<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant / X /
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a - 11(c) or Rule 14a-12
Pilgrim's Pride Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No Fee Required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
/ / 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:
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(4) Date Filed:
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<PAGE>
PRELIMINARY COPIES
Pilgrim's Pride Corporation
110 South Texas Street
Pittsburg, Texas 75686
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 20, 1999
AT
110 SOUTH TEXAS STREET
PITTSBURG, TEXAS 75686
Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of Pilgrim's Pride Corporation, a Delaware corporation (the
"Company"), will be held on July 20, 1999, at 9:00 a.m., local time, at 110
South Texas Street, Pittsburg, Texas 75686 to consider the following matters:
1. To consider and vote upon a proposal to amend the Company's Certificate
of Incorporation to permit dividends of either Class A Common Stock or Class B
Common Stock of the Company, as specified by the Board of Directors of the
Company, to holders of the Company's Class B Common Stock; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 30, 1999 as
the record date for determining stockholders of record entitled to notice of,
and to vote at, the Special Meeting.
Pittsburg, Texas
July 2, 1999 RICHARD A. COGDILL
Executive Vice President, Chief
Financial Officer,
Secretary and Treasurer
YOUR VOTE IS IMPORTANT!
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY.
<PAGE>
PRELIMINARY COPIES
Pilgrim's Pride Corporation
110 South Texas Street
Pittsburg, Texas 75686
-------------------------------
PROXY STATEMENT FOR SPECIAL MEETING
-------------------------------
GENERAL INFORMATION
The Board of Directors of Pilgrim's Pride Corporation (the "Company")
solicits stockholders' proxies in the accompanying form for use at the Special
Meeting of Stockholders to be held on July 20, 1999, at 9:00 a.m., local time,
at 110 South Texas Street, Pittsburg, Texas 75686 (the "Special Meeting"). This
Proxy Statement and the accompanying proxy card are being mailed, beginning on
or about July 2, 1999, to all stockholders entitled to receive notice of, and to
vote at, the Special 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 June 30, 1999 (the
"Record Date") will be entitled to twenty votes for each share of the Company's
Class B common stock, par value $.01 per share ("Class B Common Stock"), held on
the Record Date. The accompanying proxy card indicates the number of shares to
be voted. On June 30, 1999, there were 27,589,250 shares of the Company's Class
B Common Stock issued and outstanding. No other classes of stock of the Company
were outstanding on the Record Date.
Voting of Proxies
Because many of the Company's stockholders are unable to attend the Special
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 Special Meeting. Each stockholder is urged to:
(1) read carefully the material in this Proxy Statement;
(2) specify his or her voting instruction by marking the appropriate box
on the accompanying proxy card; and
(3) sign, date and return the card in the enclosed, postage prepaid
envelope.
The accompanying proxy card allows a stockholder to abstain from voting if
the stockholder chooses to do so.
When the accompanying proxy card is properly executed and returned with
voting instructions, the shares represented by the proxy will be voted in
accordance with the stockholder's direction by the persons named on the card as
proxies of the stockholder. 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 amendment to the Company's Certificate of Incorporation
and at the proxies' discretion on any other matters that come before the Special
Meeting.
The proxy does not affect a stockholder's right to vote in person at the
Special 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, by communicating his
or her revocation in writing to the Secretary of the Company or by voting by
ballot at the Special Meeting.
<PAGE>
Vote Required
The holders of at least a majority of the shares of the Company's Class B
Common Stock outstanding on the Record Date must be present in person or by
proxy at the Special Meeting for the Special 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 Class B Common Stock outstanding on the Record Date
are present at the Special Meeting. The affirmative vote of the holders of a
majority of the outstanding shares of the Company's Class B Common Stock
entitled to vote at the Special Meeting is required for approval of the proposed
amendment to the Company's Certificate of Incorporation. Accordingly,
abstentions and broker non-votes will have the effect of a vote against the
proposal to amend the Company's Certificate of Incorporation. Lonnie "Bo"
Pilgrim owned or controlled 16,773,492 shares (60.8%) of the Company's Class B
Common Stock on the Record Date and thus will be able to approve the proposed
amendment to the Company's Certificate of Incorporation.
