupation
for at least the past five years.
|
EXECUTIVE
COMPENSATION
The
following table sets forth the compensation paid by the Company to the Chief
Executive Officer and to the four most highly compensated executive officers
whose compensation exceeded $100,000 (the “Named Officers”) for services
rendered in all capacities to the Company and its subsidiaries during the
fiscal
years ended March 31, 2006, 2005 and 2004.
Name
of Individual and
|
|
Annual Compensation
|
Total
|
Principal
Position
|
Fiscal
Year
|
Salary
|
Bonus
|
Compensation
|
|
|
|
|
|
Arthur
S. Wolcott
Chairman
and Director
|
2006
2005
2004
|
$416,088
415,078
402,989
|
$104,022
-
50,595
|
$520,110
415,078
453,584
|
|
|
|
|
|
Kraig
H. Kayser
President,
Chief Executive
Officer
and Director
|
2006
2005
2004
|
$415,992
409,743
340,170
|
$103,999
-
51,150
|
$519,990
409,743
391,320
|
|
|
|
|
|
Paul
L. Palmby
Chief
Operating Officer
|
2006
(1) 2005
(1) 2004
|
$184,950
-
-
|
$46,350
-
-
|
$231,300
-
-
|
|
|
|
|
|
Carl
A. Cichetti
Chief
Information Officer
|
2006
(1) 2005
(1) 2004
|
$135,519
-
-
|
$33,750
-
-
|
$169,269
-
-
|
|
|
|
|
|
Dean
E. Erstad
Senior
Vice President Sales
|
2006
(1) 2005
(1) 2004
|
$129,600
-
-
|
$33,750
-
-
|
$163,350
-
-
|
|
|
|
|
|
(1)
|
Began
serving as an executive officer during
2006.
|
Pension
Benefits
The
executive officers of the Company are entitled to participate in the Pension
Plan (referred to in this section as the “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
the Plan’s 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.
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. 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. Pursuant
to
changes required by the Tax Reform Act of 1986 the Company amended the Plan
to
cease further accruals under the Offset Formula as of July 31, 1989.
Participants who were eligible to receive a benefit under the Offset Formula
will 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
maximum permitted annual retirement income under either formula is
$160,000.
The
following table sets forth estimated annual retirement benefits payable at
age
65 for participants in certain compensation and years of service classifications
using the highest number obtainable under both formulas:
|
|
|
|
|
|
|
Five
Highest
|
|
|
|
|
|
|
Consecutive
|
|
ANNUAL
BENEFITS
|
Years
|
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
15
Year
|
20
Years
|
25
Years
|
30
Years
|
35
Years
|
|
|
|
|
|
|
|
|
|
|
$
90,000
|
|
|
|
|
$
11,900
|
$
15,800
|
$
19,700
|
$
23,700
|
$
27,600
|
120,000
|
|
|
|
|
17,300
|
23,000
|
28,700
|
34,500
|
40,200
|
150,000
|
|
|
|
|
22,300
|
30,200
|
37,700
|
45,300
|
53,800
|
180,000
|
|
|
28,600
|
37,400
|
46,700
|
56,100
|
65,400
|
Under
the
Plan, Arthur S. Wolcott, Kraig H. Kayser, Paul L. Palmby and Dean E. Erstad
have
57 years, 14 years, 19 years and 11 years of credited service, respectively.
Their compensation during fiscal 2006 covered by the Plan is listed as salary
in
the Executive Compensation table. The Internal Revenue Code limits the amount
of
compensation that can be taken into account in calculating retirement benefits
(for 2006 the limit is $220,000).
Directors’
Fees
Directors
who are also executive officers of the Company are not separately compensated
for their services as directors. Directors who are not executive officers
receive a fee in the amount of $1,500 per month. Effective July 1, 2006,
directors fees increase to $1,750 per month.
