UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported): December 30, 2005
PILGRIM'S
PRIDE CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
Delaware 1-9273 75-1285071
(State or Other Jurisdiction (Commission File
Number)
(IRS
Employer Identification
No.)
of Incorporation)
4845
US
Highway 271 North
Pittsburg, Texas 75686-0093
(Address
of Principal Executive Offices) (ZIP
Code)
Registrant's
telephone number, including area code: (903)
434-1000
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
q Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
q Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
q
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
q Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On
December 31, 2005, the Board of Directors of Pilgrim's Pride Corporation (the
"Company") adopted the Amended and Restated Pilgrim's Pride Corporation 2005
Deferred Compensation Plan (the "Amended Plan"), which amended and restated
the
Pilgrim's Pride Corporation 2005 Deferred Compensation Plan (the "Plan")
originally adopted on December 21, 2004, in order to reflect additional guidance
under the deferred compensation rules set forth in Section 409A of the Internal
Revenue Code (the "Code"), including, but not limited to, clarifying the process
for making deferral elections, the effect of revising deferral elections,
updating distribution procedures and permitting termination distributions prior
to retirement. Among the changes to the Plan, under the Amended Plan a
participant may rescind or modify his deferral election to the extent permitted
under Code Section 409A by filing the appropriate form provided by the
Administrative Committee. In addition, the distribution procedures in the
Amended Plan were modified by eliminating the requirement that a participant
attain age fifty-five before being eligible to receive termination installment
payments and by adding additional installment payment options. The Amended
Plan
also sets forth limited circumstances under which Code Section 409A would permit
the Company to delay distributions. In terms of participating companies outside
the United States, the Amended Plan provides the Administrative Committee with
the authority to adopt additional plan rules to comply with the laws of a
foreign jurisdiction. The changes to the Plan are generally effective
retroactive to January 1, 2005.
The
Company's Amended Plan is a nonqualified, unfunded deferred compensation and
supplemental savings plan that permits a select group of management or highly
compensated employees to defer the receipt of base salary or bonus. The Company
has the ability to make contributions to a participant’s account. A participant
is always fully vested in the amounts deferred to the Amended Plan; however,
any
Company contributions are subject to a six year graded vesting schedule. A
participant may elect to receive a distribution upon separation from service
with the Company or a participating subsidiary, on a specified payment date
or
in connection with a "Hardship Distribution" as defined in the Amended Plan
and,
depending upon the participant’s election, distributions will be paid as a lump
sum or in quarterly installments over a specified period. Separate distribution
elections may be made with respect to each plan year balance. Notwithstanding
the foregoing to the contrary, if on a payment date the participant’s vested
account balance is $50,000 or less, then the amount to be distributed will
be
paid in a lump sum. Amounts deferred under the Amended Plan are to be deemed
to
be invested in certain approved investments designated by the Oversight
Committee of the Board of Directors, although the Oversight Committee in its
discretion may grant each participant the right to designate how the funds
in
the participant's account shall be invested.
The
Amended Plan is filed as Exhibit 10.1 to this Current Report and is incorporated
herein by reference, and the foregoing summary is qualified in its entirety
thereby.
As
referenced in the Company's Proxy Statement for its 2006 Annual Meeting, on
November 30, 2005, the Audit Committee pre-approved the Company entering into
a
services agreement, a transportation agreement and a ground lease agreement
with
Pat Pilgrim, the son of Lonnie "Bo" Pilgrim, the Company's Chairman and largest
stockholder. Accordingly, the Company entered into a vendor service agreement
and a transportation agreement on January 3, 2006 and a ground lease agreement
on January 4, 2006 with Pat Pilgrim (collectively, the "Agreements"). The vendor
service agreement, which is attached hereto as Exhibit 10.2 and incorporated
herein by reference, provides that Pat Pilgrim will provide services to the
Company as mutually agreed upon by the parties for specified fees and charges.
The transportation agreement, which is attached hereto as Exhibit 10.3 and
incorporated herein by reference, provides that Pat Pilgrim will provide motor
contract carrier services to the Company for the transportation of grain
products and other goods and will be compensated for each shipment in accordance
with the rates set forth on IBIDTransport.com, a web-based rate management
system, or based on the delivery destination of the cargo, the total number
of
tons of cargo hauled and the agreed upon rate as contained in the applicable
purchase order. The ground lease agreement, which is attached hereto as Exhibit
10.4 and incorporated herein by reference, provides for Pat Pilgrim to lease
certain land from the Company for rent payments of $21,833.50 per year.
Management believes the terms of each of the Agreements are substantially
similar to those obtainable from unaffiliated parties.
The
foregoing summary of the Agreements is qualified in its entirety by the terms
and conditions of the Agreements.
Item
2.02. Results of Operations and Financial Condition.
The
information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any filing under
the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.
On
January 3, 2006, the Company issued a press release announcing that it had
revised its previously issued earnings guidance for its first quarter of fiscal
2006.
The
press
release is furnished as Exhibit 99.1 to this Current Report.
