<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15d of the
Securities and Exchange Act of 1934
---------------------------
Date of Report (Date of earliest
event reported) August 29, 1994
WLR Foods, Inc.
(Exact name of registrant as specified in its charter)
Virginia 0-17060 54-1295923
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
P.O. Box 7000 22815
Broadway, Virginia (Zip Code)
(Address of Principal executive offices)
(703) 896-7001
(Registrant's telephone number,
including area code)
Exhibit Index is on Page _____
<PAGE>
<PAGE>2
Item 2. Acquisition of Assets
Pursuant to the terms of an Asset Purchase Agreement dated
July 27, 1994, between WLR Foods, Inc. (the Registrant),
Wampler-Longacre, Inc., the Registrant's wholly- owned subsidiary
(Wampler-Longacre) (collectively, Wampler), Cuddy Farms, Inc. (Cuddy)
and Cuddy International Corporation (Cuddy International)
(collectively, the Cuddy Corporations), Wampler acquired substantially
all the assets of Cuddy's turkey processing division. The transaction
was closed on August 29, 1994. The acquired assets included, without
limitation, Cuddy's processing facility, further processing facility,
feed mill, three turkey grow-out farms, leasehold interest in a second
further processing facility, and all working capital, machinery and
fixtures, equipment and other tangible personal property for, and
inventory in, such facilities (the Assets).
The purchase price for the Assets was $73.3 million, subject
to certain post- closing adjustments which are not expected to be
material. Of the total purchase price, $42.5 million was paid in
cash, and the balance was issued in shares of the Registrant's common
stock. The number of shares was based on a value of $24 per share.
Cash was generated from short term borrowings.
Cuddy's turkey processing division operated the Assets as a
fully integrated turkey processor. The Registrant intends to continue
those operations at their present locations in North Carolina.
The shares issued in this transaction, which have not been
registered under the Securities Act of 1933, are subject to a voting
trust agreement by and among the Registrant, Cuddy and an independent
corporate trustee. The Voting Trust Agreement will terminate upon the
earlier of (a) the fourth anniversary of the Closing date; (b) the
date on which a business acquisition by the Registrant occurs in which
in excess of five percent (5%) of its then outstanding common stock is
issued without voting and transfer restrictions similar to the Voting
Trust Agreement and Cuddy's stock ownership in the Registrant after
such acquisition is less than five percent (5%) of the total
outstanding shares of the Registrant's common stock; or (c) the date
on which a "Change of Control" in the Registrant occurs. For purposes
of the Voting Trust Agreement, a Change of Control means the
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the Exchange Act)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
30 percent (30%) of either the then outstanding shares of common stock
of the Registrant or the combined voting power of the then outstanding
voting securities of the Registrant entitled to vote generally in the
election of directors. During the term of the Voting Trust Agreement,
the trustee will vote in accordance with the recommendation of the
Registrant's Board of Directors, as it exists at the time of the vote
of the Registrant's shareholders, or if there is no recommendation, as
directed by the registered holder of the voting trust certificate
representing the shares held by the trustee. Unless otherwise agreed
to in writing by the Registrant, the voting trust certificates are not
transferable except that (a) the holder thereof may pledge, mortgage
or otherwise encumber the certificates and (b) the holder thereof may
transfer the certificates to Cuddy International or a wholly-owned
subsidiary of Cuddy International. Any transferee shall also be
<PAGE>3
subject to the Voting Trust Agreement. After termination of the
Voting Trust Agreement, Cuddy will have certain demand and incidental
registration rights, pursuant to a Registration Agreement dated August
29, 1994.
Further, the voting trust certificates and the underlying
shares have been pledged by Cuddy to secure payment and performance by
Cuddy under certain loan agreements executed by Cuddy with
Cooperatieve Centrale Raiffeisen-Boerenieenbank B.A., "Rabobank
Nederland, New York Branch" (Rabobank) and The Prudential Insurance
Company of America (Prudential). In order to effect the pledges, the
Registrant, Cuddy, Rabobank, Prudential and the Trustee entered a Put
and Call Agreement dated August 29, 1994.
Pursuant to the Put and Call Agreement, upon the occurrence
of a default, as defined in the Put and Call Agreement, if either
Rabobank or Prudential, as the case may be (Transferring Bank) desires
to transfer the voting trust certificates in connection with its
realization on the voting trust certificates pursuant to the
applicable loan agreement, it must provide written notice of the
intended transfer to the Registrant. Upon delivery of the notice, the
Registrant shall have a call option, exercisable within a period of
twenty (20) days thereafter, obligating the Transferring Bank to sell
the voting trust certificates at a price of twenty dollars ($20) per
underlying share. Similarly, upon delivery of written notice of an
intended transfer, the Transferring Bank shall have a put option,
exercisable within a period of twenty (20) days thereafter, obligating
the Registrant to purchase the voting trust certificates at a price of
fifteen dollars ($15) per underlying share. In the event the
Registrant fails to fulfill its obligation under the put option, the
Trustee is directed to immediately release the underlying shares and
to transfer them to the Transferring Bank, or its nominee, free and
clear of the Voting Trust Agreement. The Put and Call Agreement
terminates upon the termination of the voting trust.
Also in connection with the acquisition, Cuddy, Cuddy
International, A.M.C. Family Holdings, Ltd. and A.M. Cuddy (the Cuddy
Group) entered into a Non-Competition and Name Use Agreement by which
the Cuddy Group covenants not to compete with Wampler-Longacre for a
period of four years in the business of poultry production for
processing, further processing or marketing of processed poultry
products (exclusive of production of eggs and poults) (the Protected
Business) in the geographical area in the continental United States in
which Wampler-Longacre or its affiliates currently conduct business.
Sales to certain existing customers of the Cuddy Group are excluded.
The Registrant paid Cuddy $500,000 in cash at closing in consideration
of the agreement. Pursuant to the Non-Competition and Name Use
Agreement, Cuddy also granted Wampler- Longacre a five (5)-year
exclusive right and license to the "Cuddy" name within the continental
United States for the Protected Business. The Non-Competition and
Name Use Agreement contains "standstill" provisions by which the Cuddy
Group agrees, for so long as the Voting Trust Agreement is not
terminated, not to: solicit proxies or participate in an election
contest relating to election of the directors; act together with
others to acquire; hold or vote the Registrant's common stock;
purchase or otherwise acquire the Registrant's common stock; or act
alone or together with any person to acquire, or propose a business
combination with, the Registrant.
<PAGE>4
Pursuant to the Asset Purchase Agreement, a Cuddy
representative was appointed to the Registrant's Board of Directors to
serve until the next annual meeting of the shareholders, and to be
recommended by the Registrant's Board of Directors for election at
such meeting.
The parties to the Agreement also signed separate
indemnification agreements (the "Indemnification Agreements"),
mutually agreeing to certain indemnification. On the part of the
Cuddy Corporations, indemnification of Wampler is required in
connection with certain possible litigation relating to stockholder
and employee complaints. On the part of Wampler, indemnification of
the Cuddy Corporations is required in connection with pending or
possible litigation relating to the efforts of Tyson Foods, Inc. to
acquire the Registrant. Both agreements terminate upon final
termination of all actions, suits, proceedings or investigations
relating to the respective litigations.
The foregoing description is qualified in its entirety by
reference to the exhibits hereto, which are incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Because it is impracticable to provide the requisite
financial statements at the time of this filing, they will be filed
under cover of Form 8-K/A as they are available, but no later than 75
days from the date of this report.
EXHIBITS
Exhibit
2.1 Asset Purchase Agreement dated July 27, 1994 -
incorporated by reference to the Registrant's Form 8-K
filed July 29, 1994
4.1 Put and Call Agreement dated August 19, 1994
4.2 Non-Competition and Name Use Agreement dated August 29,
1994
4.3 Registration Rights Agreement dated August 29, 1994
9.1 Voting Trust Agreement dated August 29, 1994
10.1 Indemnification Agreement dated July 27, 1994 by and
between WLR Foods, Inc. and Cuddy Farms, Inc. -
incorporated by reference to the Registrant's Form 8-K
filed July 29, 1994
10.2 Indemnification Agreement dated July 27, 1994 by and
among Cuddy Farms, Inc., Cuddy International
Corporation and WLR Foods, Inc. - incorporated by
reference to the Registrant's Form 8-K filed July 29,
1994
99.2 Press Release dated August 29, 1994
<PAGE>
<PAGE>5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
WLR Foods, Inc.
By:_________________________________
Delbert L. Seitz
Chief Financial Officer
Secretary and Treasurer
22278
<PAGE>
<PAGE>6
EXHIBIT INDEX
Exhibit No. Description Page
Number
2.1 Asset Purchase Agreement dated July 27, 1994 N/A
incorporated by reference to the Registrant's
Form 8-K filed July 29, 1994
4.1 Put and Call Agreement dated August 19, 1994 7
4.2 Non-Competition and Name Use Agreement 16
dated August 29, 1994
4.3 Registration Rights Agreement dated August 29, 1994 20
9.1 Voting Trust Agreement dated August 29, 1994 33
10.1 Indemnification Agreement dated July 27, 1994 N/A
by and between WLR Foods, Inc. and Cuddy Farms,
Inc. incorporated by reference to the
Registrant's Form 8-K filed July 29, 1994
10.2 Indemnification Agreement dated July 27, 1994 N/A
by and among Cuddy Farms, Inc., Cuddy
International Corporation and WLR Foods, Inc. -
incorporated by reference to the Registrant's Form 8-K
filed July 29, 1994
99.2 Press Release dated August 29, 1994 42
<PAGE>7
Exhibit 4.1
PUT AND CALL AGREEMENT
THIS PUT AND CALL AGREEMENT is made as of August 29, 1994 by and
among Cuddy Farms, Inc., a North Carolina corporation (the
"Borrower"), Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland, New York Branch" ("Rabobank"), The Prudential
Insurance Company of America ("Prudential") (Rabobank and Prudential
collectively referred to herein as "the Banks"), WLR Foods, Inc., a
Virginia corporation (the "Issuer") and Crestar Bank ("the Trustee").
