SUPPLEMENT DATED SEPTEMBER 24, 1996 TO THE
PROSPECTUS DATED OCTOBER 24, 1995
In January 1993, certain Alabama member patrons of the
Association filed a lawsuit in the Circuit Court of Jefferson
County, Alabama, Tenth Judicial Circuit, against the
Association and Golden Poultry and certain directors and
officers of the companies. (Ronald Pete Windham and Windham
Enterprises, Inc. on their behalf and on behalf of and for the
use and benefit of Gold Kist, Inc. and its
shareholders/members v. Harold O. Chitwood, individually in
his capacity as an officer of Gold Kist and a Director of
Golden Poultry; et al). The lawsuit alleged that the named
defendants violated their fiduciary duties by diverting
corporate opportunities from the Association to Golden Poultry
and Carolina Golden Products Company in connection with the
creation of Golden Poultry and Carolina Golden Products
Company and by permitting their continued operations. In
March 1994, the Court certified the Windham litigation as a
class action. In September 1995, Golden Poultry and Carolina
Golden Products Company were dismissed from the litigation.
On October 25, 1995, the jury in the Windham case returned
verdicts in favor of the plaintiffs in the litigation. On
July 2, 1996, the Jefferson County, Alabama Circuit Court
Judge entered a memorandum opinion and non-final judgment in
the case directing Gold Kist to acquire the approximately 27%
of Golden Poultry shares currently owned by investors so that
all of the issued and outstanding stock of Golden Poultry
becomes owned by Gold Kist or a wholly owned subsidiary,
either through a merger or a tender offer for the minority
shares of Golden Poultry stock outstanding. The Court denied
the plaintiffs' demands for additional allocations and cash
distributions to the class members. Upon motions for
reconsideration filed by both parties to the action, the
Court modified its memorandum opinion in a Final Judgment and
Decree entered upon September 13, 1996, under which Gold Kist
was relieved of the Court's requirement to acquire all of the
shares of Golden Poultry common stock not owned
by Gold Kist and was directed to acquire only that Golden
Poultry stock held by any current officers or directors of
Gold Kist and their spouses and minor children. The Court
also ordered Gold Kist to cause the surrender of all Golden
Poultry stock options held by Gold Kist officers and directors
or the exercise of such options and purchase by Gold Kist of
the resultant stock, to redeem from eligible members
approximately $21.2 million of notified equity of Gold Kist,
to pay $4.2 million in attorney's fees to the plaintiffs
attorneys and to establish a policy prohibiting officers
and directors of Gold Kist from future ownership of Golden
Poultry stock. An appeal of the Final Judgment may be filed
on or before October 25, 1996, and could have the effect of
staying the Final Judgment pending the outcome of any appeal.
[7123/S-1-A-1]
