<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PILGRIM'S PRIDE CORPORATION
.............................................................................
(Name of Registrant as Specified In Its Charter)
PILGRIM'S PRIDE CORPORATION
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
......................................................
2) Form, Schedule or Registration Statement No.:
......................................................
3) Filing Party:
......................................................
4) Date Filed:
......................................................
Notes:
<PAGE>
PILGRIM'S PRIDE CORPORATION
110 SOUTH TEXAS STREET
PITTSBURG, TEXAS 75686
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, FEBRUARY 2, 1994
The Annual Meeting of Stockholders of Pilgrim's Pride Corporation (the
"Company") will be held at the Company's headquarters building, 110 South Texas
Street, Pittsburg, Texas, Wednesday, February 2, 1994, at 11:00 a.m., local
time, to consider the following matters:
1. The election of ten Directors for the ensuing year;
2. The appointment of Ernst & Young as the Company's independent auditors
for the fiscal year ending October 1, 1994;
3. To transact such other business as may be properly brought before the
meeting or any adjournment. No other matters are expected to be voted on at
the meeting.
The Board of Directors has fixed the close of business on December 20, 1993,
as the record date for determining stockholders of record entitled to notice
of, and to vote at, the meeting.
(SIGNATURE OF CLIFFORD E. BUTLER)
Clifford E. Butler
Pittsburg, Texas Vice Chairman, Chief Financial
January 7, 1994 Officer,
Secretary and Treasurer
YOUR VOTE IS IMPORTANT!
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY.
<PAGE>
PILGRIM'S PRIDE CORPORATION
110 SOUTH TEXAS STREET
PITTSBURG, TEXAS 75686
---------------------
PROXY STATEMENT
---------------------
GENERAL INFORMATION
The Board of Directors of Pilgrim's Pride Corporation (the "Company")
solicits stockholders' proxies in the accompanying form for use at the Annual
Meeting of Stockholders to be held on February 2, 1994, at 11:00 A.M., local
time, at the Company's headquarters at 110 South Texas Street, Pittsburg, Texas
and at any adjournments thereof (the "Meeting"). This Proxy Statement, the
accompanying proxy card and the Company's 1993 Annual Report to Stockholders
are being mailed, beginning on or about January 7, 1994, to all stockholders
entitled to receive notice of, and to vote at, the Meeting.
The principal executive offices of the Company are located at 110 South Texas
Street, Pittsburg, Texas 75686. Any writing required to be sent to the Company
should be mailed to this address.
OUTSTANDING VOTING SECURITIES
Each stockholder of record at the close of business on December 20, 1993 (the
"Record Date"), will be entitled to one vote for each share of the Company's
common stock held on the Record Date. The accompanying proxy card indicates the
number of shares to be voted. On December 20, 1993, 27,589,250 shares of the
Company's common stock were issued and outstanding.
VOTING OF PROXIES
Because many of the Company's stockholders are unable to attend the Meeting,
the Board of Directors solicits proxies by mail to give each stockholder an
opportunity to vote on all items of business scheduled to come before the
Meeting. Each stockholder is urged to:
(1) read carefully the material in this Proxy Statement;
(2) specify his or her voting instruction on each item by marking the
appropriate boxes on the accompanying proxy card; and
(3) sign, date and return the card in the enclosed, postage prepaid
envelope.
The accompanying proxy card provides a space, with respect to the election of
Directors, for a stockholder to withhold voting for any or all nominees for the
Board of Directors, but does not permit a stockholder to vote for any nominee
not named on the proxy card. The card also allows a stockholder to abstain from
voting on any item if the stockholder chooses to do so.
When the accompanying proxy card is properly executed and returned with
voting instructions with respect to any of the items to be voted upon, the
shares represented by the proxy will be voted in accordance with the
stockholder's directions by the persons named on the card as proxies of the
stockholders. If a proxy card is signed and returned, but no specific voting
instructions are given, the shares represented by the proxy card will be voted
for the election of the ten nominees for Directors named on the accompanying
proxy card and for the appointment of Ernst & Young as the Company's
independent auditors.
Unless otherwise indicated by the stockholder, returned proxy cards also
confer upon the persons named on the card, as proxies for the stockholder,
discretionary authority to vote all shares of stock represented by the proxy
card on any item of business that is properly presented for action at the
Meeting, even if not described in this Proxy Statement. If any of the nominees
for Director named below should be unable or unwilling to accept nomination,
the proxies will be voted for the election of such other person as may be
recommended by the Board of Directors. The Board of Directors, however, has no
reason to believe that any
<PAGE>
item of business not set forth in this Proxy Statement will come before the
Meeting or that any of the nominees for Director will be unavailable for
election.