Cost of Proxy Solicitation
The Company will bear the cost of the Special 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
Class B Common Stock and to secure their voting instructions, if necessary. The
Company will reimburse them for the expenses in so doing.
SECURITY OWNERSHIP
The following table sets forth, as of May 31, 1999, certain information
with respect to the beneficial ownership of the Company's Class B Common Stock
(no other classes of stock of the Company were outstanding as of such date) by
(i) each stockholder beneficially owning at least 5% of the Company's
outstanding Class B Common Stock; (ii) each director of the Company who is a
stockholder of the Company; (iii) the Company's Chief Executive Officer; (iv)
the Company's four most highly compensated executive officers other than the
Chief Executive Officer; and (v) 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 "Bo" Pilgrim (a) (b).................................................16,773,492 60.8%
110 South Texas Street
Pittsburg, Texas 75686
Lonnie Ken Pilgrim (b) (c).................................................. 535,508 1.9
Clifford E. Butler (b)...................................................... 33,702 (d)
Richard A. Cogdill (b)...................................................... 8,459 (d)
Robert L. Hendrix (b)....................................................... 25,826 (d)
David Van Hoose (b)......................................................... 6,630 (d)
James G. Vetter, Jr......................................................... 1,550 (d)
Donald L. Wass.............................................................. 300 (d)
All executive officers and directors as a group (17 persons)................17,306,946 62.7%
___________________
</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 "Bo"
Pilgrim's surviving spouse and children, of which Lonnie Ken Pilgrim and
Patty R. Pilgrim, Lonnie "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 "Bo" Pilgrim and his
children, of which Lonnie "Bo" Pilgrim and Lonnie Ken Pilgrim are co-
trustees. Mr. Lonnie "Bo" Pilgrim disclaims any beneficial interest in the
shares held by his children.
2
<PAGE>
(b) Includes shares held in trust by the Company's 401(k) Salary Deferral Plan.
(c) Includes 6,465 shares held by his wife, and 60,387 and 60,386 shares held
by Pilgrim Family Trust I and Pilgrim Family Trust II, respectively, for
both of which Lonnie Ken Pilgrim serves as a co-trustee. Also includes
25,350 shares held in two irrevocable trusts dated December 15, 1994 and
October 31, 1989, of which Lonnie Ken Pilgrim is a co-trustee for the
benefit of his children. Lonnie Ken Pilgrim disclaims any beneficial
interest in the foregoing shares.
(d) Less than 1%.
PROPOSAL:
AMENDMENT TO COMPANY'S CERTIFICATE OF INCORPORATION
General
Previous Amendment to the Certificate of Incorporation. The Company's
------------------------------------------------------
stockholders previously approved an amendment (the "Previous Amendment") to the
Company's Certificate of Incorporation which (i) reclassified the then existing
common stock of the Company as Class B Common Stock, (ii) authorized a new class
of common stock, designated as Class A Common Stock (the "Class A Common Stock"
and, together with the Class B Common Stock, "Common Stock"), (iii) increased
the number of authorized shares of capital stock from fifty million (50,000,000)
to one hundred sixty five million (165,000,000), consisting of five million
(5,000,000) shares of preferred stock, one hundred million (100,000,000) shares
of Class A Common Stock and sixty million (60,000,000) shares of Class B Common
Stock, and (iv) established the rights, powers and limitations of the Class A
Common Stock and the Class B Common Stock. The Company's Certificate of
Incorporation was amended in accordance with this approval and has not
subsequently been amended.