RECITALS:
A. Concurrently with today's closing of an Asset Purchase
Agreement dated July 27, 1994 by and among the Borrower, Issuer and
others, 1,183,333 shares of common stock of the Issuer were issued on
behalf of the Borrower to the Trustee, trustee under a Voting Trust
Agreement of even date herewith, who, in turn, has issued to Borrower
voting trust certificates representing such shares. A copy of the
Voting Trust Agreement is attached hereto as Exhibit A. The Borrower
and Issuer anticipate that additional shares of the Issuer's common
stock may be issued to the Trustee, on behalf of Borrower, following
certain post-closing adjustments. The shares which have been or yet
may be issued to the Trustee under the Voting Trust Agreement shall be
referred to herein as "Shares" and the voting trust certificates
representing such Shares shall be referred to herein as "Voting Trust
Certificates."
B. The Borrower has entered into pledge agreements, of even
date herewith, with the Banks by which it has granted first priority
security interests to Rabobank and second priority security interests
to Prudential in the Shares and Voting Trust Certificates for the
purpose of securing payment and performance of the Borrower under
respective loan agreements with the Banks.
C. In connection with the release of the Banks' liens on
certain assets today acquired pursuant to the above-referenced Asset
Purchase Agreement, the Issuer has agreed to be bound by certain "put"
provisions, and the Banks have agreed to be bound by certain "call"
provisions, described herein.
NOW, THEREFORE, in consideration of the premises and of the
covenants and conditions hereinafter set forth, the parties covenant
and agree as follows:
1. Put Option. At any time during the term of this Agreement,
Rabobank and Prudential shall each be entitled to deliver a written
notice, in substantially the same form as Exhibit B attached hereto
("Put Notice"), signed by the Bank exercising such Put Notice (the
"Exercising Bank") and delivered concurrently to each of the Issuer,
Trustee and the non-Exercising Bank, which Put Notice shall constitute
a put of the Voting Trust Certificates at a price of Fifteen Dollars
($15.00) (equitably adjusted in the event of stock splits, reverse
stock splits or other similar events) per underlying Share. The
delivery of the Put Notice shall obligate the Issuer to purchase the
Voting Trust Certificates within twenty (20) business days following
the date of delivery of the Notice. Settlement of this put right
shall be made at the offices of the Trustee at which time the Issuer
shall make payment to the Bank exercising the put (the "Exercising
<PAGE>8
Bank") by wire transfer of immediately available funds and the
Exercising Bank shall endorse and deliver to the Issuer the Voting
Trust Certificates.
2. Release of Shares. If and only if the Issuer does not
make timely settlement of its purchase obligation described in Section
1 above, the Trustee shall immediately release and transfer to the
Exercising Bank, or its nominee, the Shares, free and clear of the
Voting Trust Agreement. The Trustee shall note on the reverse side of
the stock certificate(s) evidencing the Shares the release of the
Shares from the Voting Trust Agreement, which signature shall be valid
and binding against all parties hereto.
3. Registration Rights. The Issuer expressly acknowledges
the Borrower's right to assign to the Banks its interest in a
Registration Rights Agreement of even date herewith.
4. Call Option. In the event either Bank desires to transfer
any of the Voting Trust Certificates in connection with its
realization on the Voting Trust Certificates according to its pledge
agreement with the Borrower (the "Transferring Bank"), the
Transferring Bank shall deliver to the Issuer and the non-Transferring
Bank a written notice, in substantially the same form as Exhibit C
attached hereto ("Call Notice"), which notice shall give rise to the
Issuer's right within twenty (20) business days of the date of
delivery of the Call Notice to purchase the Voting Trust Certificates
which the Transferring Bank intends to transfer as set forth in the
Call Notice at a price of Twenty Dollars ($20.00) (equitably adjusted
in the event of stock splits, reverse stock splits or other similar
events) per underlying Share. This call right shall be effected by
the Issuer's execution and delivery of the Call Notice in the space
provided thereon. Settlement of this call right shall be made at any
mutually agreeable location at which time the Issuer shall make
payment to the Transferring Bank by wire transfer of immediately
available funds, and the Transferring Bank shall endorse and deliver
to the Issuer the Voting Trust Certificates.
5. Termination. Upon termination of the Voting Trust
Agreement, this Agreement shall likewise be terminated.
6. Indemnification. The Exercising Bank or Transferring
Bank,as the case may be, shall indemnify and hold harmless the Trustee
andthe Issuer and their respective officers, directors, employees,
shareholders, partners, agents, legal counsel and accountants (each an
"Indemnitee") to the fullest extent permitted by applicable law in
effect on the date hereof or as such laws may from time to time be
amended from and against all losses, claims, damages, liabilities and
expenses (including attorney's fees and expenses and any and all
expenses whatsoever incurred in investigating, preparing or defending
any action, suit, investigation or proceeding), and amounts paid in
settlement incurred by an Indemnitee if such Indemnitee is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit, investigation or proceeding, whether civil,
criminal, administrative or investigative in nature, in each case
arising from, caused by or in connection with the actions reasonably
taken by them in reliance on any inaccuracy of any statement made by
the Exercising Bank or Transferring Bank in the Put Notice or Call
Notice, as the case may be.
<PAGE>9
7. Notices. All notices hereunder shall be deemed to be
sufficiently given or made if telecopied or delivered against receipt
to the party to whom it is to be given at the following address (or
such other address as the party shall have furnished in writing
according to this Section):
(a) If to Rabobank, at with a copy to
Rabobank Nederland Rabobank Nederland
245 Park Avenue 245 Park Avenue
New York, NY 10167 New York, NY 10167
Attn: Joanna M. Solowski, VP Attn: Corporate Services
Dept.
Fax No.: 212-818-0233 Fax No.: 212-818-0233
(b) If to Prudential, at with a copy to
The PrudentialInsurance Company The Prudential
of America Insurance Company
of America
801 Warrenville Road 201 S. Orange Ave.
Suite 600 Suite 795
Lisle, IL 60532 Orlando, FL 32803
Fax No.: 708-810-0764 Fax No.:407-649-4963
(c) If to the Borrower, at with a copy to
Cuddy International Corporation J. Rob Collins, Esq.
465 Richmond Street, Suite 600 Blake, Cassels &
Graydon
London, Ontario Canada N6A 5P4 Suite 2800, Box 25
Attn: President Commerce Court West
Fax No.: 519-679-9355 Toronto, Canada
M5L1A9
Fax No.:416-863-2174
(d) If to the Issuer, at with a copy to
WLR Foods, Inc. John W. Flora, Esq.
P.O. Box 7000 Wharton, Aldhizer &
Weaver
Broadway, VA 22815 100 S. Mason Street
Attn: President P.O. Box 809
Fax No.: 703- 896-0498 Harrisonburg, VA
22801
Fax No.:703-434-5502
(e) If to the Trustee, at
Crestar Bank
Corporate Trust Administration
10th Floor
919 E. Main Street
Richmond, VA 23219
Fax No.: 804-782-7855
<PAGE>10
8. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this
Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
9. Modification. No modification of this Agreement shall be
effective unless in writing and signed by the parties hereto.
10. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.
11. Severability of Provisions. If any provision or any portion
of any provision of this Agreement or the application of any such
provision or any portion thereof to any person or circumstance, shall
be held invalid or unenforceable, the remaining portion of such
provision and the remaining provisions or portion of such provisions
shall not be affected thereby.
12. Governing Law. This Agreement shall be construed and
applied in accordance with, and the respective rights, obligations and
remedies of the parties hereto shall be governed in all respects by,
the laws of the Commonwealth of Virginia.
13. Captions. All Section headings or titles are included in
this Agreement for convenient reference only, and shall not affect the
interpretation, meaning or applications of the provisions of this
Agreement or otherwise affect the terms hereof.
14. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so
executed shall be an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers hereunto duly authorized as
of the day and year first above written.
CUDDY FARMS, INC., a North Carolina
corporation
By_____________________________________
Its_____________________________________
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND, NEW YORK BRANCH"
By_____________________________________
Its_____________________________________
<PAGE>11
By_____________________________________
Its_____________________________________
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By______________________________________
Its______________________________________
WLR FOODS, INC., a Virginia corporation
By_____________________________________
Its_____________________________________
CRESTAR BANK
By_____________________________________
Its_____________________________________
20618
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<PAGE>12
EXHIBIT B
PUT NOTICE
The undersigned hereby certifies to WLR Foods, Inc. ("WLR Foods")
and Crestar Bank (the "Trustee") as follows:
1. The undersigned is a party to certain loan agreement(s)
with Cuddy Farms, Inc. (the "Borrower"), and ancillary documents
related thereto, including a pledge agreement by which certain shares
of WLR Foods' common stock are pledged as security for the payment and
performance of all obligations of the Borrower under such loan
agreement(s).
2. The shares of WLR Foods' common stock so pledged are held
by the Trustee pursuant to a Voting Trust Agreement (the "Voting Trust
Agreement") dated August 29, 1994, by and among WLR Foods, the
Borrower, and the Trustee.
3. A default, as defined by the pledge agreement between the
Borrower and the undersigned, has occurred, applicable cure periods
have expired and a prior written notice of default has been timely
given to WLR Foods; provided, however, that if prior written notice of
default has not been timely given, the twenty (20)-day period
described in Section 1 of a Put and Call Agreement described in
paragraph 5 below shall be extended for those number of days the
notice of default is late.
4. Pursuant to the undersigned's pledge agreement with the
Borrower, the undersigned is entitled to realize upon the shares of
WLR Foods' common stock held by the Trustee pursuant to the Voting
Trust Agreement, subject only to the terms of such Voting Trust
Agreement and a Put and Call Agreement described in paragraph 5 below.
