SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 30, 2002
Commission file number 1-9273
PILGRIM'S PRIDE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-1285071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 SOUTH TEXAS, PITTSBURG, TX 75686-0093
(Address of principal executive offices) (Zip code)
(903) 855-1000
(Telephone number of principal executive offices)
Not Applicable
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes XNo
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
27,589,250 shares of the Registrant's Class B Common Stock, $.01 par value,
were outstanding as of May 14, 2002.
13,523,429 shares of the Registrant's Class A Common Stock, $.01 par value,
were outstanding as of May 14, 2002.
1
INDEX
PILGRIM'S PRIDE CORORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets
March 30, 2002 and September 29, 2001
Consolidated statements of income
Three months and six months ended March 30,
2002 and March 31, 2001
Consolidated statements of cash flows
Six months ended March 30, 2002 and March 31,
2001
Notes to consolidated financial statements as of
March 30, 2002
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about
Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Pilgrim's Pride Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
March 30, 2002 September 29, 2001
ASSETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
CURRENT ASSETS:
Cash and cash equivalents $ 8,649 $ 20,916
Trade accounts and other
receivables, less allowance
for doubtful accounts 82,703 95,022
Inventories 322,622 314,400
Other current assets 11,461 12,934
Total Current Assets 425,435 443,272
OTHER ASSETS 19,952 20,067
PROPERTY, PLANT AND EQUIPMENT:
Land 36,917 36,350
Buildings, machinery and
equipment 990,475 929,922
Autos and trucks 55,560 53,264
Construction-in-progress 38,679 71,427
1,121,631 1,090,963
Less accumulated depreciation 371,466 338,607
750,165 752,356
$1,195,552 $1,215,695
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable to Banks $ 55,000 $ --
Accounts payable 141,453 151,265
Accrued expenses 73,987 83,558
Current maturities of long-term debt 5,126 5,099
Total Current Liabilities 275,566 239,922
LONG-TERM DEBT, LESS CURRENT MATURITIES 410,628 467,242
DEFERRED INCOME TAXES 113,736 126,710
MINORITY INTEREST IN SUBSIDIARY 1,981 889
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
authorized 5,000,000
shares; none issued -- --
Common stock - Class A, $.01 par
value, authorized 100,000,000
shares; 13,794,529 issued and
outstanding 138 138
Common stock - Class B, $.01 par
value, authorized 60,000,000
shares; 27,589,250 issued and
outstanding 276 276
Additional paid-in capital 79,625 79,625
Retained earnings 315,763 302,758
Accumulated other comprehensive
loss (593) (297)
Less treasury stock,
271,100 shares (1,568) (1,568)
Total Stockholders' Equity 393,641 380,932
$1,195,552 $1,215,695
See notes to consolidated financial statements.
Pilgrim's Pride Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
Three Months Six Months
Ended Ended
March 30, March 31, March 30, March 31,
2002 2001 2002 2001
(in thousands, except share and per share data)
Net Sales $ 600,753 $ 541,593 $1,256,783 $ 927,625
Costs and Expenses:
Cost of sales 572,122 512,377 1,170,288 851,243
Selling, general and
administrative 33,003 34,488 67,537 58,443
605,125 546,865 1,237,825 909,686
Operating (loss) income (4,372) (5,272) 18,958 17,939
Other Expense
(Income):
Interest expense,net 7,262 7,085 15,835 11,225
Foreign exchange
(gain) loss (360) 42 (895) 163
Miscellaneous, net 873 (281) 486 (403)
7,775 6,846 15,426 10,985
Income (loss) before
income taxes (12,147) (12,118) 3,532 6,954
Income tax (benefit)
expense (13,399) (2,316) (10,711) 4,019
Net income (loss) $ 1,252 $ (9,802) $ 14,243 $ 2,935
Net income (loss) per
common share
- basic and diluted $ 0.03 $ (0.24) $ 0.35 $ 0.07
Dividends per common
share $ 0.015 $ 0.015 $ 0.03 $ 0.03
Weighted average shares
outstanding 41,112,679 41,112,679 41,112,679 41,112,679
See notes to consolidated financial statements.
Pilgrim's Pride Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
SIX MONTHS ENDED
MARCH 30, 2002 MARCH 31, 2001
(IN THOUSANDS)
Cash Flows From Operating Activities:
Net income $ 14,243 $ 2,935
Adjustments to reconcile net income to
cash provided by operating
activities:
Depreciation and amortization 35,045 20,820
Loss (gain) on property disposals 109 (2)
Deferred income taxes (12,974) (1,755)
Changes in operating assets and liabilities:
Accounts and other receivables 12,319 (4,363)
Inventories (8,222) (17,777)
Prepaid expenses and other current assets 1,473 (3,445)
Accounts payable and accrued expenses (19,383) (27,735)
Other 452 (164)
Cash Provided By (Used In)
Operating Activities 23,062 (31,486)
INVESTING ACTIVITIES:
Acquisitions of property, plant and
equipment (32,231) (60,400)
Business acquisitions -- (239,539)
Proceeds from property disposals 199 856
Other, net (645) (364)
Net Cash Used In Investing Activities (32,677) (299,447)
FINANCING ACTIVITIES:
Borrowing for acquisition -- 285,070
Repayments on WLR Foods, Inc. debt -- (45,531)
Proceeds from notes payable to banks 128,500 136,000
Repayments of notes payable to banks (73,500) (77,000)
Proceeds from long-term debt 28,850 32,430
Payments on long-term debt (85,436) (22,107)
Cash dividends paid (1,238) (1,233)
Cash (Used In) Provided By Financing
Activities (2,824) 307,629
Effect of exchange rate changes on
cash and cash equivalents 172 (11)
Decrease in cash and cash equivalents (12,267) (23,315)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 20,916 28,060
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,649 $ 4,745
SUPPLEMENTAL DISCLOSURE INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $18,364 $8,590
Income taxes $1,302 $3,970
See notes to consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Pilgrim's
Pride Corporation ("Pilgrim's" or the "Company") have been prepared in
accordance with accounting principles generally accepted in the United
States for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the period ended March 30, 2002 are not necessarily indicative
of the results that may be expected for the year ended September 28, 2002.
For further information, refer to the consolidated financial statements and
footnotes thereto included in Pilgrim's annual report on Form 10-K for the
year ended September 29, 2001.
The consolidated financial statements include the accounts of Pilgrim's and
its wholly and majority owned subsidiaries. Significant intercompany
accounts and transactions have been eliminated.
Total comprehensive income for the six months ending March 30, 2002 and
March 31, 2001 was $13.9 million and $2.9 million, respectively.
On January 27, 2001, we acquired WLR Foods, Inc. (formerly Nasdaq:WLRF) for
approximately $239.5 million and the assumption of approximately $45.5
million of indebtedness. WLR operations have been included since the
acquisition on January 27, 2001. The acquisition was accounted for under
the purchase method of accounting and the purchase price has been allocated
based on the estimated fair value of assets and liabilities.
