<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:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] 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:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
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.
/s/ Richard A. Cogdill
Pittsburg, Texas RICHARD A. COGDILL
July 2, 1999 Executive Vice President, Chief Financial 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 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.
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
<PAGE>
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 and his son Lonnie Ken Pilgrim owned or
controlled over 60% 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. In June 1999, Lonnie "Bo" Pilgrim transferred 14,368,385 of
these shares to Pilgrim Interests, Ltd., a limited partnership of which
Lonnie "Bo" Pilgrim and his son Lonnie Ken Pilgrim are the general
partners and Lonnie "Bo" Pilgrim and various trusts for the benefit of his
children are the limited partners. Mr. Lonnie "Bo" Pilgrim disclaims any
beneficial interest in the shares held by his children.
(b) Includes shares held in trust by the Company's 401(k) Salary Deferral
Plan.
2
<PAGE>
(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. In June 1999, Mr. Lonnie "Bo" Pilgrim transferred
14,368,385 shares to Pilgrim Interests, Ltd., a limited partnership of
which Lonnie "Bo" Pilgrim and Lonnie Ken Pilgrim are the general partners
and Lonnie "Bo" Pilgrim and various trusts for the benefit of his children
are the limited partners. Lonnie Ken Pilgrim disclaims any beneficial
interest in all but 9,000 of the foregoing shares. This increases the
number of shares beneficially owned by Lonnie Ken Pilgrim to 14,930,893
shares or 54.1% of the class. His address is 110 South Texas Street,
Pittsburg, Texas 75686.
(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") and his son Lonnie Ken Pilgrim who, together with various
trusts for the benefit of members of the Founder's family, indirectly own 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
3
<PAGE>
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 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's 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 July 20, 1999, and the
date of distribution of the Class A Common Stock under the Stock Dividend will
be July 30, 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
4
<PAGE>
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.
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
5
<PAGE>
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.
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,
/s/ Richard A. Cogdill
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
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.
A-1
<PAGE>
(3) Stock Splits Relating to the Common Stock. Except as expressly
provided in subparagraph (2) above, 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 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
A-2
<PAGE>
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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 Richard A. Cogdill,
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 and to be signed on reverse side)
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PILGRIM'S PRIDE CORPORATION
Please mark your votes in the following manner [X]
--------------------
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.
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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.
----------------------------------------------------
Date
----------------------------------------------------
Signature of Stockholder
----------------------------------------------------
Signature if held jointly
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE THIS PROXY AND RETURN PROMPTLY IN THE
ENCLOSED SELF-ADDRESSED STAMPED ENVELOPE.
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