5. Pursuant to the terms of a Put and Call Agreement dated
August 29, 1994 by and among WLR Foods, the Borrower, the Trustee,
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
Nederland, New York Branch" and The Prudential Insurance Company of
America, the undersigned is entitled to exercise a put right by which
the WLR Foods is obligated to purchase certain voting trust
certificates held by the undersigned.
6. The undersigned hereby delivers concurrently to each of WLR
Foods and the Trustee this notice for the purpose of exercising its
put right under the Put and Call Agreement. The settlement date is
set for twenty (20) business days following the date of this notice
(or longer, if extended under paragraph 3 above); namely [date], at
the offices of the Trustee.
7. In the event that timely settlement of the undersigned's
put right is not made by WLR Foods, this notice shall also constitute
direction to the Trustee immediately to release the shares of WLR
Foods' common stock held by it under the Voting Trust Agreement, free
and clear of the Voting Trust Agreement.
8. A copy of this notice has been delivered to [Non-Exercising
Bank] concurrently with the delivery hereof to WLR Foods and Crestar
Bank.
<PAGE>13
IN WITNESS WHEREOF, the undersigned has caused this notice to be
signed by a duly authorized officer as of this [date] which
constitutes the date of this notice.
[EXERCISING BANK]
By____________________________________
Its____________________________________
20621
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<PAGE>14
EXHIBIT C
CALL NOTICE
The undersigned hereby certifies to WLR Foods, Inc. ("WLR Foods")
as follows:
1. The undersigned is a party to certain loan agreement(s)
with Cuddy Farms, Inc. (the "Borrower"), and ancillary documents
related thereto, including a pledge agreement by which certain voting
trust certificates issued pursuant to a Voting Trust Agreement (the
"Voting Trust Agreement") dated August 29, 1994, by and among WLR
Foods, the Borrower, and the Crestar Bank, Trustee are pledged as
security for the payment and performance of all obligations of the
Borrower under such loan agreement(s).
2. A default, as defined by the pledge agreement between the
Borrower and the undersigned, has occurred, applicable cure periods
have expired and a prior written notice of default has been timely
given to WLR Foods; provided, however, that if prior written notice of
default has not been timely given, the twenty (20)-day period
described in Section 4 of a Put and Call Agreement described in
paragraph 4 below shall be extended for those number of days the
notice of default is late.
3. Pursuant to the undersigned's pledge agreement with the
Borrower, the undersigned is entitled to realize upon the voting trust
certificates, subject only to the terms of such Voting Trust Agreement
and a Put Agreement described in paragraph 4 below.
4. Pursuant to the terms of a Put and Call Agreement dated
August 29, 1994 by and among WLR Foods, the Borrower, the Trustee,
Cooperatieve Centrale Raiffeisen- Boerenleenbank B.A., "Rabobank
Nederland, New York Branch" and The Prudential Insurance Company of
America, the undersigned is required to give this notice of its intent
to transfer the Voting Trust Certificates, which notice gives rise to
the right of WLR Foods to purchase the Voting Trust Certificates at
any time hereafter until termination of the Put and Call Agreement.
5. The undersigned intends to transfer [_______] Voting Trust
Certificates to [identify transferee] expressly subject to WLR Foods'
right to call such Voting Trust Certificates arising hereby, which
call shall be effected by WLR Foods' execution of the "Exercise of
Call" section of this Call Notice, below.
6. A copy of this notice has been delivered to
[Non-Transferring Bank] concurrently with the delivery hereof to WLR
Foods and Crestar Bank.
IN WITNESS WHEREOF, the undersigned has caused this notice to be
signed by a duly authorized officer as of this [date] which
constitutes the date of this notice.
[TRANSFERRING BANK]
By____________________________________
Its____________________________________
_____________________________________________________________________
<PAGE>15
EXERCISE OF CALL
WLR Foods hereby exercises its right to call the above-referenced
Voting Trust Certificates under the Put and Call Agreement. The
settlement date is set for twenty (20) business days (or longer, if
extended under paragraph 2 above) following the date of delivery of
this Call Notice to WLR Foods; namely [date], at the offices of the
[name].
WLR FOODS, INC.
__________________ By____________________________________
Date Its____________________________________
______________________________________________________________________
20620
<PAGE>16
Exhibit 4.2
NON-COMPETITION AND NAME USE AGREEMENT
THIS NONCOMPETITION AND NAME USE AGREEMENT is made and entered
into this August 29, 1994, by and among WAMPLER-LONGACRE, INC., a
Virginia corporation (Wampler-Longacre) and CUDDY FARMS, INC., a North
Carolina corporation (Cuddy), CUDDY INTERNATIONAL CORPORATION, a
corporation incorporated under the laws of Ontario, A.M.C. Family
Holdings, Ltd., a corporation incorporated under the laws of Ontario,
and A.M. Cuddy (collectively "Cuddy Group"). RECITALS
A. Cuddy has heretofore operated two divisions. The farm
division is a major supplier of turkey eggs and poults with facilities
in North Carolina, South Carolina, Iowa, Missouri, Ohio, Virginia and
Minnesota (the Poult Business). The food division is an integrated
turkey processor with three turkey processing facilities, a feedmill,
growout operations, and an interest in a cold storage distribution
center, all located in North Carolina (the Business).
B. Wampler-Longacre has today purchased substantially all of
the Business.
C. Wampler-Longacre desires to pay Cuddy, on behalf of the
Cuddy Group, a certain sum to protect itself and its affiliates from
competition and control contests by the Cuddy Group and for certain
rights, described herein, to the use of the "Cuddy" name. NOW,
THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency thereof is hereby
acknowledged, the parties represent and agree as follows:
1. Covenant Not To Compete. The Cuddy Group jointly and
severally agrees that it will not engage in, directly or indirectly,
either themselves or for any other person, partnership, corporation,
company or entity, or participate (as defined below) in any enterprise
involved in the businesses of poultry production for processing,
further processing or marketing of processed poultry products
(specifically excluded is poultry production of eggs and poults and
the marketing of such products) (the Protected Business), in the
geographical area in the continental United States in which
Wampler-Longacre or its affiliates currently conducts its business,
including without limitation, Virginia, West Virginia, North Carolina
and Pennsylvania, for a period of four (4) years from the date hereof.
As used herein, the term "participate" means lending one's name to,
acting as consultant or advisor to, or acquiring any direct or
indirect interest in any enterprise, whether as stockholder, partner,
officer, director, employee or otherwise (other than by ownership of
less than two percent of the stock of a publicly-held corporation and
ownership in WLR Foods, Inc.). The Cuddy Group agrees that this
covenant is reasonable in its scope, geographical area and duration.
However, Cuddy International Corporation and its affiliates will
continue to be permitted to provide poultry products for distribution
in the United States, but only to McDonalds, Delta Daily Foods and for
distribution under three private labels, namely President Choice
Products, Master Choice Products and Sensational Brand Products.
2. Covenant of No Contest. The Cuddy Group agrees that during
the period that common stock of WLR Foods, Inc. acquired today by
Cuddy in exchange for the Business is subject to voting and transfer
restrictions as set forth in Section 13.4 of the Asset Purchase
<PAGE>17
Agreement dated the date hereof, the Cuddy Group, jointly and
severally, agrees none of them, nor any of their affiliates will,
directly or indirectly, without in each instance the prior written
consent of WLR Foods, Inc., parent corporation of Wampler-Longacre,
expressed in a resolution duly adopted by the Board of Directors of
WLR Foods, Inc.: (a) solicit any proxies, under any circumstances,
for any matter whatsoever with respect to any class of capital stock
or other securities of WLR Foods, Inc. which is then entitled to vote
in the election of directors or on any other matter (Voting
Securities), or become a "participant" in any "election contest"
relating to the election of directors of WLR Foods Inc. (as such terms
are used in Rule 14a-11 of Regulations 14A under the Securities
Exchange Act of 1934, as amended, or to seek to advise or influence
any person with respect to the voting of any Voting Securities of WLR
Foods, Inc. on any matter whatsoever; (b) act together with any other
person for the purpose of acquiring, holding, voting or disposing of
any Voting Securities of WLR Foods, Inc. or any options or other
rights to acquire any such securities; (c) purchase or otherwise
acquire, or offer, propose or agree to purchase or otherwise acquire,
or advise, encourage or assist in the acquisition of, any Voting
Securities of WLR Foods, Inc. or options or rights to acquire any such
securities; or (d) act alone or together with any person to acquire,
or propose a business combination with, WLR Foods, Inc.
3. Use of "Cuddy" Name. Cuddy hereby grants Wampler-Longacre a
five (5) year exclusive right and license to use the name or mark
"Cuddy," alone or in combination with other names or marks, within the
continental United States in connection solely with the Protected
Business. This five (5)-year term shall terminate on the fifth
anniversary of this Agreement but shall thereafter be renewable upon
such terms and conditions as Wampler-Longacre and Cuddy may mutually
agree. In addition, Cuddy agrees to allow Wampler-Longacre to license
perpetually, or acquire a trademark for "Masterpiece" and "Heritage"
in the continental United States.
4. Cuddy Group Rights. Except as set out in Paragraph 3, the
Cuddy Group shall retain all rights to the "Cuddy" name.
5. Other Users. Cuddy warrants and represents that it has
authorized no other person or entity to use the name "Cuddy" or any
similar name alone or in conjunction with any other word or symbol for
any purpose in the continental United States and that, to its
knowledge, no other person or entity is using in the continental
United States, without authorization, the name "Cuddy" or any similar
name for any purpose other than the corporate name Cuddy Farms, Inc.
as used in conjunction with the Poult Business.