Reason for the Previous Amendment. The Company qualifies as a "family
---------------------------------
corporation" under Section 447 of the Internal Revenue Code of 1986, as amended
(the "Code"). Section 447 of the Code provides that a corporation is a "family
corporation" if at least 50% of the total combined voting power of all classes
of stock entitled to vote and at least 50% of all other classes of stock of the
corporation are owned by members of the same family and certain other conditions
are met. The Company is controlled by Lonnie A. "Bo" Pilgrim (the "Founder")
who owns over 60% of its outstanding common stock and meets the other
requirements of a "family corporation."
Before July 2, 1988, the Company used the cash method of accounting for
federal income tax purposes. Pursuant to changes in the law enacted by the
Revenue Act of 1987, the Company (as a "family corporation") was required to
change its method of accounting to the accrual method for federal income tax
purposes. As a consequence of such change in accounting method, the Company was
permitted to create a "suspense account" in the amount of approximately $89.7
million, which represents deferred income arising from the Company's prior use
of the cash method of accounting. Beginning fiscal 1998, the Company is
generally required to include 1/20th of this amount, or approximately $4.5
million, in taxable income each year for the next 20 years. However, the full
amount must be included in taxable income in any year that the Company ceases to
be a "family corporation." Accordingly, if the Founder's family ceases to own
at least 50% of the total combined voting power of all classes of the Company's
stock entitled to vote, the Company would cease to be a "family corporation" and
would be required to recognize the balance of the "suspense account" in taxable
income.
The Board of Directors believes that the continued success and growth of
the Company requires the flexibility to issue stock to raise capital and/or
acquire other companies. The Previous Amendment was designed to promote both
objectives, without causing the adverse tax consequences described above.
Proposed Amendment to the Company's Certificate of Incorporation and Related
Actions
As reflected by the discussion below and Annex A hereto, each share of the
Company's Class A Common Stock is substantially identical to the shares of the
Company's Class B Common Stock, except that each share of Class A Common Stock
entitles the holder thereof to one vote per share on any matter submitted for a
stockholder vote and each share of Class B Common Stock entitles the holder
thereof to twenty votes per share on any matter submitted for a stockholder
vote. In addition to this fundamental difference, the Company's Certificate of
Incorporation currently provides in relevant part that "if dividends are
declared that are payable in shares of
3
<PAGE>
Common Stock, then such stock dividends shall be payable at the same rate on
each class of Common Stock and shall be payable only in shares of Class A Common
Stock to holders of Class A Common Stock and in shares of Class B Common Stock
to holders of Class B Common Stock."
At the Special Meeting, the Company stockholders are being asked to
consider and vote upon a proposal to approve an amendment to the Company's
Certificate of Incorporation in the form attached hereto as Annex A (the
"Amendment"). The only substantive difference between the Company's Certificate
of Incorporation as currently in effect and as proposed to be amended is that
the Certificate of Incorporation as proposed to be amended would permit
dividends of either Class A Common Stock or Class B Common Stock, as may be
specified by the Board of Directors of the Company, to the holders of the
Company's Class B Common Stock. As described above, currently, the Certificate
of Incorporation provides that if dividends are declared that are payable in
shares of Common Stock, such dividends will be payable in shares of Class A
Common Stock to holders of Class A Common Stock and in shares of Class B Common
Stock to holders of Class B Common Stock.
If the Amendment is approved by the stockholders, the Board of Directors
intends to file a Certificate of Amendment to the Certificate of Incorporation
of the Company in accordance with the Amendment. The Amendment will be
effective immediately upon acceptance of filing by the Secretary of State of the
State of Delaware. Although the Board presently intends to file the Certificate
of Amendment, if the Amendment is approved by stockholders, the resolution of
stockholders will reserve to the Board of Directors the right to defer or
abandon the Amendment and not file such Certificate of Amendment.