The proxy does not affect a stockholder's right to vote in person at the
Meeting. If a stockholder executes a proxy, he or she may revoke it at any time
before it is voted by submitting a new proxy card, or by communicating his or
her revocation in writing to the Secretary of the Company or by voting by
ballot at the Meeting.
VOTES REQUIRED
The holders of at least a majority of the shares of the Company's common
stock outstanding on the Record Date must be present in person or by proxy at
the Meeting for the Meeting to be held. Abstentions and broker non-votes are
counted in determining whether at least a majority of the shares of the
Company's common stock outstanding on the Record Date are present at the
Meeting. Directors will be elected by a plurality of the votes cast at the
Meeting. The affirmative vote of a majority of the shares represented and
entitled to vote at the Meeting is required for the appointment of the
Company's independent auditors and approval of any other item of business to be
voted upon at the Meeting. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
Lonnie A. "Bo" Pilgrim owned or controlled 18,007,353 shares (65.3%) of the
Company's common stock on the Record Date and thus will be able to elect all of
the nominees for Directors and to approve Ernst & Young as independent auditors
for the Company.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Under the rules of the Securities and Exchange Commission, in order to be
included in the Company's Proxy Statement for the 1995 Annual Meeting of
Stockholders, a stockholder proposal must be received by the Secretary of the
Company no later than the close of business on September 9, 1994.
COST OF PROXY SOLICITATION
The Company will bear the cost of the Meeting and the cost of soliciting
proxies in the accompanying form, including the cost of mailing the proxy
material. In addition to solicitation by mail, Directors, officers and other
employees of the Company may solicit proxies by telephone or otherwise. They
will not be specifically compensated for such services. The Company will
request brokers and other custodians, nominees and fiduciaries to forward
proxies and proxy soliciting material to the beneficial owners of the Company's
common stock and to secure their voting instructions, if necessary. The Company
will reimburse them for the expenses in so doing.
BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. However, it
is not involved in day-to-day operating details. Members of the Board are kept
informed of the Company's business through discussions with the Chairman and
other officers, by reviewing analyses and reports sent to them each month, as
well as by participating in Board and committee meetings.
BOARD COMMITTEES
To assist in carrying out its duties, the Board of Directors has delegated
certain authority to the Audit and Compensation Committees. The members of the
Audit Committee are Robert E. Hilgenfeld, Vance C. Miller and James G. Vetter,
Jr. The members of the Compensation Committee are Lonnie A. "Bo" Pilgrim,
Robert E. Hilgenfeld, Vance C. Miller, James G. Vetter, Jr. and Donald L. Wass.
Each Committee meets to examine various facets of the Company's operations and
take appropriate action or make recommendations to the Board of Directors. The
Audit Committee's responsibilities include making recommendations to the Board
of Directors regarding the selection of independent public accountants and
reviewing the plan and results of the audit performed by the public accountants
of the Company and the adequacy of the Company's systems of internal accounting
controls, and monitoring compliance with the Company's conflicts of interest
and business ethics policies. The Compensation Committee reviews the Company's
remuneration policies and practices and establishes the salaries of the
Company's officers.
2
<PAGE>
MEETINGS
During the Company's fiscal year ending October 2, 1993, there were six
meetings of the Board of Directors, two meetings of the Audit Committee, and
one meeting of the Compensation Committee. Each member of the Board of
Directors attended at least 75% of the aggregate number of meetings of the
Board and Board Committees on which the Director served.
ELECTION OF DIRECTORS
At the meeting, ten Directors are to be elected, each to hold office for one
year or until his successor is duly elected and qualified. It is intended that
the shares represented by the enclosed proxy will be voted for the election of
the ten nominees named below. The Board of Directors has no reason to believe
that any nominee will be unable to serve if elected. In the event any nominee
shall become unavailable for election, it is intended that such shares will be
voted for the election of a substitute nominee selected by the Board of
Directors.
NOMINEES FOR DIRECTOR
The following information sets forth the name and principal occupation of
each Director and nominee for Director, his age, his position with the Company
and the date he first became a Director and an executive officer.