6. Payment. In consideration hereof Wampler-Longacre shall
pay Cuddy, by certified or bank cashier's check or other current funds
acceptable to Cuddy, the sum of Five Hundred Thousand Dollars
($500,000) payable upon execution hereof. The amount of payment, if
any, to be made to D. Bruce Cuddy pursuant to a substantially similar,
but separate, agreement shall reduce this sum.
7. Remedies. The parties acknowledge that a breach of this
Agreement by any party will result in substantial and irreparable
injury to the other party. If any of the provisions herein are
violated, in whole or in part, Wampler-Longacre shall be entitled,
upon application to any court of proper jurisdiction as herein agreed,
<PAGE>18
to restrain and enjoin the Cuddy Group, or any one of them, from such
violation, and to recover cash and reasonable attorneys' fees in
connection with such action, without prejudice to any other remedies
Wampler-Longacre may have at law or in equity.
8. Reformation and Severability. In the event that any
provision herein should ever be deemed to exceed the time, geographic,
occupational or use limitations permitted by law, the parties agree
that such provisions shall be and are reformed to the maximum time,
geographic, occupation and use limitations permitted by applicable
law. Such determination shall not affect the remaining provisions of
this Agreement, all of which shall remain in full force and effect.
9. Binding Agreement. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, each of the parties hereto and their respective legal
representatives, successors and assigns.
10. Governing Law, Venue. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Virginia
applicable to agreements made and to be performed entirely within the
Commonwealth. The Circuit Court of the County of Rockingham, Virginia
or the United States District Court for the Western District of
Virginia, Harrisonburg Division, as appropriate, shall have exclusive
jurisdiction and venue over any claims or causes of action concerning
this Agreement, except that any claim asserted against Cuddy
International Corporation, A.M.C. Family Holdings, Ltd. and A.M. Cuddy
shall be pursued only in Ontario, Canada courts.
11. Waiver. A waiver by any party of a breach of any provision
of this Agreement shall not operate as, nor be construed as, a waiver
of any subsequent breach thereof. IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first above written.
WAMPLER-LONGACRE, INC.
By:__________________________________
Its: President
CUDDY FARMS, INC.
By:___________________________________
Its: Executive Vice President
CUDDY INTERNATIONAL CORPORATION
By:__________________________________
Its:_______________________________
A.M.C. FAMILY HOLDINGS, LTD.
<PAGE>19
By:____________________________________
Its:___________________________________
______________________________________
A. M. CUDDY
JWF/mc/17939
<PAGE>20
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered in to this
29th day of August, by and between WLR Foods, Inc., a Virginia
corporation (including its successors, the "Issuer"), and Cuddy Farms,
Inc., a North Carolina corporation, ("Cuddy") (Cuddy and any
transferee as permitted in Section 2.2 hereof being the "Holder").
RECITALS
A. The Issuer and Cuddy are parties to an Asset Purchase
Agreement dated July 27, 1994 (the "Purchase Agreement"), which
Purchase Agreement provides, in part, for the issuance of shares of
common stock of the Issuer (the "Common Stock") to Cuddy.
B. The Issuer, as an inducement to Cuddy to enter into the
Purchase Agreement, has agreed to provide for the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of
shares of Common Stock to be issued under the Purchase Agreement (the
"Shares") under the circumstances set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties agree as
follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. Certain Definitions.
(a) As used herein, the term "Commission" means the United
States Securities and Exchange Commission.
(b) As used herein, the term "Public Offering" means any
underwritten public offering of securities of the Issuer pursuant to
an effective registration statement under the Securities Act.
(c) As used herein, the term "Registrable Securities" means any
(i) Shares and (ii) securities issued or issuable with respect to the
Shares by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation, or
other reorganization. As to any particular Registrable Securities,
such securities will cease to be Registrable Securities when they (i)
have been effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, (ii)
have been transferred pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act, unless such securities are
held at such time by a holder of Registrable Securities who may be
deemed an "underwriter" or "affiliate" with respect to the Company (as
those terms are defined under the Securities Act), (iii) constitute
less than one percent (1%) of the total outstanding securities of the
same class as the Registrable Securities, (iv) except as provided in
Section 2.2, have been transferred, directly or indirectly, from the
Holder to any other person without the express written consent of the
Issuer.
(d) As used herein, the term "Incidental Registrable Securities"
means (i) Registrable Securities and (ii) other securities of the
Issuer entitled to registration rights.
Section 1.2. Registration on Request of Holders.
<PAGE>21
(a) Upon the written request at any time after the earlier of
(i) the expiration of the voting and transfer restrictions applicable
to the Shares by virtue of Section 13 of the Purchase Agreement, or
(ii) 150 days prior to the fourth anniversary of the Closing Date
under the Purchase Agreement (the "Registration Date") by the Holder
requesting that the Issuer effect the registration under the
Securities Act of all or part of its Registrable Securities, the
Issuer will promptly use its best efforts to effect, as expeditiously
as possible, but in no event prior to the expiration of the
above-referenced restrictions, the registration under the Securities
Act of (i) the Registrable Securities which the Issuer has been
requested to register by the Holder; and (ii) all other Incidental
Registrable Securities which the Issuer has been requested to register
by any other person having incidental registration rights from the
Issuer or other securities of the Issuer which the Issuer desires to
register, all to the extent necessary to permit the disposition of the
Registrable Securities so to be registered, provided that (A) the
Issuer shall not be obligated to file a registration statement
relating to a registration request under this Section 1.2(a) within a
period of 180 days after the effective date of any other registration
statement filed by the Issuer, other than any registration statement
filed by the Issuer (1) in connection with any employee benefit or
similar plan of the Issuer, (2) in connection with an acquisition by
the Issuer of another person or (3) relating to any non- convertible
debt securities of the Issuer to be offered and sold by the Issuer on
a delayed or continuous basis pursuant to Rule 415 under the
Securities Act ("Rule 415"); (B) the Issuer shall not be obligated to
effect more than two registrations pursuant to this Section 1.2(a),
each of which may not be requested earlier than 180 days after the
consummation of an offering effected pursuant to demand registration
hereunder; and (C) such registration may not relate to an offering of
Registrable Securities on a delayed or continuous basis pursuant to
Rule 415 and (D) may be delayed by the Issuer for up to 135 days if
the Issuer determines that the filing of the registration statement
would require the disclosure of material nonpublic information that is
in the best interest of the Issuer to maintain as confidential;
provided, however, that, in the event of a delay hereunder, the Holder
may withdraw its request which, if withdrawn, will not be considered
one of the demand registrations requested pursuant to Section 1.2
hereof.
(b) Expenses. The Issuer will pay all registration expenses in
connection with each registration of Registrable Securities pursuant
to this Section 1.2, and the Holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of the Registrable Securities pursuant to a
registration statement effected pursuant to this Section 1.2.
(c) Effective Registration Statement. A registration requested
pursuant to this Section 1.2 shall not be deemed to have been effected
unless the registration statement relating thereto (i) has become
effective under the Securities Act and any of the Registrable
Securities of the Holder have actually been sold thereunder and (ii)
has remained effective for a period of at least 90 days (or such
shorter period in which all Registrable Securities registered
thereunder have actually been sold thereunder); provided that. if
after any registration statement requested pursuant to this Section
1.2 becomes effective, such registration statement is interfered with
by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court solely due to the
<PAGE>22
actions or omissions to act of the Issuer, such registration statement
shall not be considered one of the registrations which may be
requested pursuant to Section 1.2 hereof.
(d) Selection of Underwriters. If any requested registration
pursuant to this Section 1.2 is in the form of a Public Offering, then
(i) all holders of Incidental Registrable Securities to be included in
such registration requested shall sell their Incidental Registrable
Securities to the underwriters on the same terms and conditions and
(ii) the Holder shall have the right to select the managing
underwriter that will administer the offering with the consent of the
Issuer, which consent shall not be unreasonably withheld or delayed.
(e) Pro-Rata Participation in Requested Registrations. If a
requested registration pursuant to this Section 1.2 involves a Public
Offering and the managing underwriter shall advise the Issuer that, in
such underwriter's reasonable view, the number of securities
(including all Registrable Securities) requested to be included in
such registration exceeds the largest number of securities (the
"Maximum Offering Size") which can be sold without an adverse effect
on the terms of the proposed offering (including, without limitation,
the price at which such securities can be sold), the Issuer will
include in such registration, in the order listed below, up to the
Maximum Offering Size:
First, Registrable Securities of the Holder.
Second, Incidental Registrable Securities proposed to be
sold by any other holder requesting registration allocated pro-rata
among such holders based on the relative number of Incidental
Registrable Securities proposed to be sold in the proposed offering by
each such holder or on such other basis as Issuer may have agreed with
such holders.
Third, securities of the Issuer proposed to be sold by the
Issuer.
Section 1.3 Incidental Registration.
(a) If the Issuer at any time after the Registration Date
proposes to register any securities of the Issuer under the Securities
Act (other than a registration (i) on Form S-8 or S-4 or any successor
or similar forms, (ii) relating to securities of the Issuer issuable
upon exercise of employee stock options or in connection with any
employee or grower benefit or similar plan of the Issuer or any of its
subsidiaries, or (iii) in connection with a direct or indirect
acquisition by the Issuer or any of its subsidiaries of another
company) in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, the Issuer
may, but shall not be required to, give prompt written notice to all
(but not less than all) holders of Incidental Registrable Securities
of its intention to do so (including its intended method of
disposition) and of such holders' rights in the event the holders are
notified, under this Section 1.3. Any such notice, if given, shall
offer the Holder the opportunity to include in such registration
statements such number of Registrable Securities as the Holder may
request. Upon the written request of the Holder made within 20 days
after the giving of such written notice by the Issuer (which request
shall specify the number of Incidental Registrable Securities intended
to be disposed of by the Holder), the Issuer will use its best efforts
<PAGE>23
to effect the registration under the Securities Act of all Incidental
Registrable Securities which the Issuer has been so requested to
register by the holders thereof, to the extent requisite to permit the
disposition of the Incidental Registrable Securities so to be
registered in accordance with the Issuer's intended method of
disposition; provided that (i) if such registration involves a Public
Offering, all holders of Incidental Registrable Securities requesting
to be included in the Issuer's registration must sell their Incidental
Registrable Securities to the underwriters selected by the Issuer on
the same terms and conditions as apply to the Issuer and (ii) if, at
any time after giving written notice of its intention to register any
securities pursuant to this Section 1.3 and prior to the effective
date of the registration, the Issuer shall determine for any reason
not to register any securities, the Issuer shall give written notice
to the Holder of Incidental Registrable Securities and thereupon shall
be relieved of its obligation to register any Incidental Registrable
Securities in connection with such registration. The Issuer will pay
all registration expenses in connection with each registration of
Incidental Registrable Securities requested pursuant to this Section
1.3, and the Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or
disposition of the Holder's Incidental Registrable Securities pursuant
to a registration statement effected pursuant to this Section 1.3.