Subject to the filing and effectiveness of the Certificate of Amendment,
the Board of Directors has approved the distribution as a dividend payable in
the form of one (1) share of its Class A Common Stock for every two (2) shares
of its Class B Common Stock outstanding on the record date (the "Stock
Dividend"). The record date for the Stock Dividend is ____, 1999, and the date
of distribution of the Class A Common Stock under the Stock Dividend will be
___________, 1999. In order to avoid adding administrative expenses, no
fractional shares of the Class A Common Stock will be issued in the Stock
Dividend, but in lieu thereof each stockholder will receive, in cash, the fair
value of any fractional shares to which they would otherwise be entitled.
Because, except with respect to voting rights, each share of Class A Common
Stock is substantially identical to the shares of Class B Common Stock, the
Board has determined that the price to be paid for any fractional shares will be
based upon the closing price of the Class B Common Stock on the record date for
the Stock Dividend. Stockholder approval of the Stock Dividend is not required
by Delaware law and is not being solicited by this Proxy Statement.
Recommendation of the Board of Directors
The Amendment has been unanimously approved by the Company's Board of
Directors. The Board believes that the Amendment is in the best interests of
the Company and its stockholders and recommends that you vote "FOR" the adoption
of the Amendment.
Reason for the Amendment
As indicated above, the Board of Directors believes that the continued
success and growth of the Company requires the flexibility to issue stock to
raise capital and/or acquire other companies. The Board of Directors believes
that the establishment of a market for the Company's Class A Common Stock will
provide the Company with increased flexibility in the future to issue common
equity in connection with acquisitions and to raise equity capital or to issue
convertible debt as a means to finance future growth without triggering the
adverse tax consequences described above. The Board of Directors believes that
this increase in flexibility is important because of its belief that
consolidation is underway in the poultry industry. The Company believes the
consummation of any strategic acquisition that may arise in the future may
require the issuance of substantial amounts of capital stock and/or cash
payments. The availability of a pool of authorized but unissued Class A Common
Stock trading on an active market that can be issued without triggering the
adverse tax consequences described above will provide the Company with greater
flexibility in responding to acquisition opportunities that the Board of
Directors determines are in the Company's long-term best interest. The Board
of Directors believes that one way to establish such a market for the Class A
Common Stock is to effect the Stock Dividend.
4
<PAGE>
Certain Potential Disadvantages of the Amendment
In addition to the potential benefits of the Amendment discussed above, the
Board also considered potential disadvantages of the Amendment, including the
following:
Uncertain Effect on Stock Price. Any issuance of shares of Class A Common
-------------------------------
Stock, including in the Stock Dividend, could affect the price of the Class B
Common Stock. However, many factors, including general market conditions,
future performance of the Company and the performance of other companies in the
industry, could cause fluctuations in the prices for both the Class A Common
Stock and Class B Common Stock, and could cause the Class A Common Stock and
Class B Common Stock to trade at different prices. While the Company presently
intends to issue only Class A Common Stock in the future, it may from time to
time issue Class B Common Stock if necessary to achieve strategic objectives of
the Company. Future issuances of both Class A Common Stock and Class B Common
Stock could affect the price for either or both classes of Common Stock. For
the foregoing reasons, the Company cannot predict the market prices at which the
Class A Common Stock and the Class B Common Stock will trade following the
Amendment and the Stock Dividend. See "--Risk of Discounted Value of Class A
Common Stock in Future Acquisitions or Financings."
Risk of Discounted Value of Class A Common Stock in Future Acquisitions or
--------------------------------------------------------------------------
Financings. The Company presently plans to issue Class A Common Stock in future
- ----------
acquisitions, financings or offerings. If the Class A Common Stock trades at a
discount to the Class B Common Stock, then acquisitions or financings involving
the issuance of Class A Common Stock will be economically more dilutive to
existing stockholders than such transactions would be if the Company issued
Class B Common Stock. This dilution, if it occurs, will result in decreased
earnings per share and lower stock prices for both the Class B Common Stock and
the Class A Common Stock.
Potential Negative Response of Institutional Investors. Implementation of
------------------------------------------------------
the Amendment or the Stock Dividend may affect the decision of certain
institutional investors that would otherwise consider investing in the Class B
Common Stock but who object to the Amendment or the Stock Dividend. To the
extent that institutional investors avoid purchasing the Company's stock, the
stock price may be negatively affected by the decreased demand.