LONNIE A. "BO" PILGRIM, 65, has served as Chairman of the Board and Chief
Executive Officer since the organization of the Company in 1968. Prior to the
incorporation of the Company, Mr. Pilgrim was a partner in the Company's
predecessor partnership business founded in 1945.
CLIFFORD E. BUTLER, 51, has been employed by the Company since 1969. He has
been a Director of the Company since 1969, was named Senior Vice President of
Finance in 1973, and became Chief Financial Officer and Vice Chairman of the
Board in July 1983.
LINDY M. "BUDDY" PILGRIM, 39, has been employed by the Company as President
of U.S. Operations, Sales and Marketing since April 1983, and was elected a
Director on March 8, 1993. Up to October 1990, Mr. Pilgrim was employed by the
Company for twelve years in marketing and nine years in operations. From
October 1990 to April 1993, he was President of Integrity Management Services,
Inc., a consulting firm to the poultry industry. He is a nephew of Lonnie A.
"Bo" Pilgrim.
MONTY K. HENDERSON, 46, has been President and Chief Operating Officer of the
Company since August 7, 1992. He was previously a Senior Vice President,
Arkansas Complex Manager for the Company for ten years. Prior to that he was
employed by Mountaire Corporation of DeQueen, Arkansas until it was acquired by
the Company in 1981. He has been a Director of the Company since September 30,
1992.
JAMES J. MINER, PH.D., 65 has been employed by the Company and its
predecessor partnership since 1966 and has a been a Senior Vice President
responsible for live production and feed nutrition and a Director since the
incorporation of the Company in 1968.
LONNIE KEN PILGRIM, 35, has been employed by the Company since 1977 and has
served the Company as its Director of Transportation and as a member of the
Board of Directors since March 1985. He is the son of Lonnie A. "Bo" Pilgrim.
JAMES G. VETTER, JR., 59, has practiced law in Dallas, Texas since 1966. He
is a member of the Dallas law firm of Godwin & Carlton, P.C., and has served as
general counsel and a Director since 1981. Mr. Vetter is a Board Certified-Tax
Law Specialist and serves as a lecturer and author in tax matters.
ROBERT E. HILGENFELD, 68, was elected a Director in September 1986. Mr.
Hilgenfeld was Senior Vice President--Marketing/Processing for the Company from
1969 to 1972 and for seventeen years prior to that worked in various sales and
management positions for the Quaker Oats Company. From 1972 until April 1986,
he was employed by Church's Fried Chicken Company ("Church's") as Vice
President--Purchasing Group, Vice President and Senior Vice President. He was
elected a Director of Church's in 1985 and retired
3
<PAGE>
from Church's in April 1986. Since retirement he has served as a consultant to
various companies including the Company.
VANCE C. MILLER, 59, was elected a Director in September 1986. Mr. Miller has
been Chairman of Vance C. Miller Interests, a real estate company formed in
1977 and has served as the Chairman of the Executive Committee and as a
director of Henry S. Miller Co., a real estate brokerage firm, since 1980.
DONALD L. WASS, PH.D., 61, was elected a Director of the Company in May 1987.
He has been President of the William Oncken Company of Texas, a time management
consulting company, since 1970.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1993, the members of the Company's Compensation Committee were:
Lonnie A. "Bo" Pilgrim, Robert E. Hilgenfeld, Vance C. Miller, James G. Vetter,
Jr. and Donald L. Wass.
The Company has been and continues to be a party to certain transactions with
Lonnie A. "Bo" Pilgrim and a law firm affiliated with James G. Vetter, Jr.
These transactions, along with all other transactions between the Company and
affiliated persons, require the prior approval of the Audit Committee of the
Board of Directors.
The Company's transactions with Lonnie A. "Bo" Pilgrim, Chairman of the Board
and Chief Executive Officer of the Company, have allowed the Company to obtain
the use of required production facilities and equipment on terms which
management believes are not less favorable to the Company than could have been
arranged with unaffiliated persons. Since 1985, Lonnie A. "Bo" Pilgrim,
Chairman of the Board and Chief Executive Officer of the Company, has engaged
in chicken grow-out operations with the Company which involve the purchase of
chicks, feed and veterinary and technical services from the Company and the
growing-out of chickens to maturity at which time they are purchased by the
Company. Chicks, feed and services are purchased from the Company for their
fair market value, and the Company purchases the mature chickens from Mr.