(b) Priority in Incidental Registrations If a registration
pursuant to this Section 1.3 involves a Public Offering and the
managing underwriter advises the Issuer that, in its view, the number
of securities (including all Registrable Securities) which the Issuer,
the Holder and any other persons intend to include in such
registration exceeds the Maximum Offering Size, the Issuer will
include in such registration, in the following priority, up to the
Maximum Offering Size:
First, all the securities of the Issuer proposed to be
included by the Issuer and by any person exercising a demand
registration right; and
Second, Incidental Registrable Securities requested to be
included in such registration by the holders thereof allocated
pro-rata among all holders based on the relative number of Incidental
Registrable Securities each holder proposed to be sold in the proposed
offering.
Section 1.4. Registration Procedures. Whenever the Holder
requests that any Registrable Securities be registered pursuant to
Sections 1.2 or 1.3 of this Agreement, the Issuer will, subject to the
provisions of such Sections, use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance
with the intended method of disposition thereof as promptly as
reasonably practicable, and in connection with any such request:
(a) The Issuer will as promptly as reasonably practicable
prepare and file with the Commission a registration statement on any
form for which the Issuer then qualifies or which counsel for the
Issuer will deem appropriate and which form shall be available for the
sale of the Incidental Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed registration
statement to become and remain effective (including by the filing of
amendments or supplements to such registration statement) for a period
<PAGE>24
of not less than 90 days (or such shorter period in which all
Registrable Securities registered thereunder have actually been sold
thereunder).
(b) The Issuer will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to the
Holder and to each underwriter, if any, and to each person who may be
deemed to be a controlling person under Section 15 of the Securities
Act (a "Controlling Person") of each of the foregoing copies of such
registration statement as proposed to be filed, and thereafter the
Issuer will furnish to the Holder, each underwriter and each
Controlling Person of each of the foregoing, if any, such number of
copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such
registration statement (including each preliminary prospectus) and
such other documents as the Holder, underwriter or Controlling Person
may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(c) After the filing of the registration statement, the Issuer
will promptly notify the Holder, each underwriter, if any, and each
Controlling Person of each of the foregoing of any stop order issued
or threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if
entered.
(d) The Issuer will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue
sky laws of such jurisdictions in the United States as the Holder
reasonably (in light of such Holder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered
with or approved by such other governmental agencies or authorities,
if any, as may be necessary by virtue of the business and operations
of the Issuer and do any and all other acts and things that may be
reasonably necessary or advisable to enable the Holder to consummate
the disposition of the Registrable Securities; provided that the
Issuer will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (d), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such
jurisdiction.
(e) The Issuer will immediately notify the Holder, each
underwriter, if any, and each Controlling Person of each of the
foregoing, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the occurrence of an
event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of the
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and promptly make available to the Holder,
underwriter and Controlling Person any such supplement or amendment;
provided, however, that, if such supplement or amendment would require
the disclosure of nonpublic information that is in the best interests
of the Issuer to be maintain as confidential, the Issuer may delay
such supplement or amendment for up to 135 days except: (i) with
respect to sales made but not closed pursuant to the registration
<PAGE>25
statement on or before the date of receipt of notice by the Holder of
the Issuer's intention to delay; and (ii) as to any delay extending
for more than two weeks, the Holder may elect to terminate the
registration statement and such registration statement shall not be
considered one of the registrations which may be requested pursuant to
Section 1.2 hereof.
(f) The Issuer will enter into customary agreements (including
an underwriting agreement in customary form) and take such other
actions as are customary and are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities.
(g) The Issuer will make available for inspection by the Holder,
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other
professional retained by the Holder or underwriter (collectively, the
"Inspectors"), and any Controlling Person of any of the foregoing such
financial and other records, pertinent corporate documents and
properties of the Issuer (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Issuer's officers, directors and
employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement. Each
Holder shall be given adequate opportunity to comment on such
registration statement and to request the insertion therein of
material furnished to the Issuer in writing which in the reasonable
judgment of such Holder upon the advice of counsel experienced in
securities laws should be included in order to avoid a violation of
applicable law and to request the deletion of its name from the
registration statement if the materials furnished are not included in
such registration statement, and, if such registration statement is
the Holder's second demand registration statement under Section 1.2
hereof, such registration statement shall not be considered a demand
registration statement. Records which the Issuer determines, in good
faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless the
release of such records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction; provided, however, that
if the Holder reasonably believes that disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such
registration statement and the Issuer declines to make such
disclosure, the Holder may withdraw from participation in the
registration and, if, such registration statement is the Holder's
second demand registration statement under Section 1.2 hereof, such
registration statement shall not be considered a demand registration
statement. The Holder agrees that information obtained by it as a
result of such inspections shall be kept confidential by it and shall
not be used by it except in connection with the discharge of its due
diligence in connection with a registration unless and until such is
made generally available to the public otherwise than through
disclosure by the Holder or Inspectors. The Holder further agrees
that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Issuer and
allow the Issuer, at its expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential.
(h) The Issuer will furnish to the Holder, each underwriter, if
any, and each Controlling Person of each of the foregoing a signed
counterpart, addressed to such Holder and Controlling Person and
underwriter, if any, of (i) an opinion or opinions of counsel to the
<PAGE>26
Issuer and (ii) a comfort letter or comfort letters from the Issuer's
independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as holders of a majority of the
Incidental Registrable Securities included in such registration
statement or the managing underwriter therefor reasonably requests
provided the same are customarily provided in similar transactions at
such time.
(i) The Issuer will otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering a period of 12 months, beginning within
three months after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and the rules and regulations thereunder.
(j) The Issuer will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Issuer are then listed.
(k) The Issuer will provide a transfer agent for all such
Registrable Securities not later than the effective date of such
registration statement.
The Issuer may require the Holder to promptly furnish in writing
to the Issuer such information regarding the distribution of the
Registrable Securities as the Issuer may from time to time reasonably
request and such other information as may be legally required in
connection with such registration.
The Holder agrees that, upon receipt of any notice from the
Issuer of the happening of any event of the kind described in clause
(e), the Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such
Registrable Securities until the Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by clause (e), and, if
so directed by the Issuer, the Holder will deliver to the Issuer all
copies, other than permanent file copies then in Holder's possession,
of the most recent prospectus covering such Registrable Securities at
the time of receipt of such notice. If the Issuer shall give such
notice, the Issuer shall extend the period during which such
registration statement shall be maintained effective (including the
period referred to in clause (a)) by the number of days during the
period from and including the date of the giving of notice pursuant to
clause (e) to the date when the issuer shall make available to the
Holder a prospectus supplemented or amended to conform with the
requirements of clause (e).
Section 1.5 Indemnification by the Issuer. The Issuer agrees
to indemnify and hold harmless the Holder, its officers, directors,
employees, agents, shareholders, partners, legal counsel, and
accountants and each Controlling Person of each of the foregoing from
and against any and all losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees and expenses) caused by
any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Securities (as amended or supplemented thereto) or any
preliminary prospectus or blue sky application, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
<PAGE>27
misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon
information furnished in writing to the Issuer by the Holder or on
such Holder's behalf expressly for use therein; provided that with
respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, or in any
prospectus, as the case may be, the indemnity agreement contained in
this paragraph shall not apply to the extent that any such loss,
claim, damage, liability or expense results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the
prospectus as amended or supplemented) was not sent or given to the
person asserting any such loss, claim, damage, liability or expense at
or prior to the written confirmation of the sale of the Registrable
Securities concerned to such person if it is determined that the
Issuer has provided such prospectus and it was the responsibility of
such Holder to provide such person with a current copy of the
prospectus (or such amended or supplemented prospectus, as the case
may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the
defect giving rise to such loss, claim, damage, liability or expense.
The Issuer also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each
Controlling Person of such underwriters on substantially the same
basis as that of the indemnification of the Holder provided in this
Section 1.5.
Section 1.6. Indemnification by Holder of Registrable
Securities and Underwriters. The Holder agrees to indemnify and hold
harmless the Issuer, its officers, directors, employees, agents,
shareholders, partners, legal counsel, and accountants and each
Controlling Person of the Issuer to the same extent as the foregoing
indemnity from the Issuer to the Holder, but only (i) with respect to
information furnished in writing by the Holder or on the Holder's
behalf, in each case, only with respect to information concerning the
Holder, expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement
thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 1.5
results from the fact that a current copy of the prospectus (or the
prospectus as amended or supplemented) was not sent or given to the
person asserting any such loss claim, damage, liability or expense at
or prior to the written confirmation of the sale of the Registrable
Securities concerned to such person if it is determined that it was
the responsibility of the Holder to provide such person with a current
copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) would have
cured the defect giving rise to such loss, claim, damage, liability or
expense. The Holder also agrees to indemnify and hold harmless
underwriters of the Registrable Securities, their officers and
directors and each Controlling Person of such underwriters on
substantially the same basis as that of the indemnification of the
Issuer provided in this Section 1.6 As a condition to including
Registrable Securities in any registration statement filed in
accordance with Section 1.2 or 1.3 hereof involving a Public Offering,
the Issuer may require that it shall have received an undertaking
reasonably satisfactory to it from any underwriter to indemnify and
hold it harmless to the extent customarily provided by underwriters
<PAGE>28
with respect to similar securities. Notwithstanding the provisions of
this Section 1.6, the Holder shall not be required to pay any amount
under this Section 1.6 in excess of the amount by which the total
price at which the Registrable Securities were sold to the public
exceeds the amount of any damages which the Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission.