Item
2.05. Costs Associated with Exit or Disposal Activities.
On
December 30, 2005, the Company committed tothe restructuring of its turkey
operations described in the above-referenced press release, which will result
in
the Company ceasing the production of ground turkey and cooked turkey deli
breast meat items at it Franconia, Pennsylvania further processing plan
effective March 3, 2006. As referenced in the press release, the Company
expects to take a charge for inventory valuation adjustments in its fiscal
quarter ended December 31, 2005 that could be as much as $4 million related
to
inventories and supplies of the restructured operations. In addition, the
Company expects that it may dispose of equipment related to the restructured
operations having a net book value of approximately $.62 million, which would
result in additional charges being recorded during the remainder of fiscal
2006.
Forward-Looking
Statements: Statements contained in this Current Report that state the
intentions, hopes, beliefs, anticipations, expectations or predictions of
the
future of the Company and its management, including the earnings guidance
for
the first quarter of fiscal 2006 and the Company's expectations regarding
the
financial effects of the restructuring of its Turkey operation, are
forward-looking statements. It is important to note that the actual results
could differ materially from those projected in such forward- looking
statements. Factors that could cause actual results to differ materially
from
those projected in such forward-looking statements include: matters affecting
the poultry industry generally, including fluctuations in the commodity prices
of feed ingredients, chicken and turkey; additional outbreaks of avian influenza
or other diseases, either in the Company's flocks or elsewhere, affecting
the
Company's ability to conduct its operations and/or demand for the Company's
poultry products; contamination of the Company's products, which has recently
and can in the future lead to product liability claims and product recalls;
exposure to risks related to product liability, product recalls, property
damage
and injuries to persons, for which insurance coverage is expensive, limited
and
potentially inadequate; changes in laws or regulations affecting the Company's
operations or the application thereof; competitive factors and pricing pressures
or the loss of one or more of the Company's largest customers; currency exchange
rate fluctuations, trade barriers, exchange controls, expropriation and other
risks associated with foreign operations; management of the Company's cash
resources, particularly in light of the Company's leverage, and restrictions
imposed by and as a result of, the Company's leverage; and the impact of
uncertainties of litigation as well as other risks described under "Risk
Factors" in the Company's Annual Report on Form 10-K and subsequent filings
with
the Securities and Exchange Commission. The Company undertakes no obligation
to
update or revise publicly any forward-looking statements, whether as a result
of
new information, future events or otherwise.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
|
10.1
|
Amended
and Restated Pilgrim's Pride Corporation 2005 Deferred Compensation
Plan
|
|
10.2
|
Vendor
Service Agreement
|
|
10.3
|
Transportation
Agreement
|
|
10.4
|
Ground
Lease Agreement
|
|
99.1
|
Press
Release dated January 3, 2006
|
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 hereunto
duly authorized.
PILGRIM'S
PRIDE
CORPORATION
Date:
January 6, 2006 By:
/s/
Richard A. Cogdill
Richard
A. Cogdill
Executive
Vice President, Chief
Financial Officer,
Secretary and Treasurer
Exhibit
Index
Exhibit
Number Description
|
10.1
|
Amended
and Restated Pilgrim's Pride Corporation 2005 Deferred Compensation
Plan
|
|
10.2
|
Vendor
Service Agreement
|
|
10.3
|
Transportation
Agreement
|
|
10.4
|
Ground
Lease Agreement
|
|
99.1
|
Press
Release dated January 3,
2006
|
EXHIBIT
10.1
PILGRIM’S
PRIDE CORPORATION
2005
DEFERRED COMPENSATION PLAN
AMENDED
AND RESTATED
TABLE
OF CONTENTS
Page
ARTICLE
I
TITLE AND
DEFINITIONS &#
160;
1
|
1.1
|
Definitions.
|
1 |
ARTICLE
II PARTICIPATION
|
2.1
|
Enrollment. &
#160;
|
7 |
|
2.2
|
Participation.
0;
|
7 |
ARTICLE
III DEFERRAL AND INVESTMENT ELECTIONS 8
|
3.1
|
Elections
to Defer
Compensation.
|
8 |
|
3.2
|
Investment
Elections.
|
9 |
ARTICLE
IV DEFERRAL ACCOUNTS AND TRUST
FUNDING
10
|
4.1
|
Deferral
Accounts.
|
10 |
|
4.2
|
Company
Contribution
Account.
|
10 |
|
4.3
|
Prior
Plan
Account.
|
11 |
|
4.4
|
Trust
Funding.
|
11 |
|
ARTICLE
V VESTING
|
; 13 |
ARTICLE
VI
DISTRIBUTIONS
14
|
6.1
|
Distribution
of Deferred Compensation and Company
Contributions.
|
14 |
|
6.2
|
Hardship
Distribution.
|
16 |
|
6.3
|
Taxes.
|
17 |
|
6.4
|
Inability
to Locate
Participant.
|
17 |
|
6.5
|
Distributions
from Prior Plan
Account.
|
17 |
ARTICLE
VII
ADMINISTRATION
; 18
|
7.1
|
The
Committees.
|
18 |
|
7.2
|
Committee
Action.
|
18 |
|
7.3
|
Powers
and Duties of the Administrative
Committee.