Pro Forma Financial Information: The following unaudited pro forma
financial information has been presented as if the acquisition of WLR
Foods, Inc. had occurred as of the beginning of each March 31, 2001 period
presented. In addition, certain reclassifications have been made to the
WLR historical financial statements to conform to the presentation used by
Pilgrim's Pride Corporation.
Historical Pro Forma
MARCH 30, 2002 MARCH 31, 2001
THREE MONTHS ENDED
Net Sales $600,753 $590,659
Operating Loss (4,372) (23,603)
Interest Expense, Net 7,262 9,338
Loss Before Tax (12,147) (32,834)
Net Income (Loss) 1,252 (22,439)
Depreciation and Amortization 17,647 13,556
Net Income (Loss) per Common Share
- Basic and Diluted $ 0.03 $ (0.55)
Historical Pro Forma
SIX MONTHS ENDED MARCH 30, 2002 MARCH 31, 2001
Net Sales $1,256,783 $1,192,055
Operating Income 18,958 6,195
Interest Expense, Net 15,835 20,239
Income (Loss) Before Tax 3,532 (13,939)
Net Income (Loss) 14,243 (9,810)
Depreciation and Amortization 35,045 29,953
Net Income (Loss) per Common Share
- Basic and Diluted $ 0.35 $ (0.24)
NOTE B-ACCOUNTS RECEIVABLE
In 1998 the Company entered into an Asset Sale Agreement to sell up to $60
million of accounts receivable. In connection with the Asset Sale
Agreement, the Company sells, on a revolving basis, certain of its trade
receivables (the "Pooled Receivables") to a special purpose corporation
wholly owned by the Company, which in turn sells a percentage ownership
interest to third parties. At March 30, 2002 and September 29, 2001, an
interest in these Pooled Receivables of $60.0 million and $58.5 million,
respectively, had been sold to third parties and is reflected as a
reduction to accounts receivable. The increase in pooled receivable sales
from September 29, 2001 is included in cash flows from operating activities
in the Consolidated Statements of Cash Flows. Losses on sales were
immaterial.
NOTE C-INVENTORIES
Inventories consist of the following: MARCH 30, 2002 SEPTEMBER 29, 2001
(IN THOUSANDS)
Chicken:
Live chicken and hens $ 98,499 $ 97,073
Feed, eggs and other 69,135 77,970
Finished chicken products 73,032 70,493
240,666 245,536
Turkey:
Live turkey and hens 30,834 30,694
Feed, eggs and other 8,032 3,906
Finished turkey products 43,090 34,264
81,956 68,864
Total Inventory $322,622 $314,400
On March 12, 2002 an outbreak of low-pathogenic avian influenza was
discovered in Virginia, a disease contagious to turkey, chicken and other
birds. Due to the outbreak of low pathogenic avian influenza we reduced
approximately $5.5 million of turkey inventory during the quarter ended
March 30, 2002 in anticipation of the flocks being destroyed. (See
management discussions in Management Discussion and Analysis of Financial
and Results of Operations for further information.)
NOTE D-LONG TERM DEBT
At March 30, 2002, the Company maintained $130.0 million in revolving
credit facilities and $400.0 million in a secured revolving/term borrowing
facility. The $400.0 million revolving/term borrowing facility provides
for $285.0 million and $115.0 million of 10-year and 7-year commitments,
respectively. Borrowings under these facilities are split pro rata between
the 10-year and 7-year maturities as they occur. The credit facilities
provide for interest at rates ranging from LIBOR plus five-eights percent
to LIBOR plus two and three-quarters percent depending upon the Company's
total debt to capitalization ratio. Interest rates on debt outstanding
under these facilities at March 30, 2002 ranged from LIBOR plus one and
one-quarter percent to LIBOR plus two and one-quarter percent. These
facilities are secured by inventory and fixed assets or are unsecured.
At March 30, 2002, approximately $32.3 million was available under the
revolving credit facilities, borrowing under these facilities, are intended
to be paid within one year and are classified as current liabilities and
$274.0 million was available under the revolving/term borrowing
facility. Annual maturities of long-term debt for the remainder of fiscal
2002 and for the five years subsequent to March 30, 2002 are: 2002 --
$2.5 million; 2003 -- $6.4 million; 2004 -- $11.8 million; 2005 -- $11.5
million; and 2006 -- $50.6 million.
NOTE E -- INCOME TAXES
Effective January 1, 2002, the Mexican Congress passed the Mexican tax
reform (the "Reform") legislation, which eliminated the previous tax
exemption under Simplified Regime for the Company's Mexico subsidiaries.
The Reform requires the Company's Mexican subsidiaries to calculate and pay
taxes under a new simplified regime pursuant to Mexico's income tax laws
beginning January 1, 2002, subject to certain transitional provisions. The
primary transitional provision was an exit calculation, which generated a
net operating loss carryforward for Mexican income tax purposes.
As a result of the Reform, the Company recognized a tax benefit of
approximately $9.7 million as of January 1, 2002, primarily to reflect the
benefit of the net operating loss carryforward for Mexican tax purposes.
The additional deferred tax assets and liabilities resulting from the
enactment of the Reform effective January 1, 2002 are summarized as
follows:
Deferred tax liabilities:
Tax over book depreciation $17,468
Inventory valuation 6,905
Other 5,559
Total deferred tax liabilities 29,932
Deferred tax assets:
Mexico net operating losses (47,732)
Other (524)
Total deferred tax asset (48,256)
Less:
Valuation allowance 8,613
Net deferred tax (assets) ($ 9,711)
The valuation allowance reflects the portion of the net operating losses
attributable to certain Mexican subsidiaries that currently do not have
significant operations and, accordingly, such losses are expected to expire
unutilized.
The Mexican tax operating loss carryforwards expire in the years ranging
from 2008 through 2012.
NOTE F-RELATED PARTY TRANSACTIONS
The major stockholder of the Company owns a chicken growing and an egg
laying operation.
Transactions with related parties are summarized as follows:
Three Months Ended Six Months Ended
March 30, March 31, March 30, March 31,
2002 2001 2002 2001
(in thousands)
Contract egg grower fees
to major stockholder $ - $ 3,852 $ 8 $ 5,100
Lease payments on commercial
egg property 188 188 376 188
Chick, feed and other sales
to major stockholder 6,950 7,345 44,060 38,115
Live chicken purchases from
major stockholder 23,623 25,607 44,173 39,053
On December 29, 2000 the Company entered into an agreement to lease a
commercial egg property and assume all of the ongoing costs of the
operation from the Company's major stockholder. The Company had previously
purchased the eggs produced from this operation pursuant to a contract
grower agreement. The lease term runs for ten years with a monthly lease
payment of $62,500. The Company has an option to extend the lease for an
additional five years, with an option at the end of the lease to purchase
the property at fair market value as determined by an independent
appraisal.