Section 1.7. Conduct of Indemnification Proceedings. In case
any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to Section 1.5 or 1.6 hereof, such person (an
"Indemnified Party") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Party") in writing and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses; provided
that the failure of any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of its
obligations under these indemnification provisions, except to the
extent that the Indemnifying Party is materially prejudiced by such
failure to notify, or from any liabilities it may have to any
Indemnified Party otherwise than under these indemnification
provisions. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable
judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate
firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not
be liable for any settlement of any proceeding affected without its
written consent, but if settled with such consent, or if there be a
final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against
any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement
of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party
from all liability arising out of such preceding.
Section 1.8 Contribution. If the indemnification provided for
in this Agreement is unavailable to the Indemnified Parties in respect
of any losses, claims, damages, liabilities, or expenses referred to
herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable
by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses (i) as between the Issuer and the Holder of
<PAGE>29
Registrable Securities covered by a registration statement on the one
hand and the underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Issuer
and such Holder on the one hand and the underwriters on the other from
the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits but also the relative fault
of the Issuer and such Holder on the one hand and of the underwriters
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations and (ii) as between the
Issuer on the one hand and the Holder of Registrable Securities
covered by a registration statement on the other, in such proportion
as is appropriate to reflect the relative fault of the Issuer and of
the Holder in connection with such statements or omissions, as well as
any other relevant equitable considerations. The relative benefits
received by the Issuer and the Holder on the one hand and the
underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts
and commissions but before deducting expenses) received by the Issuer
and the Holder bear to the total underwriting discounts and
commissions received by the underwriters, in each case as set forth in
the table on the cover page of the prospectus. The relative fault of
the Issuer and the Holder on the one hand and of the underwriters on
the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Issuer and the Holder or by the
underwriters. The relative fault of the Issuer on the one hand and of
the Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Issuer and the
Holder agree that it would not be just and equitable if contribution
pursuant to this Section 1.8 were determined by pro-rata allocation
(even if the underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages, liabilities or expenses
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 1.8, no underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Holder's
obligation to contribute pursuant to this Section 1.8 is several in
the proportion that the proceeds of the offering received by such
Holder bears to the total proceeds of the offering received by all the
<PAGE>30
holders and not joint.
Section 1.9. Participation in Public Offering. No person may
participate in any Public Offering hereunder unless such person (a)
agrees to sell such person's securities on the basis provided in any
underwriting arrangement approved by the persons entitled hereunder to
approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably under the terms of such
underwriting arrangements and this Agreement.
Section 1.10. Other Indemnification. Indemnification similar to
that specified herein (with appropriate modifications) shall be given
by the Issuer and the Holder of Registrable Securities with respect to
any required registration or other qualification of securities under
any federal or state law or regulation or governmental authority other
than the Securities Act.
Section 1.11. Rule 144. With a view to making available the
benefits of Rule 144 under the Securities Act (or similar rule then in
effect) available to the Holder, the Issuer shall:
(a) Make and keep available adequate current public information
with respect to the Issuer within the meaning of Rule 144(c) under the
Securities Act (or similar rule then in effect);
(b) Furnish to the Holder forthwith upon request (i) a written
statement by the Issuer as to its compliance with the informational
requirements of Rule 144(c) (or similar rule then in effect) or (ii) a
copy of the most recent annual or quarterly report of the Issuer; and
(c) Comply with all other necessary filing and other requirements
so as to enable the Holder thereof to sell Registrable Securities
under Rule 144 under the Securities Act (or similar rule then in
effect).
ARTICLE II
MISCELLANEOUS
Section 2.1. Termination of Agreement. This Agreement shall
terminate on the third anniversary after the Registration Date except
as to any request for registration pursuant to Section 1.2 hereof from
the Holder received by the Issuer on or before such date and as to
incidental registration rights pursuant to Section 1.3 hereof with
respect to any registration statement filed by the Issuer on or before
the such date.
Section 2.2. Non-Assignment; Binding Effect. The Holder shall
not assign any of its rights under this Agreement without the express
written consent of the Issuer; provided, however, that the Holder may
assign, without consent, its rights hereunder to Cuddy International
Corporation or any wholly-owned subsidiary of Cuddy International
Corporation or to a creditor of the Holder to whom the Shares are
pledged, mortgaged or otherwise encumbered, all subject to the terms
and conditions of a Voting Trust Agreement, regarding the Shares,
dated the date hereof. In the event of assignment, the provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and the
Holder's transferees of Registrable Securities who execute and deliver
<PAGE>31
to the Company a counterpart of this Agreement.
Section 2.3. Severability. If any provision or provisions of
this Agreement shall be held to be invalid, illegal or unenforceable
for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement
(including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or
unenforceable.
Section 2.4. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be
telecopied or delivered against receipt to the party to whom it is to
be given at the following address (or such other address as the party
shall have furnished in writing in accordance with the provisions of
this Section):
(a) If to the Issuer:
WLR Foods, Inc.
P.O. Box 7000
Broadway, VA 22815
Attn: James L. Keeler
Fax No.: (703) 896-0498
(b) If to the Holder:
c/o Cuddy International Corporation
465 Richmond Street, Suite 600
London, Ontario Canada N6A 5P4
Attn: President
Fax No.: (519) 679-9355
Any notice or other communication given by telecopy shall be deemed
given on the first business day of the recipient after the date of the
telecopy, except for a notice changing a party's address which shall
be deemed given at the time of receipt thereof.
Section 2.5. Counterparts; Governing Law. This Agreement may
be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia
without giving effect to the conflict of laws.
Section 2.6. Modifications, Waivers. This Agreement sets forth
the entire understanding of the parties with respect to the subject
matter hereof, supersedes all existing agreements between them
concerning such subject matter, and may be modified only by a written
instrument executed by the Issuer and the Holder. Any waiver by any
<PAGE>32
party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Agreement.
The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing.
Section 2.7. Headings. The headings in this Agreement are
solely for convenience of reference and shall be given no effect in
the construction of interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed as of the day and year first above written.
WLR FOODS, INC.
By: ________________________________________
Name: James L. Keeler
Title: President
CUDDY FARMS, INC.
By:
________________________________________
Name: Vaughn L. Correll
Title: Executive Vice President 17897
<PAGE>42
FOR IMMEDIATE RELEASE Contacts: Delbert L. Seitz
Chief Financial Officer
703-896-7001
Gail E. Price, Director of
Corporate Communication
703-896-0403
WLR FOODS ANNOUNCES AGREEMENT TO ACQUIRE
CUDDY FARMS INC. FOOD DIVISION
Broadway, Virginia, July 28, 1994 WLR Foods Inc. (NASDAQ: WLRF)
today announced the signing of a definitive agreement to purchase the
turkey processing and production assets of Cuddy Farms Inc. in a
transaction that will grow WLR Foods into the nation's second largest
turkey company. WLR Foods will acquire Cuddy's three turkey
processing facilities, a feed mill and growout operations, and Cuddy's
interest in a cold storage and distribution facility, all in North
Carolina, with additional growout operations in South Carolina. Cuddy
Farms is headquartered in North Carolina and is a subsidiary of
Canada-headquartered Cuddy International.
The purchase price for the Cuddy assets is approximately $73.8 million
and includes a five-year non-competition agreement. WLR Foods will
pay $43 million in cash and issue common stock for the balance. The
transaction will be handled as a purchase of assets, and not as a
pooling of interest. The purchase price is subject to certain
post-closing adjustments which are not expected to be material.
In making the announcement, James L. Keeler, president and chief
executive officer of WLR Foods, commented: "WLR Foods has been
talking with Cuddy about this acquisition for several years, and we
are excited to have Cuddy now join the WLR Foods family and our
first-rate turkey division. The board's decision to acquire Cuddy's
more
<PAGE>43
WLR FOODS ANNOUNCES AGREEMENT TO ACQUIRE
CUDDY FARMS INC. FOOD DIVISION
July 28, 1994
Page 2
food division is another example of its commitment to building
shareholder value through smart, friendly acquisitions. We are most
pleased to expand WLR Foods significantly, especially in further
processed foods, without expanding the industry's capacity. With
Cuddy, we will become the nation's second largest turkey processor,
supplying 11% of the American turkey market sales in the coming year.
Building value for WLR Foods shareholders has been our top priority,
and we expect a positive impact on earnings per share even before
improvements and economies of scale from this acquisition are
realized. WLR Foods will achieve a billion dollars in sales in 1995,
ahead of our projected management goals."
Following the acquisition, Cuddy is expected to own between nine and
10.5% of WLR Foods outstanding common stock. According to terms of
the agreement, Cuddy's stock will be voted with recommendations of WLR
Foods board of directors for four years unless there is an earlier
change of control in WLR Foods. Peter Green, chief executive officer
of Cuddy International, will be named to the WLR Foods Board of
Directors at the closing of the acquisition, which is expected within
30 days.
Cuddy will retain its farm division, a major supplier of turkey eggs
and poults. WLR Foods is a fully integrated provider of high quality
turkey and chicken products primarily under the Wampler-Longacre(S)
label and retail ice under the Cassco(S) label. This Fortune 500
company, with current annual revenues of $720 million, exports to more
than 40 countries and has processing operations in Virginia, West
Virginia and Pennsylvania, close to its major mid-Atlantic markets.