Complications for Future Business Combinations. The Board believes that a
----------------------------------------------
market for the Class A Common Stock will allow the Company greater flexibility
in carrying out future acquisitions. However, the existence of two classes of
Common Stock will cause difficulties in accounting for such acquisitions using
the "pooling of interests" method for financial reporting purposes. This factor
could counteract the increase in flexibility in responding to acquisition
opportunities that is anticipated from such market.
Potential Payment of Deferred Taxes. For the Company to remain a "family
-----------------------------------
corporation," at least 50% of the total combined voting power of all classes of
stock entitled to vote of the Company and at least 50% of all other classes of
stock of the Company must be owned by the Founder's family. Thus, if the Class
A Common Stock was deemed not to be a "class of stock entitled to vote" and the
Founder's family failed to own at least 50% of any outstanding Class A Common
Stock, the balance of the $89.7 million "suspense account" would be immediately
included in the taxable income of the Company. However, although no assurances
can be given, Baker & McKenzie has advised the Company that in its opinion the
Class A Common Stock should be considered "a class of stock entitled to vote."
See "--General--Reason for the Previous Amendment."
Potential Changes in Law or Regulations. In recent years, bills have been
---------------------------------------
introduced in Congress that, if enacted, would have prohibited the registration
of common stock on a national securities exchange or the trading of such common
stock on Nasdaq if such common stock was part of a class of securities which has
no voting rights or carried disproportionate voting rights. While these bills
have not been acted upon by Congress, there can be no assurance that such a bill
(or a modified version thereof) will not be introduced in Congress in the
future. Legislation or other regulatory developments could make the Class A
Common Stock and Class B Common Stock ineligible for trading on national
securities exchanges and Nasdaq. Similarly, rule changes adopted by the
exchanges or the National Association of Securities Dealers could also make the
Class A Common Stock or Class B Common Stock ineligible for trading on one or
more of such exchanges or Nasdaq. The Company is unable to predict whether any
such regulatory proposals or rule changes will be adopted or whether they will
have such effect.
5
<PAGE>
Securities Laws & Regulations
Federal Securities Laws. Because the existing Class B Common Stock will
-----------------------
have essentially the same rights, powers and limitations after the Amendment,
the Amendment is not an "offer," "offer to sell," "offer for sale" or "sale" of
a security within the meaning of Section 2(3) of the Securities Act of 1933, as
amended (the "Securities Act"), and will not involve the substitution of one
security for another under Rule 145 thereunder. In addition, the Stock Dividend
of Class A Common Stock will not involve a "sale" of a security under the
Securities Act or Rule 145.
Because the Amendment and the Stock Dividend do not constitute a "sale" of
either Class B Common Stock or Class A Common Stock under the Securities Act,
shares of Class B Common Stock held immediately upon effectiveness of the
Amendment and shares of Class A Common Stock received in the Stock Dividend,
other than any such shares held by affiliates of the Company, may be offered for
sale and sold in the same manner as the Class B Common Stock prior to the
Amendment. Any affiliate of the Company under Rule 144 will be subject to the
restrictions specified in Rule 144 under the Securities Act.
NYSE Criteria. The Class B Common Stock is currently listed on the New
-------------
York Stock Exchange ("NYSE"), and application is being made to trade the Class A
Common Stock on the NYSE as well.