The Company had accounts receivable of approximately $0.1 million at March
30, 2002 from its major stockholder and related parties. Additionally, the
Company had $0.2 million in notes receivable from officers of the Company.
NOTE G-CONTINGENCIES
In January of 1998, seventeen of our current and/or former employees filed
the case of "Octavius Anderson, et al. v. Pilgrim's Pride Corporation" in
the United States District Court for the Eastern District of Texas, Lufkin
Division claiming Pilgrim's Pride violated requirements of the Fair Labor
Standards Act. The suit alleged Pilgrim's Pride failed to pay employees
for all hours worked. The suit generally alleged that (1) employees should
be paid for time spent to put on, take off, and clean certain personal gear
at the beginning and end of their shifts and breaks and (2) the use of a
master time card or production "line" time fails to pay employees for all
time actually worked. Plaintiffs sought to recover unpaid wages plus
liquidated damages and legal fees. Approximately 1,700 consents to join as
plaintiffs were filed with the court by current and/or former employees.
During the week of March 5, 2001, the case was tried in the Federal Court
of the Eastern District of Texas, Lufkin, Texas. The Company prevailed at
the trial with a judgment issued by the judge, which found no evidence
presented to support the plaintiffs' allegations. The plaintiffs have
filed an appeal in the Fifth Circuit Court of Appeals to reverse the
judge's decision. The plaintiff's brief was submitted to the court on
November 5, 2001. Pilgrim's Pride's response to the plaintiff's brief to
the Fifth Circuit Court of Appeals was submitted on December 5, 2001 and
oral arguments have been set for the week of June 3, 2002. Appellants
filed a short reply brief. The National Chicken Council has filed an
Amicus Curiae brief in support of our position on this appeal, which was
accepted by the court. Neither the likelihood of an unfavorable outcome
nor the amount of ultimate liability, if any, with respect to this case can
be determined at this time. The Company does not expect this matter,
individually or collectively, to have a material impact on our financial
position, operations or liquidity. Substantially similar suits have been
filed against other integrated poultry companies, including the Betty
Kennell case discussed below, a number of which have favorable results at
the trial or appellate court level.
In August of 2000, four of our current and/or former employees filed the
case of "Betty Kennell, et al. v. Wampler Foods, Inc." in the United
States District Court for the Northern District of West Virginia, claiming
we violated requirements of the Fair Labor Standards Act. The suit
generally makes the same allegations as Anderson v. Pilgrim's Pride
discussed above. Plaintiffs seek to recover unpaid wages plus liquidated
damages and legal fees. Approximately 150 consents to join as plaintiffs
were filed with the court by current and/or former employees. No trial
date has been set. To date, only limited discovery has been performed.
Neither the likelihood of an unfavorable outcome nor the amount of ultimate
liability, if any, with respect to this case can be determined at this
time. We do not expect this matter, individually or collectively, to have
a material impact on our financial position, operations or liquidity.
NOTE H - BUSINESS SEGMENTS
Since the acquisition of WLR Foods on January 27, 2001, the Company
operates in two reportable business segments as (1) a producer of chicken
and other products and (2) a producer of turkey products.
The Company's chicken and other products segment primarily includes sales
of chicken products the Company produces and purchases for resale in the
United States and Mexico, and also includes table eggs and feed. The
Company's chicken and other products segment conducts separate operations
in the United States and Mexico and is reported as two separate
geographical areas. The Company's turkey segment includes sales of turkey
products produced in our turkey operation recently acquired from WLR Foods,
whose operations are exclusively in the United States.
Inter-area sales and inter-segment sales, which are not material, are
accounted for at prices comparable to normal trade customer sales.
Corporate assets and expenses are included with chicken and other products.
The following table presents certain information regarding the Company's
segments:
Three Months Ended Six Months Ended
March 30, March 31, March 30, March 31,
2002 2001* 2002 2001*
(in thousands)
Net Sales to Customers:
Chicken and Other Products:
United States $449,564 $402,909 $897,627 $710,461
Mexico 80,376 75,844 171,292 154,324
Sub-total 529,940 478,753 1,068,919 864,785
Turkey 70,813 62,840 187,864 62,840
Total $600,753 $541,593 $1,256,783 $927,625
Operating Income (Loss):
Chicken and Other Products:
United States $ 4,971 $ 1,795 $ 14,328 $ 22,426
Mexico (513) (5,201) 7,957 (2,621)
Sub-total 4,458 (3,406) 22,285 19,805
Turkey (8,830) (1,866) (3,327) (1,866)
Total $(4,372) $(5,272) $ 18,958 $ 17,939
Depreciation and Amortization
Chicken and Other Products:
United States $12,552 $ 8,797 $ 23,344 $ 14,685
Mexico 3,377 1,792 6,794 4,571
Sub-total 15,929 10,589 30,138 19,256
Turkey 1,717 1,564 4,907 1,564
Total $17,646 $12,153 $ 35,045 $ 20,820
* In 2001, the Company identified certain products produced by the former
WLR Foods that were included in Turkey net sales but were more properly
classified as United States Chicken and Other Products net sales. As a
result, $8.6 million has been reclassified from Turkey net sales to United
States Chicken and Other Products net sales, for each of the six months
ended March 30, 2001 and the three months ended March 30, 2001.
Additionally, $2.1 million has been reclassified from Turkey operating loss
to United States Chicken and Other Products operating income to properly
reflect operating income after the reclassification of the net sales for
the six months ended March 30, 2001 and the three months ended March 30,
2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Profitability in the poultry industry is materially affected by the
commodity prices of feed ingredients, chicken and turkey, which are
determined by supply and demand factors. As a result, the chicken and
turkey industries are subject to cyclical earnings fluctuations. Cyclical
earnings fluctuations can be mitigated somewhat by:
- Business strategy;
- Product mix;
- Sales and marketing plans; and
- Operating efficiencies.
In an effort to reduce price volatility and to generate higher, more
consistent profit margins, we have concentrated on the production and
marketing of prepared foods products. Prepared foods products generally
have higher profit margins than our other products. Also, the production
and sale in the U.S. of prepared foods products reduces the impact of the
costs of feed ingredients on our profitability. Feed ingredient purchases
are the single largest component of our cost of goods sold, representing
approximately 30.1% of our cost of goods sold in fiscal 2001. The
production of feed ingredients is positively or negatively affected
primarily by weather patterns throughout the world, the global level of
supply inventories, demand for feed ingredients and the agricultural
policies of the United States and foreign governments. As further
processing is performed, feed ingredient costs become a decreasing
percentage of a product's total production costs, thereby reducing their
impact on our profitability. Products sold in this form enable us to
charge a premium, reduce the impact of feed ingredient costs on our
profitability and improve and stabilize our profit margins.