Pilgrim at market-quoted prices at the time of purchase. Management of the
Company believes that this operation is conducted on terms not less favorable
than those which could be arranged with unaffiliated persons. During fiscal
year 1993, the Company paid Mr. Pilgrim, doing business as Pilgrim Poultry G.P.
("PPGP"), $8,275,000 for chickens produced in his grow-out operations, and PPGP
paid the Company $8,298,000 for chicks, feed and services. Lonnie A. "Bo"
Pilgrim is the sole proprietor of PPGP.
PPGP also produces eggs for the Company. In addition to the chicken grow-out
operations described above, PPGP contracts with the Company to house and care
for Company flocks used for egg production and is paid an egg grower fee based
on actual production. The egg grower contract between PPGP and the Company
renews automatically as each expended flock of laying hens is replaced by a new
flock. The contract is cancelable by either party at any time prior to the time
when the then current producing flock is 48 weeks old. Flocks are normally
replaced every 14 months. Management of the Company believes that these
relationships are on terms not less favorable to the Company than those which
could be arranged with unaffiliated persons. During fiscal year 1993 the
Company paid contract egg growers' fees to PPGP of $4,739,000.
Since 1985, the Company has leased an airplane from Mr. Pilgrim under a lease
agreement which provides for monthly lease payments of $33,000 plus operating
expenses, which terms management of the Company believes to be substantially
similar to those obtainable from unaffiliated parties. During fiscal 1993, the
Company had lease expenses of $396,000 and operating expenses of $108,000
associated with the use of this airplane.
Historically, much of the Company's debt has been guaranteed by the major
stockholders of the Company. In consideration of such guarantees, the Company
has paid such stockholders a quarterly fee equal to .25% of the average
aggregate outstanding balance of such guaranteed debt. During fiscal 1993, the
Company incurred $1,192,000 for such guarantees and as of fiscal year-end had
paid $425,000 to Lonnie A.
4
<PAGE>
"Bo" Pilgrim and $25,000 to each of his three children (including Lonnie Ken
Pilgrim, a Director of the Company).
Godwin & Carlton, P.C., has represented and currently represents the Company
in connection with a variety of legal matters. James G. Vetter, Jr., is a
Director of the Company and is an Executive Vice President of Godwin & Carlton,
P.C. During fiscal year 1993, the Company paid Godwin & Carlton, P.C., legal
fees of $284,000 in connection with such matters.
Mr. Hilgenfeld, a member of the Company's Compensation Committee, served as
an officer of the Company prior to 1973.
COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation paid to the
Company's Chief Executive Officer and its four other most highly compensated
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------
OTHER ALL
FISCAL ANNUAL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(A) COMPENSATION(B)
- - --------------------------- ------ -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Lonnie A. Pilgrim....... 1993 $341,192 $298,669 $ -- $ 52
Chairman of the Board
and 1992 312,000 100,000 -- 52
Chief Executive Officer 1991 226,890 90,522 -- 1,659
Cliff Butler............ 1993 208,619 182,594 5,244 312
Vice Chairman of the 1992 200,200 100,000 5,009 312
Board and Chief 1991 176,664 71,315 4,385 1,392
Financial Officer,
Secretary and Treasurer
Monty Henderson......... 1993 208,619 182,594 3,849 312
President and Chief 1992 138,100 -- 2,550 312
Operating Officer 1991 117,576 47,480 2,600 900
Lindy M. Pilgrim........ 1993 144,000 144,000 3,450 138
President of U.S. 1992 -- -- -- --
Operations and Sales & 1991 -- -- -- --
Marketing
David Van Hoose......... 1993 131,500 115,043 2,953 33,312
President, Mexican 1992 130,000 -- 2,000 24,312
Operations 1991 117,850 47,480 2,080 24,000
</TABLE>
- - ---------------------
(a) Represents the Company's contributions under the Employee Stock Investment
Plan under which eligible employees may authorize payroll deductions of up
to 7 1/2% of their base salary and the Company will contribute an amount
equal to 33 1/3% of such deductions, all to be invested in common stock of
the Company with purchase commission paid by the Company to the Plan's
administrator, Shearson Lehman Hutton, Inc.
(b) Represents the Company's contributions under its qualified non-contributory
profit-sharing plan (which was converted into the section 401(k) Salary
Deferral Plan on July 1, 1991) and its Section 401(k) Salary Deferral Plan
and foreign housing allowances.