Equity
Compensation Plans
No
options were granted or exercised in the period from April 1, 2005, to the
date
of this Proxy Statement, nor were any unexpired options held at the latter
date
by any officer or director of the Company. The Company has no equity
compensation plans or individual compensation arrangements under which equity
securities of the Company are authorized for issuance to employees or directors,
therefore, no table is necessary as described in Item 201(d) of Regulation
S-K.
Profit
Sharing Bonus Plan
The
Company has a Profit Sharing Bonus Plan for certain eligible employees of
the
Company (“Corporate Profit Sharing” for the officers and certain key Corporate
employees and “Operating Unit Profit Sharing” for certain key Operating Unit
employees). Under Corporate Profit Sharing, some or all of the Corporate
Profit
Sharing Pool (10% of the Corporate Bogey as defined below) will be paid only
if
Pre-Tax Profits (as defined) equal or exceed the Corporate Bogey. The bonuses
will be distributed at the sole discretion of the Chief Executive Officer
upon
approval of such bonuses by the Compensation Committee of the Board of
Directors. Under the Operating Unit Profit Sharing, the Operating Unit Profit
Sharing pool (10% of Pre-Tax Profit less the Operating Unit Bogey as defined
below) will be paid only if the Pre-Tax Profit of the Operating Unit equals
or
exceeds the Operating Unit Bogey. The bonuses will be distributed at the
discretion of the Operating Unit President. For fiscal 2006 the Corporate
Bogey
will be equal to the greater of (i) five percent of the prior year’s
Consolidated Net Worth of the Company plus the Pillsbury Subordinated Note
or
(ii) five percent plus the annual increase in the Consumer Price Index greater
than five percent, times the prior year’s Consolidated Net Worth of the Company.
The Operating Unit Bogey will be an amount equal to the average gross assets
employed by the Snack or Flight Operations for the preceding 12 months divided
by the consolidated average gross assets of the Company for the same period
multiplied by the Corporate Bogey. A total of $387,660, none and $140,526
of
bonuses related to the Corporate Plan were earned by officers in 2006, 2005
and
2004, respectively.
Compensation
Committee Interlocks and Insider Participation
There
were no Compensation Committee interlocks during the past fiscal
year.
Compensation
Committee Report On Executive Compensation
This
Report is not soliciting material, is not deemed filed with the SEC and is
not
to be incorporated by reference in any filing of the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as
amended, whether made before or after the date hereof and irrespective of
any
general incorporation language in any such filing.
The
Compensation Committee is responsible for providing overall guidance with
respect to the Company’s executive compensation programs. The goal of the
Compensation Committee is to maintain a competitive compensation program
in
order to attract and retain well qualified management, to provide management
with the incentive to accomplish the Company’s financial and operating
objectives and to link the interest of the Company’s executive officers and
management to the interests of its stockholders through bonuses tied to
financial performance. The Compensation Committee is composed of three members
and meets annually to review the Company’s compensation programs, including
executive salary administration and the profit sharing plan.
The
Compensation Committee believes that the Company’s executives should be rewarded
for their contributions to the Company’s attaining annual financial goals, as
set forth in the annual budget, which is subject to revision during the year,
and their attaining annual individual objectives. The Company pays its executive
officers two principal types of compensation: base salary and Corporate Profit
Sharing plan, each of which is more fully described below.
Base
Salary
- The
Company has historically established the base salary of its executive officers
on the basis of each executive officer’s scope of responsibility, experience,
individual performance and accountability within the Company. In that regard
the
Company reviews comparable salary and other compensation arrangements in
similar
businesses and companies of similar size to determine appropriate levels
necessary to attract and retain top quality management.
Profit
Sharing Plan
- To
further align the interests of executive officers with those of the Company’s
shareholders, a significant component of an executive officer’s total
compensation arrangement is participation in the annual profit sharing plan.
An
executive is rewarded with a cash bonus equal to a percentage of the executive’s
base salary if the Pre-Tax Profit of the Company for that year equals or
exceeds
the Corporate Bogey (see “--Profit Sharing Bonus Plan”).