The following table presents certain information regarding our segments:
Three Months Ended Six Months Ended
March 30, March 31, March 30, March 31,
2002 2001* 2002 2001*
(in thousands)
Net Sales to Customers:
Chicken and Other Products:
United States $449,564 $402,909 $897,627 $710,461
Mexico 80,376 75,844 171,292 154,324
Sub-total 529,940 478,753 1,068,919 864,785
Turkey 70,813 62,840 187,864 62,840
Total $600,753 $541,593 $1,256,783 $927,625
Operating Income (Loss):
Chicken and Other Products:
United States $ 4,971 $ 1,795 $ 14,328 $ 22,426
Mexico (513) (5,201) 7,957 (2,621)
Sub-total 4,458 (3,406) 22,285 19,805
Turkey (8,830) (1,866) (3,327) (1,866)
Total $(4,372) $(5,272) $ 18,958 $ 17,939
Depreciation and Amortization
Chicken and Other Products:
United States $12,552 $ 8,797 $ 23,344 $ 14,685
Mexico 3,377 1,792 6,794 4,571
Sub-total 15,929 10,589 30,138 19,256
Turkey 1,717 1,564 4,907 1,564
Total $17,646 $12,153 $ 35,045 $ 20,820
* In 2001, the Company identified certain products produced by the former
WLR Foods that were included in Turkey net sales but were more properly
classified as United States Chicken and Other Products net sales. As a
result, $8.6 million has been reclassified from Turkey net sales to United
States Chicken and Other Products net sales, for each of the six months
ended March 30, 2001 and the three months ended March 30, 2001.
Additionally, $2.1 million has been reclassified from Turkey operating loss
to United States Chicken and Other Products operating income to properly
reflect operating income after the reclassification of the net sales for
the six months ended March 30, 2001 and the three months ended March 30,
2001.
The following table presents certain items as a percentage of net sales for
the periods indicated.
Percentage of Net Sales
Three Months Ended Six Months Ended
March March March March
30, 2002 31, 2001 30, 2002 31, 2001
Net Sales 100.0 % 100.0 % 100.0 % 100.0 %
Costs and Expenses:
Cost of sales 95.2 94.6 93.1 91.8
Gross profit 4.8 5.4 6.9 8.2
Selling, general
and administrative 5.5 6.4 5.4 6.3
Operating (Loss)
Income (0.7) (1.0) 1.5 1.9
Interest Expense 1.2 1.3 1.3 1.2
Income (Loss) before
Income Taxes (2.0) (2.2) 0.3 0.7
Net Income (Loss) 0.2 (1.8) 1.1 0.3
RESULTS OF OPERATIONS
On January 27, 2001, we completed the acquisition of WLR Foods, a
vertically integrated producer of chicken and turkey products located in
the eastern United States. Accordingly, the results of the former WLR
Foods' operations are included in our second quarter ended and first six
months ended March 30, 2002. In the prior year, WLR Foods' results from
and after January 27, 2001 are included in our second quarter ended and
first six months ended March 31, 2001.
On March 12, 2002 an outbreak of low-pathogenic avian influenza was
discovered in Virginia, a disease contagious to turkey, chicken and other
birds. Due to the outbreak of low pathogenic avian influenza we reduced
approximately $5.5 million of turkey inventory during the quarter ended
March 30, 2002 in anticipation of the flocks being destroyed.
To date, the avian influenza outbreak has been limited to certain turkey
operations in Virginia and chicken operations in close proximity thereto.
Although we expect the outbreak to have a significant negative financial
impact on our turkey operations through at least the second quarter of
fiscal 2003, the severity of the effect on our results of operations will
depend upon a number of factors outside of our control, including when and
to what extent the avian influenza outbreak is contained, the terms on
which we can replace the affected production capacity in the short-term and
reestablish the affected production capacity in the longer-term, the effect
the reduced supply of poultry products caused by the outbreak will have on
the commodity prices of poultry products, and the extent and levels of
governmental subsidies, if any. Assuming that the outbreak has been
contained, we currently estimate that the production and the resulting
sales from our turkey operation will be significantly reduced over the next
twelve months reducing operating income in each of the third and fourth
quarters of fiscal 2002 by an estimated $2.0 - $3.0 million, when compared
to the comparable periods of the prior fiscal year and will reduce
operating income for the first six months of fiscal 2003 by approximately
$20.0 million, when compared to the comparable period of the prior fiscal
year. However, there can be no assurance that the avian influenza outbreak
has been contained or that the negative impact of the outbreak on our
results of operations will not materially exceed these estimates.
FISCAL SECOND QUARTER 2002 COMPARED TO FISCAL SECOND QUARTER 2001
CONSOLIDATED NET SALES. Consolidated net sales were $600.8 million for the
second quarter of fiscal 2002, an increase of $59.2 million, or 10.9%, from
the second quarter of fiscal 2001. The increase in consolidated net sales
resulted from a $44.7 million increase in U.S. chicken sales to $401.0
million, an $8.0 million increase in turkey sales to $70.8 million, a $4.5
million increase in Mexico chicken sales to $80.4 million and a $2.0
million increase in sales of other U.S. products to $48.6 million. The
increase in U.S. chicken sales was primarily due to a 15.5% increase in
dressed pounds produced, which resulted primarily from the inclusion of
three months results in this year's quarter as opposed to two months
results for the same period last year from the acquisition of WLR Foods,
offset partially by a 2.6% decrease in total revenue per dressed pound
produced. The 12.7% increase in turkey sales was due to the acquisition of
WLR Foods, effective January 27, 2001. The $2.0 million increase in sales
of other U.S. products to $48.6 million was primarily due to higher volume
in the Company's wholesale feed operations and increased sales of other
products by the Company's distribution centers. The $4.5 million increase
in Mexico chicken sales was primarily due to a 13.9% increase in average
revenue per dressed pound produced offset partially by a 7.0% decrease in
dressed pounds produced.
COST OF SALES. Consolidated cost of sales was $572.1 million in the
second quarter of fiscal 2002, an increase of $59.7 million, or 11.7%,
compared to the second quarter of fiscal 2001. The U.S. operations
accounted for $61.2 million of the increase in the cost of sales, which was
offset partially by a $1.5 million decrease in the cost of sales of our
Mexico operations.
The cost of sales increase in our U.S. operations of $61.2 million was due
primarily to the acquisition of WLR Foods. $15.2 million of the increase
related to turkey operations, which includes a $5.5 million turkey
inventory write down related to the low pathogenic avian influenza
described above. The increase in cost of sales for chicken products also
resulted from increased production of higher cost prepared foods products.
The $1.5 million decrease in cost of sales in our Mexico operations was
primarily due to a 7.0% decrease in dressed pounds produced.
GROSS PROFIT. Gross profit was $28.6 million for the second quarter of
fiscal 2002, a decrease of $0.6 million, or 2.0%, over the same period last
year. Gross profit as a percentage of sales decreased to 4.8% in the second
quarter of fiscal 2002, from 5.4% in the second quarter of fiscal 2001 due
primarily to the negative effects of the avian influenza outbreak in our
Eastern Division offset by improved operating efficiencies.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling,
general and administrative expenses were $33.0 million in the second
quarter of fiscal 2002 and $34.5 million in the second quarter of fiscal
2001. The $1.5 million decrease was due primarily synergies resulting from
the WLR Foods acquisition. Consolidated selling, general and
administrative expenses as a percentage of sales decreased in the second
quarter of fiscal 2002 to 5.5%, compared to 6.4% in the second quarter of
fiscal 2001, due primarily to synergies resulting from the WLR Foods
acquisition.