DIRECTORS' FEES
The Company pays its Directors who are not employees of the Company $4,000
per meeting attended, plus expenses.
5
<PAGE>
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee establishes executive compensation and oversees
the administration of the bonus plan for key members of management and the
Company's employee benefit plans.
In accordance with recently adopted rules designed to enhance disclosure of
the Company's policies toward executive compensation, the following is a report
submitted by the Compensation Committee members in their capacity as the
Board's Compensation Committee, addressing the Company's compensation policy as
it related to the named executive officers for fiscal 1993.
PERFORMANCE MEASURES
The Compensation Committees' establishment of annual executive compensation
is a subjective process in which the Committee considers many factors including
the Company's performance as measured by earnings for the year, each
executive's specific responsibilities, the contribution to the Company's
profitability by each executive's specific areas of responsibility and the
executive's length of time with the Company.
FISCAL 1993 COMPENSATION
For fiscal 1993, the Company's executive compensation program consisted of
(a) base salary, (b) a bonus based upon the performance measurements described
above and bonus plan described below, (c) Company contributions to the
Company's 401(k) salary deferral plan which are made up of mandatory
contributions of one dollar per week and matching contributions of up to five
dollars per week and additional matching contributions of up to four percent of
an executive's compensation subject to an overall Company contribution limit of
five percent of income before taxes and (d) Company contributions to the
Employee Stock Investment Plan in an amount equal to 33 1/3 percent of the
officers' payroll deduction for purchases of the Company's common stock under
the plan, which deductions are limited to 7 1/2 percent of the officer's base
pay.
In establishing the fiscal 1993 compensation of Lonnie A Pilgrim, the
Company's Chief Executive Officer, the compensation committee took particular
note of the record earnings in fiscal 1993.
The Company's objective is to obtain financial performance that achieves
increased return on equity, sales volume, earnings per share and net income.
The performance oriented nature of the Company's compensation program is
exemplified by the increase in earnings between fiscal 1992 and 1993 and the
related increased bonuses paid to the Company's Chief Executive Officer and
Chief Financial Officer.
The Committee believes that linking executive compensation to corporate
performance results in a better alignment of compensation with corporate goals
and shareholder interests.
The Company maintains a bonus plan which provides for 5% of the Company's
income before income taxes to be allocated among certain key members of
management. Such amount is allocated among all plan participants based upon the
ratio of each participant's salary to the aggregate salaries of all
participants and the number of months of the fiscal year the participant was
approved for participation. Currently, there are 13 participants in the plan,
including the Chairman of the Board, the President, U.S. Operations Sales and
Marketing, the President and Chief Operating Officer, the Chief Financial
Officer, Senior Vice Presidents and two other designated key employees.
Participants may be added or removed from the plan at the discretion of the
Compensation Committee. Participants must continue to be employed by the
Company on January 1 following the end of a fiscal year in order to be paid a
bonus with respect to that year. Bonuses are typically paid during the January
following the fiscal year with respect to which the bonus has been granted.
Lonnie A. "Bo" Pilgrim
Robert E. Hilgenfeld
Vance C. Miller
James G. Vetter, Jr.
Donald L. Wass
6
<PAGE>
COMPANY PERFORMANCE
The following graph shows a five year comparison of cumulative total returns
for the Company, the Russell 2000 composite index and an index of peer
companies selected by the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG PILGRIM'S PRIDE CORPORATION, THE RUSSELL 2000 INDEX AND A PEER GROUP
[PERFORMANCE GRAPH TO COME]
S T A R Services, Inc. Total Return - Data Summary
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------------------------
10/88 9/89 9/90 9/91 9/92 10/93
<S> <C> <C> <C> <C> <C> <C>
Pilgrims Pride Corp 100 162 97 115 108 140
Peer Group 100 152 91 101 108 152
Russell 2000 100 122 89 128 140 187
</TABLE>
The total cumulative return on investment (change in the year end stock price
plus reinvested dividends) for each of the periods for the Company, the Russell
2000 composite index and the peer group is based on the stock price or
composite index at the end of fiscal 1988.
The above graph compares the performance of the Company with that of the
Russell 2000 composite index and a group of peer companies with the investment
weighted on market capitalization. Companies in the peer group are as follows:
Golden Poultry Company, Inc., Hudson Foods, Inc., Sanderson Farms, Inc.,
Cagles, Inc. and the Company. These companies were approved by the Compensation
Committee.