CEO
Compensation
- The
general policies described above for the compensation of executive officers
also
apply to the compensation level approved by the Compensation Committee with
respect to the 2006 compensation for the Chief Executive Officer. The
Compensation Committee recognized Mr. Kayser’s leadership role during fiscal
year 2006 in guiding the overall performance of the Company towards its desired
strategic direction and record earnings performance. Based upon all relevant
factors, the Compensation Committee believes that Mr. Kayser’s compensation is
reasonable.
Summary
The
Compensation Committee is committed to attracting, motivating and retaining
executives who will help the Company meet the increasing challenges of the
food
processing industry. The Compensation Committee recognizes its responsibility
to
the Company’s shareholders and intends to continue to establish and implement
compensation policies that are consistent with competitive practice and are
based on the Company’s and the executives’ performance.
This
report has been submitted by the Compensation Committee of the Company’s Board
of Directors:
Douglas
F. Brush G.
Brymer
Humphreys Andrew
M.
Boas
Audit
Committee
The
Audit
Committee's Report for 2006 follows:
Audit
Committee's Report
This
Report is not soliciting material, is not deemed filed with the SEC and is
not
to be incorporated by reference in any filing of the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as
amended, whether made before or after the date hereof and irrespective of
any
general incorporation language in any such filing.
The
Audit
Committee of the Board of Directors, comprised of five independent directors,
held four meetings during 2006. The Audit Committee operates under a written
charter approved by the Board of Directors.
The
Audit
Committee met with the independent public accountants and management to assure
that all were carrying out their respective responsibilities. The Committee
reviewed the performance of the independent public accountants prior to
recommending their appointment, and met with them to discuss the scope and
results of their audit work, including the adequacy of internal controls
and the
quality of financial reporting. The Committee discussed with the independent
public accountants their judgments regarding the quality and acceptability
of
the Company's accounting principles, the clarity of its disclosures and the
degree of aggressiveness or conservatism of its accounting principles and
underlying estimates. The Committee discussed with and received a letter
from
the independent public accountants confirming their independence. The
independent public accountants had full access to the Committee, including
regular meetings without management present. Additionally, the Committee
reviewed and discussed the audited financial statements with management and
recommended to the Board of Directors that these financial statements be
included in the Company's Form 10-K filing with the Securities and Exchange
Commission.
Audit
Committee
Arthur
H.
Baer
Chairman
G.
Brymer Humphreys
|
Douglas
F. Brush
|
|
|
Robert
T. Brady
|
Thomas
Paulson
|
INDEPENDENT
PUBLIC ACCOUNTANTS
BDO
Seidman, LLP has served as the Company’s independent accounting firm since
December 8, 2005. On such date, the Company terminated Ernst & Young LLP
from serving as its independent public accounting firm. It is anticipated
that
representatives of BDO Seidman, LLP will be present at the annual meeting
with
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
Principal
Accountant Fees and Services
Fees
for
all services provided by BDO Seidman, LLP and Ernst & Young LLP for fiscal
years 2006 and 2005 are as follows:
|
2006
|
2005
|
Audit
Fees (1) |
|
|
-Audit
of consolidated financial statements (3) |
$257,038
|
$169,728
|
-
Audit
of internal control over financial reporting (3) |
455,107
|
1,042,880
|
-
Timely quarterly reviews |
45,000
|
36,000
|
Total
Audit Fees |
$757,145 |
$1,248,608 |
Audit-Related
Fees (2)
|
-
|
54,300
|
Tax
Fees (4)
|
20,000
|
-
|
All
Other Fees
|
-
|
-
|
TOTAL
|
$777,145
|
$1,302,905
|
(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 2006 audit fees included $232,582
of Ernst
& Young LLP related fees.
|
(2)
|
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 SEC filings, including comfort letters, consents, and
comment
letters (4 filings in 2005).
|
(3)
|
Includes
fees and expenses billed through June 14,
2006.
|
(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,
LLP in 2006 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 two most recent fiscal years 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:
|
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.