OPERATING (LOSS). Consolidated operating loss was $4.4 million for the
second quarter of fiscal 2002, decreasing by approximately $0.9 million,
when compared to the second quarter of fiscal 2001.
INTEREST EXPENSE. Consolidated net interest expense increased 2.5% to $7.3
million in the second quarter of fiscal 2002, when compared to $7.1 million
for the second quarter of fiscal 2001, due to higher outstanding balances
offset partially by lower interest rates.
INCOME TAX BENEFIT. Consolidated income tax benefit in the second quarter
of fiscal 2002 increased to $13.4 million compared to $2.3 million in the
second quarter of fiscal 2001. This increase in benefit resulted primarily
from a $9.7 million tax benefit from changes in the Mexico tax laws
becoming effective this quarter.
Based on the passage of the new Mexico tax law, the Company anticipates
that the effective tax rate on Mexican earnings will be approximately 20%
in subsequent periods. However, the significant Mexican tax loss
carryforward will limit cash payments for taxes (see note E).
FIRST SIX MONTHS OF FISCAL 2002 COMPARED TO FIRST SIX MONTHS OF FISCAL 2001
CONSOLIDATED NET SALES. Consolidated net sales were $1.3 billion for the
first six months of fiscal 2002, an increase of $329.2 million, or 35.5%,
from the first six months of fiscal 2001. The increase in consolidated net
sales resulted from a $181.1 million increase in U.S. chicken sales to
$803.2 million, a $125.0 million increase in turkey sales to $187.9
million, a $17.0 million increase in Mexico chicken sales to $171.3 million
and a $6.9 million increase in sales of other U.S. products to $94.4
million. The increase in U.S. chicken sales was primarily due to a 32.5%
increase in dressed pounds produced, which resulted primarily from the
acquisition of WLR Foods, offset partially by a 3.1% decrease in total
revenue per dressed pound produced. The increase in turkey sales was due
to the inclusion of six months results in this year's first six months as
opposed to two months results for the same period last year from the
acquisition of WLR Foods. The $17.0 million increase in Mexico chicken
sales was primarily due to an 11.2% increase in average revenue per dressed
pound produced offset partially by a 0.2% decrease in dressed pounds
produced. The $6.9 million increase in sales of other U.S. products was
primarily due to poultry by-products sales price increases and increase in
sales of other products.
COST OF SALES. Consolidated cost of sales was $1.2 billion in the first
six months of fiscal 2002, an increase of $319.0 million, or 37.5 %
compared to the first six months of fiscal 2001. The U.S. operations
accounted for $315.6 million of the increase in the cost of sales and our
Mexico operations accounted for $3.4 million of the increase.
The cost of sales increase in our U.S. operations of $315.6 million was due
primarily to the acquisition of WLR, $120.9 million of which is related to
the turkey operations, which included a $5.5 million inventory write down
related to an outbreak of a low pathogenic avian influenza. The increase
in cost of sales of chicken products also resulted from increased
production of higher cost prepared foods products.
The $3.4 million cost of sales increase in our Mexico operations was
primarily due to a 2.5% increase in dressed pounds produced.
GROSS PROFIT. Gross profit was $86.5 million for the first six months of
fiscal 2002, an increase of $10.1 million, or 13.2%, over the same period
last year, due primarily to the acquisition of WLR Foods. Gross profit as a
percentage of sales decreased to 6.9% in the first six months of fiscal
2002, from 8.2% in the first six months of fiscal 2001 primarily due to
increased operating expenses from the avian influenza in our Eastern
Division.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling,
general and administrative expenses were $67.5 million in the first six
months of fiscal 2002 and $58.4 million in the first six months of fiscal
2001. The $9.1 million increase was due primarily to the acquisition of WLR
Foods. Consolidated selling, general and administrative expenses as a
percentage of sales decreased in the first six months of fiscal 2002 to
5.4%, compared to 6.3% in the first six months of fiscal 2001, due
primarily to synergies resulting from the WLR Foods acquisition.
OPERATING INCOME. Consolidated operating income remained relatively stable
at $19.0 million for the first six months of fiscal 2002, increasing by
approximately $1.0 million, when compared to the first six months of fiscal
2001.
INTEREST EXPENSE. Consolidated net interest expense increased 41.1% to
$15.8 million in the first six months of fiscal 2002, when compared to
$11.2 million for the first six months of fiscal 2001, due to higher
outstanding balances partially offset by lower interest rates.
INCOME TAX EXPENSE. Consolidated income tax benefit in the first six
months of fiscal 2002 was $10.7 million compared to an income tax expenses
of $4.0 million in the first six months of fiscal 2001. This decrease was a
result of a $9.7 million income tax benefit resulting from changes in the
Mexico tax laws and from lower U.S. pre-tax earnings.
LIQUIDITY AND CAPITAL RESOURCES
WE MAINTAIN $130.0 MILLION IN REVOLVING CREDIT FACILITIES AND $400.0
MILLION IN A SECURED REVOLVING/TERM BORROWING FACILITY. THE $400.0 MILLION
REVOLVING/TERM BORROWING FACILITY PROVIDES FOR $285.0 MILLION AND $115.0
MILLION OF 10-YEAR AND 7-YEAR COMMITMENTS, RESPECTIVELY. BORROWINGS UNDER
THIS FACILITY ARE SPLIT PRO RATA BETWEEN THE 10-YEAR AND 7-YEAR MATURITIES
AS THEY OCCUR. THE CREDIT FACILITIES PROVIDE FOR INTEREST AT RATES RANGING
FROM LIBOR PLUS FIVE-EIGHTHS PERCENT TO LIBOR PLUS TWO AND THREE-QUARTERS
PERCENT, DEPENDING UPON OUR TOTAL DEBT TO CAPITALIZATION RATIO. INTEREST
RATES ON DEBT OUTSTANDING UNDER THESE FACILITIES AS OF MARCH 30, 2002
RANGED FROM LIBOR PLUS ONE AND ONE-QUARTER PERCENT TO LIBOR PLUS TWO AND
ONE-QUARTER PERCENT. THESE FACILITIES ARE SECURED BY INVENTORY AND FIXED
ASSETS.
AT MARCH 30, 2002, $32.3 MILLION WAS AVAILABLE UNDER THE REVOLVING CREDIT
FACILITIES AND $274.0 MILLION WAS AVAILABLE UNDER THE REVOLVING/TERM
BORROWING FACILITY.