Tax Consequences of the Stock Dividend
Stockholders of the Company who receive shares of Class A Common Stock by
reason of the Stock Dividend will not be required to include the fair market
value of the stock received in their gross income for federal income tax
purposes. The cost or other tax basis of the old shares must be allocated
between the old and new shares in proportion to the fair market value of each on
the date of distribution, and this reallocated tax basis must be used in
computing gain or loss (if any) on a subsequent taxable disposition of the old
and/or new shares. The payment received by the stockholders by reason of the
fractional share cash-out should be treated as a distribution received in
exchange for the fractional shares for federal income tax purposes. Thus, the
stockholders receiving the payments will be required to recognize gain or loss
equal to the difference between the payment received and the basis allocated to
the fractional shares. THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH
ABOVE IS FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO ALL
INDIVIDUALS. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS FOR A
DETERMINATION AS TO THE SPECIFIC TAX CONSEQUENCES APPLICABLE TO THEM.
Stockholder Proposals for 2000 Annual Meeting
Stockholders intending to present proposals at the 2000 Annual Meeting of
Stockholders and desiring to have those proposals included in the Company's
proxy statement and form of proxy relating to that meeting must submit such
proposals, in compliance with Rule 14a-8 of the Securities Exchange Act of 1934,
as amended, to the Secretary of the Company on or before August 30, 2000.
6
<PAGE>
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,
RICHARD A. COGDILL
Executive Vice President, Chief Financial Officer
Secretary and Treasurer
Pittsburg, Texas
July 2, 1999
7
<PAGE>
ANNEX A
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
PILGRIM'S PRIDE CORPORATION
Pilgrim's Pride Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that:
1. The amendment to the Corporation's Certificate of Incorporation set
forth below was duly adopted in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
2. Article Fourth of the Corporation's Certificate of Incorporation is
amended to read in its entirety as follows:
"FOURTH:
Authorized Shares
-----------------
The total number of shares of stock which the Corporation shall have
authority to issue is 165,000,000 shares, consisting of the following:
(1) 100,000,000 shares of Class A common stock, par value $.01
per share (the "Class A Common Stock");
(2) 60,000,000 shares of Class B common stock, par value $.01
per share (the "Class B Common Stock" and, together with the Class A
Common Stock, the "Common Stock"); and
(3) 5,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock").
Designations, Preferences, etc. of the Capital Stock
----------------------------------------------------
The designations, preferences, powers, qualifications, and special or
relative rights or privileges of the capital stock of the Corporation shall
be as set forth below.
Common Stock
------------
(1) Identical Rights. Except as herein otherwise expressly provided,
----------------
all shares of Common Stock shall be identical and shall entitle the holders
thereof to the same rights and privileges.
(2) Dividends on the Common Stock.
-----------------------------
(a) Subject to the prior rights and preferences, if any,
applicable to shares of the Preferred Stock or any series thereof, the
holders of shares of Common Stock shall be entitled to receive such
dividends (payable in cash, stock, or otherwise) as may be declared
thereon by the Corporation's board of directors (the "Board of
Directors") at any time and from time to time out of any funds of the
Corporation legally available therefor, except that (i) if dividends
are declared that are payable in shares of Common Stock, then such
stock dividends shall be payable at the same rate on each class of
Common Stock and shall be payable only in shares of Class A Common
Stock to holders of Class A Common Stock and in shares of either Class
A Common Stock or Class B Common Stock, as may be specified by the
Board of Directors in a resolution authorizing such stock dividend, to
holders of Class B Common Stock and (ii) if dividends are declared
that are payable in shares of common stock of another corporation,
then such shares may
8
<PAGE>
differ as to voting rights to the extent that voting rights now differ
among the Class A Common Stock and the Class B Common Stock.
(b) Dividends payable under this subparagraph (2) shall be paid
to the holders of record of the outstanding shares of Common Stock as
their names shall appear on the stock register of the Corporation on
the record date fixed by the Board of Directors in advance of
declaration and payment of each dividend. Any shares of Common Stock
issued as a dividend pursuant to this subparagraph (2) shall, when so
issued, be duly authorized, validly issued, fully paid and non-
assessable, and free of all liens and charges.
(c) Notwithstanding anything contained herein to the contrary, no
dividends on shares of Common Stock shall be declared by the Board of
Directors or paid or set apart for payment by the Corporation at any
time that such declaration, payment or setting apart is prohibited by
applicable law.