7
<PAGE>
CERTAIN OTHER TRANSACTIONS
The Company has entered into chicken grower contracts involving farms owned
by certain of its officers, providing the placement of Company-owned flocks on
their farms during the grow-out phase of production. The contracts are on terms
substantially the same as contracts entered into by the Company with
unaffiliated parties and can be terminated by either party upon completion of
the grow-out of each flock. The aggregate amounts paid by the Company to its
officers and Directors under grower contracts during the fiscal year 1993 were
as follows: Clifford E. Butler--$190,022, James J. Miner--$186,647 and Monty K.
Henderson--$5,418. See "Compensation Committee Interlocks and Insider
Participation" for a discussion of the Company's transactions with Lonnie A.
"Bo" Pilgrim, Lonnie Ken Pilgrim and Mr. Vetter.
On June 25, 1992, the Company sold 5 million shares of its common stock to
Archer-Daniels-Midland Company ("ADM") for $30 million, or $6.00 per share. See
"Security Ownership" below for ADM's current ownership. ADM is one of several
vendors selling feed ingredients to the Company in the ordinary course of
business. Between September 26, 1992, and October 2, 1993, the Company
purchased $37.8 million of feed ingredients from ADM. The Company purchases
such feed at prices based on the quoted market prices for such ingredients.
SECURITY OWNERSHIP
The following table sets forth, as of December 10, 1993, certain information
with respect to the beneficial ownership of the Company's common stock by (i)
each stockholder beneficially owning at least 5% of the Company's outstanding
common stock; (ii) each director of the Company who is a stockholder of the
Company; (iii) each of the executive officers listed in the executive
compensation table who is a stockholder of the Company; and (iv) all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNERS OWNERSHIP CLASS
------------------------- ---------- -------
<S> <C> <C>
Lonnie A. "Bo" Pilgrim(a)(b)(c)(d)(e).................... 18,007,353 65.3%
110 South Texas Street
Pittsburg, Texas 75686
Archer-Daniels-Midland Company(f)........................ 5,514,900 20.0
P.O. Box 1470
Decatur, Illinois
Lonnie Ken Pilgrim(a)(c)(d).............................. 521,647 1.9
Clifford E. Butler(d).................................... 16,729 (g)
Lindy M. "Buddy" Pilgrim................................. 3,858 (g)
Monty K. Henderson(d).................................... 12,122 (g)
David Van Hoose(d)....................................... 12,989 (g)
James J. Miner(d)........................................ 6,867 (g)
James G. Vetter, Jr. .................................... 1,450 (g)
Donald L. Wass........................................... 100 (g)
All executive officers and directors as a group (18) per- 18,080,993 65.5%
sons....................................................
</TABLE>
- - ---------------------
(a) Includes 60,387 shares held of record by Pilgrim Family Trust I, an
irrevocable trust dated June 16, 1987, for the benefit of Lonnie A. "Bo"
Pilgrim's surviving spouse and children, of which Lonnie Ken Pilgrim and
Patty R. Pilgrim, Lonnie A. "Bo" Pilgrim's wife, are co-trustees, and
60,386 shares held of record by Pilgrim Family Trust II, an irrevocable
trust dated December 23, 1987, for the benefit of Lonnie A. "Bo" Pilgrim
and his children, of which Lonnie A. "Bo" Pilgrim and Lonnie Ken Pilgrim
are co-trustees. Mr. Lonnie A. "Bo" Pilgrim disclaims any beneficial
interest in the shares held by his children.
8
<PAGE>
(b) Includes 369,035 shares owned of record and beneficially by each of Mr.
Lonnie A. "Bo" Pilgrim's three adult children, including Lonnie Ken
Pilgrim, a Director of the Company whose shares are also shown separately.
Lonnie A. "Bo" Pilgrim disclaims any beneficial interest in the shares held
by his three adult children.
(c) Includes 38,650 shares held in four trusts dated December 15, 1989, and
December 21, 1992, for the benefit of Mr. Lonnie A. "Bo" Pilgrim's four
minor grandchildren. Mr. Lonnie A. "Bo" Pilgrim disclaims any beneficial
interest in the shares held by his four minor grandchildren.
(d) Includes shares held in trust by the Company's 401(k) Salary Deferral Plan.