IN 1998, WE ENTERED INTO AN ASSET SALE AGREEMENT TO SELL UP TO $60 MILLION
OF ACCOUNTS RECEIVABLE, WHICH AGREEMENT EXPIRES IN JUNE 2003. IN
CONNECTION WITH THE ASSET SALE AGREEMENT, WE SELL, ON A REVOLVING BASIS,
CERTAIN OF OUR TRADE RECEIVABLES (THE "POOLED RECEIVABLES") TO A SPECIAL
PURPOSE CORPORATION WHOLLY OWNED BY US, WHICH IN TURN SELLS A PERCENTAGE
OWNERSHIP INTEREST TO THIRD PARTIES. AT MARCH 30, 2002 AND SEPTEMBER 29,
2001, AN INTEREST IN THESE POOLED RECEIVABLES OF $60.0 MILLION AND $58.5
MILLION, RESPECTIVELY, HAD BEEN SOLD TO THIRD PARTIES AND IS REFLECTED AS A
REDUCTION IN ACCOUNTS RECEIVABLE. THESE TRANSACTIONS HAVE BEEN RECORDED AS
SALES IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT NO.
140, ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND
EXTINGUISHMENTS OF LIABILITIES. THE INCREASE IN POOLED RECEIVABLE SALES
FROM SEPTEMBER 29, 2001 IS INCLUDED IN CASH FLOWS FROM OPERATING ACTIVITIES
IN OUR CONSOLIDATED STATEMENTS OF CASH FLOWS. LOSSES ON THESE SALES WERE
IMMATERIAL.
ON JUNE 29, 1999, THE CAMP COUNTY INDUSTRIAL DEVELOPMENT CORPORATION ISSUED
$25.0 MILLION OF VARIABLE-RATE ENVIRONMENTAL FACILITIES REVENUE BONDS
SUPPORTED BY LETTERS OF CREDIT OBTAINED BY PILGRIM'S PRIDE. WE MAY DRAW
FROM THESE PROCEEDS OVER THE CONSTRUCTION PERIOD FOR NEW SEWAGE AND SOLID
WASTE DISPOSAL FACILITIES AT A POULTRY BY-PRODUCTS PLANT TO BE BUILT IN
CAMP COUNTY, TEXAS. WE ARE NOT REQUIRED TO BORROW THE FULL AMOUNT OF THE
PROCEEDS FROM THE BONDS. ALL AMOUNTS BORROWED FROM THESE FUNDS WILL BE DUE
IN 2029. THE AMOUNTS THAT WE BORROW WILL BE REFLECTED AS DEBT WHEN RECEIVED
FROM THE CAMP COUNTY INDUSTRIAL DEVELOPMENT CORPORATION. THE INTEREST RATES
ON AMOUNTS BORROWED WILL CLOSELY FOLLOW THE TAX-EXEMPT COMMERCIAL PAPER
RATES. PRESENTLY, THERE ARE NO BORROWINGS OUTSTANDING UNDER THE BONDS.
AT MARCH 30, 2002, OUR WORKING CAPITAL DECREASED TO $149.9 MILLION AND OUR
CURRENT RATIO DECREASED TO 1.54 TO 1, COMPARED WITH WORKING CAPITAL OF
$203.4 MILLION AND A CURRENT RATIO OF 1.85 TO 1 AT SEPTEMBER 29, 2001,
PRIMARILY DUE TO INCREASED SHORT TERM BORROWINGS USED TO REPAY CERTAIN
LONG-TERM DEBT.
TRADE ACCOUNTS AND OTHER RECEIVABLES WERE $82.7 MILLION AT MARCH 30, 2002,
COMPARED TO $95.0 MILLION AT SEPTEMBER 29, 2001. THE 13.0% DECREASE IN
TRADE ACCOUNTS AND OTHER RECEIVABLES WAS PRIMARILY DUE TO NORMAL SEASONAL
VARIATIONS. EXCLUDING THE SALE OF RECEIVABLES, TRADE ACCOUNTS AND OTHER
RECEIVABLES WOULD HAVE DECREASED $10.8 MILLION TO $142.7 MILLION AT THE END
OF THE SECOND QUARTER OF FISCAL 2002 FROM $153.5 MILLION AT THE END OF
FISCAL 2001.
INVENTORIES WERE $322.6 MILLION AT MARCH 30, 2002, COMPARED TO $314.4
MILLION AT SEPTEMBER 29, 2001. THE $8.2 MILLION, OR 2.6%, INCREASE IN
INVENTORIES WAS PRIMARILY DUE TO NORMAL INCREASES IN FINISHED TURKEY
PRODUCTS INVENTORIES RELATING TO EXPECTED INCREASES IN SALES OF TURKEY
PRODUCTS IN THE HOLIDAY SEASON.
ACCOUNTS PAYABLE AND ACCRUED EXPENSES DECREASED $19.4 MILLION TO $215.4
MILLION AT MARCH 30, 2002, COMPARED TO $234.8 MILLION AT SEPTEMBER 29, 2001
DUE TO SEASONAL VARIATIONS.
CAPITAL EXPENDITURES OF $32.2 MILLION AND $60.4 MILLION, FOR THE SIX MONTHS
ENDED MARCH 30, 2002 AND MARCH 31, 2001, RESPECTIVELY, WERE INCURRED
PRIMARILY TO ACQUIRE AND EXPAND CERTAIN FACILITIES, IMPROVE EFFICIENCIES,
REDUCE COSTS AND FOR THE ROUTINE REPLACEMENT OF EQUIPMENT. WE ANTICIPATE
SPENDING APPROXIMATELY $70.0 MILLION IN FISCAL 2002 TO IMPROVE EFFICIENCIES
AND FOR THE ROUTINE REPLACEMENT OF EQUIPMENT. WE EXPECT TO FINANCE SUCH
EXPENDITURES WITH AVAILABLE OPERATING CASH FLOWS AND EXISTING CREDIT
FACILITIES.
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES WERE $23.1 MILLION
AND ($31.5) MILLION FOR THE SIX MONTHS ENDED MARCH 30, 2002 AND MARCH 31,
2001, RESPECTIVELY. THE INCREASE IN CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES IN THE FIRST SIX MONTHS OF FISCAL 2002 COMPARED TO THE FIRST SIX
MONTHS OF FISCAL 2001 WAS PRIMARILY DUE TO INCREASED NET INCOME, INCREASED
DEPRECIATION FROM THE WLR ACQUISITION AND DECREASED TRADE ACCOUNTS AND
OTHER RECEIVABLES FROM THE IMPROVED COLLECTIONS.
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES WERE ($2.8) MILLION
AND $307.6 MILLION FOR THE SIX MONTH PERIODS ENDED MARCH 30, 2002 AND MARCH
30, 2001, RESPECTIVELY. THE CASH USED IN FINANCING ACTIVITIES PRIMARILY
REFLECTS THE PAYMENTS ON NOTES PAYABLE AND LONG-TERM FINANCING AND DEBT
RETIREMENT. DURING THE SIX MONTHS ENDED MARCH 31, 2001 THE COMPANY
PURCHASED WLR FOODS, INC. USING $239.9 MILLION IN BORROWINGS TO COMPLETE
THE ACQUISITION.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes from the information provided in Item
7a of the Company's Annual Report on Form 10-K for the year ended September
29, 2001.