(3) Stock Splits Relating to the Common Stock. The Corporation shall
-----------------------------------------
not in any manner subdivide (by any stock split, reclassification, stock
dividend, recapitalization or otherwise) or combine the outstanding shares
of one class of Common Stock unless the outstanding shares of both classes
of Common Stock shall be proportionately subdivided or combined.
(4) Liquidation Rights of the Common Stock. In the event of any
--------------------------------------
voluntary or involuntary liquidation, dissolution, or winding-up of the
Corporation, after distribution in full of the preferential amounts, if
any, to be distributed to the holders of shares of the Preferred Stock or
any series thereof, the holders of shares of Common Stock shall be entitled
to receive all of the remaining assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the number of
shares of Common Stock held by them. A liquidation, dissolution, or
winding-up of the Corporation, as such terms are used in this subparagraph
(4), shall not be deemed to be occasioned by or to include any
consolidation or merger of the Corporation with or into any other
corporation or corporations or other entity or a sale, lease, exchange, or
conveyance of all or a part of the assets of the Corporation.
(5) Voting Rights of the Common Stock.
---------------------------------
(a) The holders of the Class A Common Stock and the Class B
Common Stock shall vote as a single class on all matters submitted to
a vote of the stockholders, with each share of Class A Common Stock
being entitled to one (1) vote and each share of Class B Common Stock
being entitled to twenty (20) votes, except as otherwise provided by
law.
(b) No holder of Common Stock shall be entitled to preemptive or
subscription rights.
(6) Consideration on Merger, Consolidation, etc. In any merger,
--------------------------------------------
consolidation, or business combination, the consideration to be received
per share by the holders of Class A Common Stock and Class B Common Stock
must be identical for each class of stock, except that in any such
transaction in which shares of common stock are to be distributed, such
shares may differ as to voting rights to the extent that voting rights now
differ among the Class A Common Stock and the Class B Common Stock.
Preferred Stock
---------------
Shares of the Preferred Stock may be issued from time to time in one
or more series, the shares of each series to have such voting powers, full
or limited, or no voting powers, and such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in a resolution or resolutions providing for the issue of such
series adopted by the Board of Directors of the
9
<PAGE>
Corporation. The Board of Directors of the Corporation is hereby expressly
authorized, subject to the limitations provided by law, to establish and
designate series of the Preferred Stock, to fix the number of shares
constituting each series, and to fix the designations and the relative
powers, rights, preferences and limitations of the shares of each series
and the variations in the relative powers, rights, preferences and
limitations as between series, and to increase and to decrease the number
of shares constituting each series."
IN WITNESS WHEREOF, Pilgrim's Pride Corporation has caused this Certificate
to be executed by Lonnie A. Pilgrim, its authorized officer, on this ___ day of
_______________, 1999.
PILGRIM'S PRIDE CORPORATION
-----------------------------------------------------
Lonnie A. Pilgrim, Chairman of the Board of Directors
10
<PAGE>
PRELIMINARY COPIES
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.
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 "Bo" 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 Class B Common Stock of Pilgrim's Pride
Corporation (the "Company") held of record by the undersigned at the close of
business on June 30, 1999 at the Special Meeting of Stockholders to be held on
July 20, 1999 or any adjournment thereof.
(continued on other side)
<PAGE>
[ x ] Please mark your votes as this
--------------------
AMENDMENT TO COMPANY'S CERTIFICATE OF INCORPORATION
1. Amend the Company's Certificate of Incorporation to permit dividends of
either Class A Common Stock or Class B Common Stock of the Company, as
specified by the Board Directors of the Company, to holders of the
Company's Class B Common Stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. In their discretion such other business as may properly come before the
Special Meeting.
- --------------------------------------------------------------------------------
UNLESS OTHERWISE SPECIFIED ON THIS PROXY, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
"FOR" THE AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION.
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Date
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Signature of Stockholder
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Signature if held jointly