###
<PAGE>33
Exhibit 9.1
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT, dated August 29, 1994, is made by
and among WLR FOODS, INC., a Virginia corporation (WLR Foods), CUDDY
FARMS, INC., a North Carolina corporation, its successors and assigns
(Cuddy), and CRESTAR BANK, Trustee, and its successors (Trustee) who
agree as follows. RECITALS:
A. As of the date hereof 1,183,333 shares of WLR Foods common
stock (the Shares) have been issued to the Trustee hereunder, on
behalf of Cuddy in consideration for the transfer of certain assets
pursuant to the terms of an Asset Purchase Agreement between Cuddy,
WLR Foods and others dated July 27, 1994. The parties anticipate that
additional shares of WLR Foods common stock may be issued to the
Trustee, on behalf of Cuddy, following certain post-closing
adjustments which, when issued, shall also be considered "Shares"
hereunder.
B. A condition precedent to WLR Foods' obligation to issue the
Shares was Cuddy's execution of this Agreement in order for the Cuddy
acquisition not to compromise the continuity and stability of WLR
Foods' long term business strategy and policies as effectively
confirmed by a recent vote of shareholders of WLR Foods and as
implemented and managed by WLR Foods' Board of Directors and
management.
C. The Trustee has consented to act under this Agreement for
the purposes hereunder.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
1. Transfer of Stock to Trustee. Concurrently with the
closing of the above- referenced Asset Purchase Agreement, the Shares
were issued to Trustee, on behalf of Cuddy, who shall hold the Shares
subject to the terms of this Agreement and shall issue and deliver to
Cuddy voting trust certificates for the Shares. The Trustee shall not
transfer or otherwise dispose of any of the Shares except as provided
herein.
2. Voting Trust Certificates. The voting trust certificates
shall be in substantially the same form as set forth on Exhibit A
attached hereto.
3. Transfer of Certificates. Unless otherwise agreed to in
writing by WLR Foods, the voting trust certificates are not
transferable except that (a) the holder thereof may pledge, mortgage
or otherwise encumber the certificates and the beneficiary thereof may
exercise its remedies with respect thereto and (b) the holder thereof
may transfer the certificates to Cuddy International Corporation or a
wholly-owned subsidiary of Cuddy International Corporation; provided,
however, that notwithstanding anything to the contrary contained
herein, the person or persons in whose favor such certificates are
transferred shall be bound by all of the provisions of this Agreement
as though that person were the holder and shall exercise the rights of
the voting trust certificates only in accordance with this Agreement.
In the event of any permitted transfer, the certificates shall be
<PAGE>34
transferable at the Trustee's principal office in Richmond, Virginia
(and at such other office as the Trustee may designate by an
instrument signed by it and sent by telecopy to the registered holders
of voting trust certificates), on the books of the Trustee, by the
registered owner thereof, either in person or by attorney thereto duly
authorized, upon surrender thereof, according to the rules established
for that purpose by the Trustee.
4. Term of Agreement. This Agreement shall terminate upon the
earlier of:
(a) The fourth anniversary hereof.
(b) The date on which a business acquisition by WLR Foods
occurs in which (i) in excess of five percent (5%) of its then
outstanding shares of common stock is issued without voting and
transfer restrictions similar to those set forth herein, and (ii)
Cuddy's stock ownership in WLR Foods after such business acquisition
is less than five percent (5%) of the total outstanding shares of
common stock of WLR Foods.
(c) The date on which a "Change of Control" occurs in WLR
Foods. For the purpose of this Agreement, a "Change in Control" shall
mean the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than thirty percent (30%) of either the then outstanding
shares of common stock of WLR Foods or the combined voting power of
the then outstanding voting securities of WLR Foods entitled to vote
generally in the election of directors.
(d) The date on which a complaint in bankruptcy, or for
arrangement or reorganization, or for relief under any insolvency law
is filed against WLR Foods.
(e) The date on which all shares of WLR Foods' common
stock held hereunder have been released pursuant to the terms of
Section 6 below.
WLR Foods shall promptly notify the Trustee of any
acquisition, Change of Control or insolvency described in (b), (c) or
(d) above, and the Trustee shall not be deemed to have knowledge
thereof prior to its receipt of such notification. The Trustee may
rely upon such notification and may assume that it is correct.<PAGE>
<PAGE>35
5. Termination Procedure.
(a) Immediately upon the termination of this Agreement as
provided in Section 4 above, the voting trust certificates shall cease
to have any effect, and their holders shall have no further rights
under this Voting Trust Agreement other than to receive certificates
for shares of the WLR Foods' stock or other property distributable
under the terms hereof and upon the surrender of such voting trust
certificates.
(b) Immediately upon surrender of the voting trust
certificates at the Trustee's offices, the Trustee shall deliver to
the registered holders of all voting trust certificates certificates
for the number of shares of the WLR Foods' common stock represented
thereby.
(c) If any voting trust certificate has not been
surrendered within thirty (30) days after the termination of this
Agreement, the Trustee may deposit with WLR Foods stock certificates
representing the number of shares of common stock represented by such
voting trust certificates then outstanding, with authority in writing
to WLR Foods to deliver such stock certificates in exchange for voting
trust certificates representing a like number of shares of the capital
stock of WLR Foods. Upon such deposit, all further liability of the
Trustee for the delivery of such stock certificates and the delivery
or payment of dividends upon surrender of the voting trust
certificates shall cease, and the Trustee shall not be required to
take any further action hereunder.
6. Release of Shares. The Trustee shall release the Shares
from this Agreement, free and clear of this Agreement, in either of
the following events:
(a) (i) The Trustee's receipt of a written Put Notice (as
defined in the Put and Call Agreement referred to below), properly
signed and delivered, by Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland, New York Branch"
or The Prudential Insurance Company of America, as the case may be,
pursuant to the terms of a Put and Call Agreement between the same,
the Trustee and others of even date herewith, followed by (ii) WLR
Foods' failure to make timely settlement of the put option exercised
by delivery of such written Put Notice.
(b) WLR Foods' delivery to the Trustee of voting trust
certificates, properly endorsed for transfer to WLR Foods.
The Trustee shall note on the reverse side of the stock
certificate(s) evidencing the Shares the release of the Shares from
this Agreement, which signature shall be valid and binding against all
parties hereto.
7. Dividends.
(a) Prior to the termination of this Agreement, the holder
of each voting trust certificate shall be entitled to receive payments
equal to the cash dividends, if any, received by the Trustee upon a
like number and class of shares of WLR Foods' common stock as is
called for by each voting trust certificate. If any dividend in
respect of the stock deposited with the Trustee is paid, in whole or
in part, in WLR Foods' common stock, the Trustee shall hold, subject
to the terms of this Agreement, the certificates for stock which are
<PAGE>36
received by it on account of such dividend. In the event of a
dividend payable in cash or stock at the shareholder's election, the
Trustee shall make such election upon the direction of the registered
holder of the voting trust certificate, or, in the absence of such
direction at the time the Trustee makes such election, shall elect a
cash dividend payment. The holder of each voting trust certificate
representing stock on which such stock dividend has been paid shall be
entitled to receive a voting trust certificate issued under this
Agreement for the number of shares and class of stock received as such
dividend with respect to the shares represented by such voting trust
certificate. Holders entitled to receive the dividends described
above shall be those registered as such on the Trustee's transfer
books at the close of business on the day fixed by WLR Foods for the
taking of a record to determine those holders of its stock entitled to
receive such dividends. WLR Foods shall promptly notify the Trustee
of the day so fixed.
(b) If any dividend in respect of the stock deposited with
the Trustee is paid other than in cash or in common stock, then the
Trustee shall distribute the same among the holders of voting trust
certificates registered as such on the Trustee's transfer books at the
close of business on the day fixed by WLR Foods for the taking of a
record to determine those holders of its stock entitled to receive
such dividends.
(c) In lieu of receiving cash dividends upon the common
stock of WLR Foods and paying the same to the holders of voting trust
certificates pursuant to the provisions of this Agreement, the Trustee
may instruct WLR Foods in writing to pay such dividends to the holders
of the voting trust certificates. Upon receipt of such written
instructions, WLR Foods shall pay such dividends directly to the
holders of the voting trust certificates. Upon such instructions
being given by the Trustee, all liability of the Trustee with respect
to such dividends shall cease. The Trustee may at any time revoke
such instructions and by written notice to WLR Foods direct it to make
dividend payments to the Trustee. WLR Foods shall promptly notify the
Trustee of the day so fixed.
(d) Any federal or state filings necessary to be made by
virtue of the Trustee payment, if any, of dividends or other
distributions hereunder shall be timely made by the Trustee.
8. Rights of Trustee.
(a) Until the actual delivery to the holders of voting
trust certificates issued hereunder of stock certificates in exchange
therefor, and until the surrender of the voting trust certificates for
cancellation, the Trustee shall have the right, subject to the
provisions hereof, including, without limitation, paragraph (b) below,
to exercise, in person or by his nominees or proxies, all stockholder
voting rights and powers in respect of all stock deposited hereunder,
and to take part in or consent to any corporate or stockholder action
of any kind whatsoever. The right to vote shall include the right to
vote for the election of directors, and in favor of or against any
resolution or proposed action of any character whatsoever, which may
be presented at any meeting or require the consent of the WLR Foods'
stockholders. Without limiting such general right, it is understood
that such action or proceeding may include, mortgaging, creating a
security interest in, and pledging of all or any part of the WLR
Foods' property, the lease or sale of all or any part of its property,
<PAGE>37
for cash, securities, or other property, and the dissolution of WLR
Foods, or its consolidation, merger, reorganization, or
recapitalization.