Forward Looking Statements
Statements of our intentions, beliefs, expectations or predictions for the
future, denoted by the words "anticipate", "believe", "estimate", "expect",
"project", "imply", "intend", "foresee" and similar expressions, are
forward-looking statements that reflect our current views about future
events and are subject to risks, uncertainties and assumptions. Such
risks, uncertainties and assumptions include the following:
* Matters affecting the poultry industry generally, including fluctuations
in the commodity prices of feed ingredients, chicken and turkey;
* Disease outbeaks affecting the production performance and/or
marketability of the Company's poultry products;
* Management of our cash resources, particularly in light of our
substantial leverage;
* Restrictions imposed by, and as a result of, our substantial leverage;
* Currency exchange rate fluctuations, trade barriers, exchange controls,
expropriation and other risks associated with foreign operations;
* Changes in laws or regulations affecting our operations, as well as
competitive factors and pricing pressures;
* Inability to effectively integrate WLR Foods or realize the associated
cost savings and operating synergies currently anticipated; and
* The impact of uncertainties of litigation as well as other risks
described in our filings with the Securities and Exchange Commission.
Actual results could differ materially from those projected in these
forward-looking statements as a result of these factors, among others, many
of which are beyond our control.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In January of 1998, seventeen of our current and/or former employees filed
the case of "Octavius Anderson, et al. v. Pilgrim's Pride Corporation" in
the United States District Court for the Eastern District of Texas, Lufkin
Division claiming Pilgrim's Pride violated requirements of the Fair Labor
Standards Act. The suit alleged Pilgrim's Pride failed to pay employees
for all hours worked. The suit generally alleged that (1) employees should
be paid for time spent to put on, take off, and clean certain personal gear
at the beginning and end of their shifts and breaks and (2) the use of a
master time card or production "line" time fails to pay employees for all
time actually worked. Plaintiffs sought to recover unpaid wages plus
liquidated damages and legal fees. Approximately 1,700 consents to join as
plaintiffs were filed with the court by current and/or former employees.
During the week of March 5, 2001, the case was tried in the Federal Court
of the Eastern District of Texas, Lufkin, Texas. The Company prevailed at
the trial with a judgment issued by the judge, which found no evidence
presented to support the plaintiffs' allegations. The plaintiffs have
filed an appeal in the Fifth Circuit Court of Appeals to reverse the
judge's decision. The plaintiff's brief was submitted to the court on
November 5, 2001. Pilgrim's Pride's response to the plaintiff's brief to
the Fifth Circuit Court of Appeals was submitted on December 5, 2001 and
oral arguments have been set for the week of June 3, 2002. Appellants
filed a short reply brief. The National Chicken Council has filed an
Amicus Curiae brief in support of our position on this appeal, which was
accepted by the court. Neither the likelihood of an unfavorable outcome
nor the amount of ultimate liability, if any, with respect to this case can
be determined at this time. The Company does not expect this matter,
individually or collectively, to have a material impact on our financial
position, operations or liquidity. Substantially similar suits have been
filed against other integrated poultry companies, including the Betty
Kennell case discussed below, a number of which have been favorably
resolved at the trial or appellate court level.
In August of 2000, four of our current and/or former employees filed the
case of "Betty Kennell, et al. v. Wampler Foods, Inc." in the United
States District Court for the Northern District of West Virginia, claiming
we violated requirements of the Fair Labor Standards Act. The suit
generally makes the same allegations as Anderson v. Pilgrim's Pride
discussed above. Plaintiffs seek to recover unpaid wages plus liquidated
damages and legal fees. Approximately 150 consents to join as plaintiffs
were filed with the court by current and/or former employees. No trial
date has been set. To date, only limited discovery has been performed.
Neither the likelihood of an unfavorable outcome nor the amount of ultimate
liability, if any, with respect to this case can be determined at this
time. We do not expect this matter, individually or collectively, to have
a material impact on our financial position, operations or liquidity.
The Company is subject to various other legal proceedings and claims, which
arise in the ordinary course of its business. In the opinion of
management, the amount of ultimate liability with respect to these actions
will not materially affect the financial position, results of operations or
cash flows of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pilgrim's Pride Corporation held its Annual Meeting of Shareholders on
January 31, 2002. The meeting was held to elect the Board of Directors for
the ensuing year; to appoint Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending September 28, 2002; and to transact
such other business as may be properly brought before the meeting. There
were 12,335,507 Class A shares and 26,479,675 Class B shares represented
with one vote per share for Class A shares (12,335,507 votes in the
aggregate) and twenty votes per share for Class B shares (529,593,500 votes
in the aggregate). With regard to the election of Directors for the ensuing
year, the following votes were cast:
NOMINEE FOR AGAINST WITHHELD
Lonnie "Bo" Pilgrim
Class A 12,034,820 -- 300,687
Class B 490,539,280 -- 39,054,220
Clifford E. Butler
Class A 12,006,640 -- 328,867
Class B 504,047,680 -- 25,545,820
David Van Hoose
Class A 12,006,392 -- 329,115
Class B 504,040,660 -- 25,552,840
Richard A. Cogdill
Class A 12,175,401 -- 160,106
Class B 508,329,920 -- 21,263,580
Lonnie Ken Pilgrim
Class A 12,006,758 -- 328,749
Class B 490,584,100 -- 39,009,400
Charles L. Black
Class A 12,283,320 -- 52,187
Class B 524,810,920 -- 4,782,580
S. Key Coker
Class A 12,282,393 -- 53,114
Class B 524,855,680 -- 4,737,820
Vance C. Miller, Sr.
Class A 12,282,096 -- 53,411
Class B 524,788,200 -- 4,805,300
James G. Vetter, Jr.
Class A 12,114,674 -- 220,833
Class B 524,476,080 -- 9,117,420
Donald L. Wass, Ph.D.
Class A 12,283,373 -- 52,134
Class B 524,788,260 -- 4,805,240
All Directors were elected by the above results.
With regard to ratifying the appointment of Ernst & Young LLP as the
Company's independent auditors for fiscal 2001, the following votes were
cast:
For Against Abstained
Class A 12,328,520 5,540 1,447
Class B 529,445,240 77,600 70,660
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Number
10.29 Promissory note dated January 4, 2002 signed by David Van Hoose
in favor of Pilgrim's Pride Corporation.
10.30 Promissory note dated January 4, 2002 signed by Clifford E.
Butler in favor of Pilgrim's Pride Corporation.
10.31 Promissory note dated January 4, 2002 signed by Richard A.
Cogdill in favor of Pilgrim's Pride Corporation.
10.32 Promissory note dated January 4, 2002 signed by Robert L. Hendrix
in favor of Pilgrim's Pride Corporation.