(e) 6.6 million shares owned by Mr. Lonnie A. "Bo" Pilgrim are pledged to
secure a "no loss guarantee" expiring on July 8, 1995 which was given to
ADM on June 25, 1992 in connection with their purchase of the Company's
common stock.
(f) As reported in its Statement of Changes in Beneficial Ownership on Form 4
dated December 1, 1993.
(g) Less than 1%.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's common stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the New York Stock Exchange.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based on its review of the copies of such forms received by it, the Company
believes that all filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
ITEM 2. APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends the appointment of Ernst & Young as the
Company's independent auditors for the 1994 fiscal year. This firm of certified
public accountants has served as independent auditors of the Company pursuant
to annual appointment by the Board of Directors since 1969 except for 1982 and
1983.
Representatives of Ernst & Young are expected to be present at the Meeting
and to be available to respond to appropriate questions. They will be given the
opportunity to make a statement if they wish to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF ERNST & YOUNG
AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR 1994.
FINANCIAL STATEMENTS AVAILABLE
FINANCIAL STATEMENTS FOR THE COMPANY ARE INCLUDED IN THE ANNUAL REPORT TO
STOCKHOLDERS FOR THE YEAR 1993. ADDITIONAL COPIES OF THESE STATEMENTS, AS WELL
AS FINANCIAL STATEMENTS FOR PRIOR YEARS AND THE ANNUAL REPORT TO THE SECURITIES
AND EXCHANGE COMMISSION ON FORM 10-K, MAY BE OBTAINED WITHOUT CHARGE FROM THE
SECRETARY OF THE COMPANY, 110 SOUTH TEXAS STREET, PITTSBURG, TEXAS 75686.
FINANCIAL STATEMENTS ARE ALSO ON FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION, WASHINGTON, D.C. 20549, AND THE NEW YORK STOCK EXCHANGE.
9
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of, and it is not anticipated that there
will be presented to the Meeting, any business other than the election of
Directors and the proposal to appoint Ernst & Young independent auditors
described above. If other matters properly come before the Meeting, the persons
named on the accompanying proxy card will vote the returned proxies as the
Board of Directors recommends.
Please date, sign and return the proxy at your earliest convenience. A prompt
return of your proxy will be appreciated as it will save the expense of further
mailing.
By order of the Board of Directors
(SIGNATURE OF CLIFFORD E. BUTLER)
Clifford E. Butler
Vice Chairman, Chief Financial
Officer Secretary and Treasurer
Pittsburg, Texas
January 7, 1994
10
<PAGE>
[ X ] Please mark
your votes
as this
----------
COMMON
1. ELECTION OF DIRECTORS:
FOR all nominees TO WITHHOLD
listed at right AUTHORITY
(except as marked to vote for all
to the contrary) nominees listed
at right
[ ] [ ]
Lonnie A. Pilgrim James J. Miner Robert E. Hilgenfeld
Clifford E. Butler Lonnie Ken Pilgrim Vance C. Miller
Lindy M. Pilgrim James G. Vetter, Jr. Donald L. Wass
Monty K. Henderson
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.)
-------------------------------------------------
2. The appointment of Ernst & Young as independent
auditors for the Company for the fiscal year.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - -------------------------------------------------------------------------------
3. In their discretion such other business as may properly come before
the Annual Meeting.
UNLESS OTHERWISE SPECIFIED ON THIS PROXY, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF MANAGEMENT'S NOMINEES FOR DIRECTORS AND
"FOR" PROPOSAL 2 ABOVE. DISCRETION WILL BE USED WITH
RESPECT TO SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
----------------------------------------------------
Date
----------------------------------------------------
Signature of Stockholder
----------------------------------------------------
Signature if held jointly
Please date this proxy and sign your name exactly as
it appears hereon. Persons signing in a
representative capacity should indicate their
capacity. A proxy for shares held in joint ownership
should be signed by each owner.
Please Execute This Proxy and Return Promptly in the
Enclosed Self-Addressed Stamped Envelope.
<PAGE>
Pilgrim's Pride Corporation
110 South Texas Street
Pittsburg, Texas 75686
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Lonnie A. Pilgrim and Clifford E. Butler,
and each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them, and each of them, to represent and to vote, as
designated below, all the shares of Common Stock of Pilgrim's Pride Corporation
held of record by the undersigned on December 20, 1993 at the Annual Meeting of
Stockholders to be held on February 2, 1994 or any adjournment thereof.
(Continued on other side)