(b) In voting the stock held by him hereunder either in
person or by his nominees or proxies, the Trustee shall vote in
accordance with the recommendation of the WLR Foods' Board of
Directors as it exists at the time of the vote of WLR Foods'
shareholders, or if there is no such recommendation, as directed by
the registered voting trust certificate holder. Such recommendation
or direction shall be communicated to the Trustee in the form of a
written certificate signed (i) in the case of such recommendation, by
an officer of WLR Foods, and (ii) in the case of such direction, by
such holder. The Trustee may rely upon such certificate and may
assume that the information contained therein is correct. In the
absence of such a recommendation or direction, the Trustee shall not
vote such stock.
9. Trustees.
(a) The Trustee (and any successor Trustee) may at any time
resign by mailing to WLR Foods and the registered holders of voting
trust certificates a written resignation, to take effect ten (10) days
thereafter or upon its prior acceptance. In the event of resignation,
a successor Trustee shall be mutually acceptable to, and designated
by, WLR Foods and Cuddy, or, in the absence of an agreement between
the parties, designated by an independent third party selected by
them. No person or entity shall be named as successor Trustee who is
restricted from voting WLR Foods common stock by any other law,
agreement or regulatory or judicial order.
(b) The rights, powers, and privileges of the Trustee named
hereunder shall be possessed by the successor Trustees, with the same
effect as though such successors had originally been parties to this
Agreement. The word "Trustee," as used in this Agreement, means the
Trustee or any successor Trustees acting hereunder, and shall include
both the single and the plural number.
10. Compensation and Reimbursement of Trustee. WLR Foods shall
pay the Trustee an Acceptance Fee of $1,000 upon its execution hereof
and, thereafter, upon each anniversary of this Agreement, WLR Foods
shall pay the Trustee an annual fee of $750. The Trustee shall have
the right to incur and pay such reasonable expenses and charges, to
employ and pay such agents, attorneys, and counsel as it may deem
necessary and proper to effectuate this Agreement. All such expenses
or charges incurred by and due to the Trustee shall be reimbursed by
WLR Foods.
11. Indemnification. WLR Foods shall indemnify and hold
harmless each of Cuddy and the Trustee and their respective officers,
directors, employees, shareholders, partners, agents, legal counsel
and accountants (each an "Indemnitee" and together the "Indemnitees")
to the fullest extent permitted by applicable law in effect on the
date hereof or as such laws may from time to time be amended from and
against any and all losses, claims, damages, liabilities and expenses
(including attorneys' fees and expenses and any and all expenses
whatsoever incurred in investigating, preparing or defending any
action, suit, investigation or proceeding), and amounts paid in
<PAGE>38
settlement (together, "Losses") incurred by an Indemnitee if such
Indemnitee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, investigation or
proceeding, whether civil, criminal, administrative or investigation
in nature, arising from, caused by or in connection with the
negotiation, execution, delivery and performance of this Agreement
(including any other agreements entered into in connection herewith),
other than as a result of the breach by the Indemnitee of any terms of
this Agreement or such agreements.
12. Notice.
(a) Unless otherwise specifically provided herein, any
notice to or communication with any party hereto or the holders of the
voting trust certificates hereunder shall be deemed to be sufficiently
given or made if telecopied or delivered against receipt to the party
to whom it is to be given at the following address (or such other
address as the party shall have furnished in writing in accordance
with this Section):
(i) If to Cuddy or Cuddy International Corporation, at
Cuddy International Corporation
465 Richmond Street, Suite 600
London, Ontario Canada N6A 5P4
Attn: President
Fax No.: (519) 679-9355
(ii) If to WLR Foods, at
WLR Foods, Inc.
P.O. Box 7000
Broadway, VA 22815
Attn: President
Fax No.: (703) 896-0498
(iii)It to the Trustee, at
Crestar Bank
Corporate Trust Administration
10th Floor
919 E. Main Street
Richmond, VA 23219
Fax No.: 804-782-7855
(b) All distributions of cash, securities, or other
property hereunder by the Trustee to the holders of voting trust
certificates shall be made, in the Trustee's discretion, by overnight
delivery to the addresses set forth above.
13. Modifications and Non-Waiver. This Agreement may be
modified only by a written instrument executed by Cuddy, WLR Foods and
the Trustee; provided, however, that the Trustee's consent shall not
be necessary to modifications except as they expressly relate to its
duties, fees, indemnification and right to resign or otherwise
adversely affect the Trustee. No delay or failure by a party to
exercise any right under this Agreement, and no partial or single
exercise of that right, shall constitute a waiver of that or any other
right, unless otherwise expressly provided herein.
<PAGE>39
14. Headings. Headings in this Agreement are for convenience
only and shall not be used to interpret or construe its provisions.
15. Governing Law; Venue. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Virginia
applicable to agreements made and to be performed entirely within the
Commonwealth. The Circuit Court of the County of Rockingham, Virginia
or the United States District Court for the Western District of
Virginia, Harrisonburg Division, as appropriate, shall have exclusive
jurisdiction and venue over any claims or causes of action concerning
this Agreement.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
17. Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of each of the parties and their
respective legal representatives, successors and assigns.
18. Securities Matters. The Trustee will cause all filings
required to be made by it under applicable federal and state
securities laws by reason of the Trustee's ownership or holding of the
Shares or the performance of the Trustee's duties hereunder. The
Trustee shall not be deemed to be, and neither WLR Foods nor Cuddy
shall treat the Trustee as, a beneficial owner of any of the Shares
for purposes of Section 13(d) or 13(g) of the Securities Exchange Act
of 1934.
IN WITNESS WHEREOF, the parties have caused this Voting Trust
Agreement to be executed by their respective officers hereunto duly
authorized as of the day and year first above written.
CUDDY FARMS, INC., a North Carolina
corporation
By:________________________________________
Its President
WLR FOODS, INC., a Virginia corporation
By_________________________________________
Its President
CRESTAR BANK
By_________________________________________
Its _____________________
20913
<PAGE>
<PAGE>40
No.________________ Shares _____________
WLR Foods, Inc.
a Virginia corporation
Voting Trust Certificate for Common Stock
This certifies that Cuddy Farms, Inc., or registered assigns, is
entitled to all benefits arising from the deposit with the Trustee
under the Voting Trust Agreement hereinafter mentioned of certificates
for ____________ shares of WLR Foods, Inc., a Virginia corporation
(WLR Foods), as provided in such Voting Trust Agreement and subject to
the terms thereof. The registered holder hereof, or assigns, is
entitled to receive payment equal to the amount of cash dividends, if
any, received by the Trustee upon the number of shares of common stock
of WLR Foods in respect of which this certificate is issued.
Dividends received by the Trustee in WLR Foods' common stock shall be
payable in voting trust certificates, in form similar hereto. Until
the Trustee has delivered the stock held under such Voting Trust
Agreement to the holders of the trust certificates, or to WLR Foods,
as specified in such Voting Trust Agreement, the Trustee shall possess
and be entitled to exercise all rights and powers of an absolute owner
of such stock, including the right to vote thereon for every purpose
according to and as restricted by the terms of the Voting Trust
Agreement, and to execute consents in respect thereof for every
purpose, it being expressly stipulated that no voting right passes to
the owner hereof, or assigns, under this certificate or any agreement,
expressed or implied.
This certificate is issued, received, and held under, and the rights
of the owner hereof are subject to, the terms of a Voting Trust
Agreement dated August 29, 1994 by and between WLR Foods, Cuddy Farms,
Inc., its successors and assigns, and Crestar Bank, Trustee and its
successors, a copy of which is on file with WLR Foods, Inc. The
holder of this certificate, by acceptance hereof, assents and is bound
to all the provisions of the Voting Trust Agreement.
In the event that the Trustee receives any dividend or distribution
other than in cash or WLR Foods' common stock, the Trustee shall
distribute the same to the registered holders of voting trust
certificates pursuant to the provisions of the Voting Trust Agreement.
The Voting Trust Agreement shall continue in full force and effect
until the earlier of August 29, 1998, a change of control, and certain
other events, as provided in the Voting Trust Agreement. Stock
certificates for the number of shares of common stock then represented
by this certificate, or the net proceeds in cash or property of such
shares, shall be due and deliverable hereunder upon the termination of
such Voting Trust Agreement as provided therein.
Except as provided in the Voting Trust Agreement, this certificate is
not transferable except that the holder hereof may pledge, mortgage or
otherwise encumber the certificates and the beneficiary thereof may
exercise its remedies with respect thereto; provided, however, that
the person or persons in whose favor such certificates are transferred
shall be bound by all of the provisions of the Voting Trust Agreement
as though they were the holder and shall exercise the rights of this
certificate only in accordance therewith. In the event of any
transfer by virtue of a pledge, mortgage or encumbrance, the
<PAGE>41
certificates shall be transferable at the Trustee's principal office
(set forth in the Voting Trust Agreement) on the books of the Trustee,
by the registered owner thereof, either in person or by attorney
thereto duly authorized, upon surrender thereof, according to the
rules established for that purpose by the Trustee.
This certificate shall not be valid for any purpose until duly signed
by the Trustee.
The word "Trustee" as used in this certificate means the Trustee or
the successor trustee acting under such Voting Trust Agreement.
In witness whereof the Trustee has signed this certificate on August
29, 1994.
_____________________________________
Trustee
(Form of Assignment):
For value received ________________________ hereby assigns the within
certificate, and all rights and interests represented thereby, to
______________________ and appoints __________________ attorney to
transfer this certificate on the books of the Trustee mentioned
therein, with full power of substitution.
Dated: ____________________
______________________________ _______________________________(SEAL)
Witness
EXCEPT AS PERMITTED BY OF THE VOTING TRUST AGREEMENT
AND SUBJECT TO A PUT AND CALL AGREEMENT DATED AUGUST 29, 1994, THIS
VOTING TRUST CERTIFICATE MAY NOT BE TRANSFERRED
WITHOUT THE EXPRESS WRITTEN CONSENT OF WLR FOODS, INC.