10.33 Promissory note dated January 4, 2002 signed by Mike Murray in
favor of Pilgrim's Pride Corporation.
10.34 Promissory note dated January 4, 2002 signed by O. B. Goolsby in
favor of Pilgrim's Pride Corporation.
10.35 Promissory note dated January 4, 2002 signed by Lonnie Ken
Pilgrim in favor of Pilgrim's Pride Corporation.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the fiscal
quarter ending March 30, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PILGRIM'S PRIDE CORPORATION
Date May 14, 2002 /s/ Richard A. Cogdill
Richard A. Cogdill
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
in his respective capacity as such
EXHIBIT 10.29
PROMISSORY NOTE
Amount of Promissory Note: $140,418.07 Date of Promissory Note: January
4, 2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $140,418.07 with interest from the
date of issue to the date of maturity or payment at the rate of two and
sixty nine one hundreds percent (2.69%) per annum. This promissory note
("Note") shall be paid in fifty one (51) equal installments of $2,790.49
beginning on January 11, 2002 and for ease of payment, Payee agrees and the
Promisor hereby requests, that such payment be deducted from such
Employee's weekly pay amount owed to Promissor by Pilgrim's Pride
Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ David A. Van Hoose
David A. Van Hoose
EXHIBIT 10.30
PROMISSORY NOTE
Amount of Promissory Note: $9,441.49 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $9,441.49 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $187.63 beginning on
January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ Clifford E. Butler
Clifford E. Butler
EXHIBIT 10.31
PROMISSORY NOTE
Amount of Promissory Note: $62,462.23 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $62,462.23 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $1,241.29 beginning
on January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ Richard A. Cogdill
Richard A. Cogdill
EXHIBIT 10.32
PROMISSORY NOTE
Amount of Promissory Note: $12,561.35 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $12,561.35 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $249.63 beginning on
January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ Robert L. Hendrix
Robert L. Hendrix
EXHIBIT 10.33
PROMISSORY NOTE
Amount of Promissory Note: $11,494.29 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $11,494.29 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $228.42 beginning on
January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ Mike Murray
Mike Murray
EXHIBIT 10.34
PROMISSORY NOTE
Amount of Promissory Note: $41,839.27 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $41,839.27 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $831.46 beginning on
January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ O. B. Goolsby
O. B. Goolsby
EXHIBIT 10.35
PROMISSORY NOTE
Amount of Promissory Note: $35,722.67 Date of Promissory Note: January 4,
2002.
I (the "Promisor" or "Employee"), promise to pay to the order of Pilgrim's
Pride Corporation or to its issue or Estate (the "Payee" or "Pilgrim"), at
P.O. Box 93, Pittsburg, Texas 75686 (or at such other place as the Payee
may designate in writing) the sum of $35,722.67 with interest from the date
of issue to the date of maturity or payment at the rate of two and sixty
nine one hundreds percent (2.69%) per annum. This promissory note ("Note")
shall be paid in fifty one (51) equal installments of $709.61 beginning on
January 11, 2002 and for ease of payment, Payee agrees and the Promisor
hereby requests, that such payment be deducted from such Employee's weekly
pay amount owed to Promissor by Pilgrim's Pride Corporation.
This Note, along with all accrued interest thereon, shall be due the
earlier of December 31, 2002 or upon termination of such Employee's
employment relationship with Pilgrim's Pride Corporation. Employee
authorizes Pilgrim's Pride Corporation to withhold, up to the amount
remaining owed under this Note, any payments due Employee by Pilgrim's for
wages (including earned vacation pay), business expenses, etc. upon
resignation or termination in full or partial fulfillment of Employee's
obligation to Pilgrim's under this Note. After such withholding, any
balance remaining on the Note will continue as a liability owed by Employee
to Pilgrim's and adequate and mutually agreed to repayment terms will be
arranged. Employee also agrees that should it become necessary in order to
satisfy any remaining obligation after termination, he/she will immediately
request a withdrawal of the necessary funds from his/her 401 (K) Plan
through the Employer, and pay the net of such proceeds, after taxes,
penalties and interest have been deducted from the gross proceeds
withdrawn, to Employee to satisfy the remaining obligation. The Employee
will be solely responsible for the payment of all taxes, penalties and
interest associated with the withdrawal of funds from his/her 401 (K) Plan.
The Promisor(s) reserve the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
We the makers, sureties, endorsers, guarantors or any other person liable
for payment of this promissory note hereby jointly and severally waive
diligence in collecting, presentment for payment, demand, dishonor and
bringing suit against any part liable hereon, and all notices, including
notice of intention to accelerate the maturity hereof, notice that such
acceleration of maturity has occurred, notice of protest, demand, dishonor
and nonpayment of the indebtedness evidenced by this promissory note; and
expressly agree to any and all extensions, renewals, partial payments,
substitutions of evidence of indebtedness and the taking, release or
substitution of any security or collateral without notice before or after
maturity without in any way affecting the liability of the makers,
sureties, endorsers, guarantors or any other person liable for the payment
of this promissory note evidenced hereby. No extension of time for the
prepayment of any of the indebtedness or any installment thereof evidenced
by this promissory note made by agreement by Payee with any person now or
hereafter liable under this promissory note shall affect the original
liability on this promissory note of the makers, sureties, endorsers,
guarantors or any other person liable for payment of this promissory note
or any installment thereof evidence thereby, even it the makers, sureties,
endorsers, guarantors or any other person liable for payment of this
promissory note evidenced hereby are not parties to such agreement.
In the event this promissory note is placed in the hands of an attorney for
collection, or in the event this promissory note is collected in whole or
in part through legal or judicial proceedings of any nature, including
bankruptcy, then the makers, sureties, endorsers, guarantors or any other
person liable for payment of this promissory note agrees and promises to
pay in addition to the remaining unpaid principal and accrued interest, if
any, on the promissory note all of the payee's cost of collection, when
incurred, including, without limitation, reasonable attorneys' fees,
irrespective of whether legal action is filed with a court of competent
jurisdiction.
The promissory note shall be construed in accordance with the laws of the
State of Texas
In no event will the interest rate stated herein be an amount less than the
Applicable Federal Rate (the "AFR") proscribed by the Internal Revenue
Service for such promissory note to have adequate stated interest for debt
instruments of this nature and term. Should the interest rate stated above
be insufficient to meet the required AFR, then such interest rate will be
adjusted accordingly retroactive to the date of issue. If the promissory
note has already been repaid in full, then such additional interest amounts
will be computed and immediately paid by the Promisor(s), along with
subsequent interest on the deficient interest through the date of payment.
If any one or more of the provisions of this promissory note are determined
to be unenforceable, in whole or in part, for any reason, the remaining
provisions shall remain full operative.
All payments of principal and interest on this promissory note shall be
paid in the legal currency of the United States of America
Signed this 4 day of JANUARY , 2002
By: /s/ Lonnie Ken Pilgrim
Lonnie Ken Pilgrim