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NAME: Steven J. Ellcessor AGE: 49 TITLE: Chief financial officer; in that capacity, he oversees the legal department. COMPANY: The J.M. Smucker Co. in Orville, Ohio, began in 1897 when Jerome Monroe Smucker opened an apple cider mill. With the excess cider, he made apple butter using a family recipe. By 1900, Smucker and his son expanded the business, selling apple butter from the back of a wagon. The company, still a family-run business, went public in 1959. Today, Smucker’s is a North American market leader in jams, jellies and preserves, ice cream toppings, health and natural food beverages and natural peanut butter. In October, the company announced an agreement to merge Procter & Gamble Co.’s Jif peanut butter and Crisco cooking oil businesses into Smucker’s in an all-stock deal valued at $1 billion. Smucker’s says the combination will help the company pursue new product development and acquisition opportunities. The deal is expected to more than double Smucker’s sales to $1.3 billion and more than triple earnings to as high as $105 million. The work force will rise to 2,700. Completion of the merger is contingent on P&G receiving certain tax rulings from the Internal Revenue Service. DEPARTMENT: On April 19, Ellcessor was named CFO and relinquished his title of general counsel. This was “sort of a recognition of what my responsibilities have shifted to,” said Ellcessor, explaining that this was part of a reorganization in anticipation of the P&G deal being finalized. Ann Harlan, Ellcessor’s sole deputy, was promoted to general counsel. Ellcessor says his job will not change radically as he will continue to oversee the legal department and he already had been heavily involved in Smucker’s business dealings. Besides legal, Ellcessor’s management duties will continue to include finance and treasury, human resources, government and regulatory affairs and management and business process development. In each case, a manager handles the day-to-day affairs and reports to Ellcessor. About a quarter of Ellcessor’s time has been and will continue to be spent on legal matters, with Harlan overseeing the daily management of the legal department, he said. Most of the department’s work involves matters directly related to the business, such as software licensing, equipment leases, promotional agreements and contracts with suppliers. The department handles contracts with growers of fruit and other suppliers of raw materials, including sugar and corn sweeteners. It also negotiates contracts with customers — food wholesalers, retailers, club stores, restaurants and institutional food service distributors. Smucker’s doesn’t contract directly with peanut growers, but does work through entities called “shellers.” The company is regulated by the U.S. Food and Drug Administration, which means all the products must meet federal labeling requirements. LITIGATION: The company doesn’t have much litigation and, for a food company, has been fortunate not to have had major products liability cases, Ellcessor said. The company is involved in a patent dispute involving its crustless peanut butter and jelly sandwich called “Uncrustables.” Albie’s Foods, a Michigan food manufacturer, began making a crust-free PB&J sandwich in 2000. After Smucker’s told the company it was in violation of its patent, Albie’s Foods filed suit in Michigan, asking the federal court to declare the patent invalid. Soon after, Smucker’s filed a patent infringement case in Ohio. The Michigan case was dismissed in November because Albie’s mistakenly sued Smucker’s subsidiary, Menusaver, which originally held the patent. The Ohio court will decide the issue. Smucker’s occasionally has employment law issues, Ellcessor said. Roughly half of the employees are members of the International Brotherhood of Teamsters. Members of the legal department do not sit at the bargaining table, Ellcessor said. Instead, the department advises human resources and relies on outside labor counsel. Most of the department’s time is spent on compliance matters, which includes making sure the staff understands the law pertaining to harassment and discrimination and the appropriate company policies. The programs are less formal than they might be at a larger company, he said. “Our goal as a legal department is to spend as much of our time as we can on counseling and preventative measures,” he said. “We try to avoid litigation and we’ve been generally successful.” ACQUISITIONS: In recent months, Ellcessor has spent most of his time working on the merger of the Jif and Crisco businesses, the company’s biggest acquisition ever. “It’s transformational for us,” said Ellcessor. “I would say the company is going to change significantly.” The transaction, being done through a “revised Morris Trust,” will allow the Jif and Crisco assets to be merged into Smucker’s without P&G or its shareholders having to pay taxes. Under the deal, P&G shareholders will receive one share of Smucker’s stock for every 50 shares they own of P&G. Ellcessor helped structure and analyze the transaction. He also helped conduct due diligence, negotiate the agreement and prepare the filings for the Securities and Exchange Commission. Mergers and acquisitions has been a big part of Smucker’s business, with the company taking over jelly and jam businesses beginning in 1963. Ellcessor estimates he’s been involved in 15 to 20 acquisitions during his 16 years with the company. One was an $80 million purchase of Mrs. Smith’s frozen pie business in 1994. Smucker’s sold the business less than a year later. ENRON FALLOUT: Ellcessor said he and every corporate legal and financial officer have to be cognizant of the issues raised by the Enron/Arthur Andersen debacle. “We will certainly review everything we do with an eye toward the developments coming out of Enron,” he said. Smucker’s has used Ernst & Young as its accounting firm since the early 1950s. “We’ve always taken a fairly conservative approach to our accounting methods and reporting,” he said. “We haven’t done off-sheet financing or special-purpose entities. Our business and finances are fairly straightforward. And we feel like we have always tried to maintain not only good accounting practices, but good corporate governance,” he said. Ellcessor said the company also has a strong audit committee that stays very well informed. OUTSIDE COUNSEL: Jones, Day, Reavis & Pogue handles M&A, including the Jif-Crisco deal and securities and antitrust matters. Akron, Ohio’s Buckingham, Doolittle & Burroughs handles contractual matters. Washington, D.C.’s Beveridge & Diamond handles environmental issues. ROUTE TO THE TOP: Born in Columbus, Ohio, Ellcessor earned a bachelor’s in history from Miami University in Oxford, Ohio, and a law degree from Harvard in 1977. Ellcessor went into private practice at Frost & Jacobs in Cincinnati before joining Smucker’s in 1986 as general counsel. FAMILY: Ellcessor and his wife, Brenda, have a daughter, Elizabeth, a high school sophomore, and a son, Matthew, a senior. LAST BOOK READ: “Rembrandt’s Eyes,” by Simon Schama.

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