Common
Stock Performance Graph
The
following graph shows the cumulative, five-year total return for the Company’s
Common Stock compared with the NASDAQ Market Index (which includes the Company)
and a peer group of companies (described below).
Performance
data assumes that $100.00 was invested on March 31, 2001, in the Company’s Class
B Common Stock, the NASDAQ Market, and the peer group. The data assumes the
reinvestment of all cash dividends and the cash value of other distributions.
Stock price performance shown in the graph is not necessarily indicative
of
future stock price performance.
The
companies in the peer group presented in the graph above are H.J. Heinz Company,
DelMonte Company, Hanover Foods, and Hain Celestial Group, Inc.
PROPOSAL
2
RATIFICATION
OF SELECTION OF AUDITORS
The
Audit
Committee of the Board of Directors currently proposes to renew the appointment
of BDO Seidman, LLP as the Company's independent registered public accounting
firm for the fiscal year ending March 31, 2007. BDO Seidman, LLP has audited
the
Company's financial statements during the last fiscal year, having been engaged
since December 8, 2005.
Management
recommends a vote FOR its proposal to ratify the appointment of BDO Seidman,
LLP
as the Company's independent registered public accounting firm for the fiscal
year ending March 31, 2007. Unless marked otherwise, proxies will be voted
FOR
this purpose.
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.
*
* * * *
BROKER
NON-VOTES AND ABSTENTIONS
Broker
non-votes will not be treated as votes cast or shares entitled to vote on
matters as to which the applicable rules of national securities exchanges
withhold the broker’s authority to vote in the absence of direction from the
beneficial owner.
VOTING
OF PROXIES
The
shares represented by all valid proxies received will be voted in the manner
specified on the proxies. Where specific choices (including abstentions)
are not
indicated, the shares represented by all valid proxies received will be voted
FOR
the
nominees for director named earlier in this Proxy Statement and FOR
approval
of Proposal 2 as described earlier in this Proxy Statement.
Should
any matter not described above be acted upon at the meeting, the persons
named
in the proxy will vote in accordance with their judgment. The Board knows
of no
other matters, which may be presented to the meeting.
SHAREHOLDER
PROPOSALS FOR THE 2007 ANNUAL MEETING
Shareholder
proposals must be received at the Company’s offices no later than March 3, 2007,
in order to be considered for inclusion in the Company’s proxy materials for the
2007 Annual Meeting.
If
a
shareholder wishes to present a proposal at the Company's 2007 Annual Meeting
of
Shareholders or to nominate one or more directors, and the proposal is not
intended to be included in the Company's proxy materials relating to that
meeting, such proposal or nomination(s) must be received at the Company's
offices by May 17, 2007.
MISCELLANEOUS
To
assure
a quorum at the annual meeting (the holders of a majority of the stock entitled
to vote thereat constitute a quorum), shareholders are requested to sign
and
return promptly the enclosed form of proxy in the envelope provided. A
shareholder who has delivered a proxy may attend the meeting and, if he or
she
desires, vote in person at the meeting.
By
order
of the Board of Directors,
JEFFREY
L. VAN RIPER
Secretary
DATED: Marion,
New York
June
30,
2006
SENECA
FOODS CORPORATION
3736
South Main Street
Marion,
NY 14505
PROXY
FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 4, 2006
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 418 East Conde Street,
Janesville,
Wisconsin, on Friday, August 4, 2006, at 1:00 p.m., Central
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 AND FOR ITEM 2.
1.
Election of Directors: Election three nominees to serve until the
annual
meeting
of shareholders in 2009 and until their successors are duly elected
and
shall
qualify:
[
]
OR 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 his name in the list below:
Arthur
H.
Baer, Kraig H. Kayser, Thomas Paulson
2.
Appointment of Auditors: Ratification of the appointment of BDO
Seidman,
LLP
as
independent auditors for the fiscal year ending March 31, 2007.
[
]
FOR [ ]
AGAINST
[
]
ABSTAIN
3.
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
AND
FOR
ITEM 2.
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)