|
18 |
|
7.4
|
Powers
and Duties of the Oversight
Committee.
|
19 |
|
7.5
|
Construction
and
Interpretation.
|
19 |
|
7.6
|
Information.
|
19 |
|
7.7
|
Compensation,
Expenses and
Indemnity.
|
19 |
|
7.8
|
Annual
Statements.
|
20 |
|
7.9
|
Disputes.
|
20 |
ARTICLE
VIII MISCELLANEOUS &
#160;
22
|
8.1
|
Unsecured
General
Creditor.
|
22 |
|
8.2
|
Restriction
Against
Assignment.
|
22 |
|
8.3
|
Withholding.
|
22 |
|
8.4
|
Amendment,
Modification, Suspension or
Termination.
|
22 |
|
8.5
|
Governing
Law.
|
23 |
|
8.6
|
Receipt
or
Release.
|
23 |
|
8.7
|
Payments
on Behalf of Persons Under
Incapacity.
|
23 |
|
8.8
|
Limitation
of Rights and Employment
Relationship
|
23 |
|
8.9
|
Severability.
|
23 |
|
8.10
|
Gender.
|
23 |
|
8.11
|
No
Enlargement of Employee
Rights.
|
24 |
|
8.12
|
Addresses.
|
24 |
|
8.13
|
Interpretation.
|
24 |
|
8.14
|
No
Implied Rights or
Obligations.
|
24 |
|
8.15
|
Participants
Outside of the United
States.
|
24 |
|
SCHEDULE
A…...
|
; 25 |
|
SCHEDULE
B…..
|
26 |
PILGRIM’S
PRIDE CORPORATION
2005
DEFERRED COMPENSATION PLAN
AMENDED
AND RESTATED
EFFECTIVE
AS OF JANUARY 1, 2006
Pilgrim’s
Pride Corporation, a Delaware corporation (the “Company”) has set forth its
desire to establish this Deferred Compensation Plan (the “Plan”) as an unfunded
plan for the purpose of providing deferred compensation for a select group
of
management or highly compensated employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The
Company has decided to amend the Plan to reflect additional guidance under
the
Section 409A of the Internal Revenue Code, including, but not limited to,
clarifying the making of deferral elections, the effect of revising deferral
elections and permitting termination distributions prior to Retirement. These
changes are generally effective retroactive to the original Effective Date
of
the Plan.
As
of
January 1, 2006, this amended and restated Plan is hereby adopted to read as
follows:
ARTICLE
I
TITLE
AND DEFINITIONS
| 1.1 |
Definitions.
|
Whenever
the following words and phrases are used in this Plan, with the first letter
capitalized, they shall have the meanings specified below.
(a) "Account"
or "Accounts" shall mean the Deferral Account and the Company Contribution
Account and any Prior Plan Account.
(b) “Administrative
Committee” shall mean the Administrative Committee appointed by the Board to
administer the Plan in accordance with Article VII.
(c)
"Base Salary" shall mean a Participant's annual base salary, excluding bonus,
commissions, incentive and all other remuneration for services rendered to
Company and a Participating Company and prior to reduction for any salary
contributions to a plan established pursuant to Section 125 of the Code, Section
132(f) of the Code or qualified pursuant to Section 401(k) of the
Code.
(d) "Beneficiary"
or "Beneficiaries" shall mean the person or persons, including a trustee,
personal representative or other fiduciary, last designated in writing by a
Participant in accordance with procedures established by the Administrative
Committee to receive the benefits specified hereunder in the event of the
Participant's death. No beneficiary designation shall become effective until
it
is filed with the Administrative Committee. Any
1
designation
shall be revocable at any time through a written instrument filed by the
Participant with the Administrative Committee with or without the consent
of the
previous Beneficiary. No designation of a Beneficiary other than the
Participant's spouse shall be valid unless consented to in writing by such
spouse. If there is no such designation or if there is no surviving designated
Beneficiary, then the Participant's surviving spouse shall be the Beneficiary.
If there is no surviving spouse to receive any benefits payable in accordance
with the preceding sentence, the duly appointed and currently acting personal
representative of the Participant's estate (which shall include either the
Participant's probate estate or living trust) shall be the Beneficiary. In
any
case where there is no such personal representative of the Participant's
estate
duly appointed and acting in that capacity within 90 days after the
Participant's death (or such extended period as the Administrative Committee
determines is reasonably necessary to allow such personal representative
to be
appointed, but not to exceed 180 days after the Participant's death), then
Beneficiary shall mean the person or persons who can verify by affidavit
or
court order to the satisfaction of the Administrative Committee that they
are
legally entitled to receive the benefits specified hereunder. In the event
any
amount is payable under the Plan to a minor, payment shall not be made to
the
minor, but instead be paid (i) to that person's living parent(s) to act as
custodian, (ii) if that person's parents are then divorced, and one parent
is
the sole custodial parent, to such custodial parent, or (iii) if no parent
of
that person is then living, to a custodian selected by the Administrative
Committee to hold the funds for the minor under the Uniform Transfers or
Gifts
to Minors Act in effect in the jurisdiction in which the minor resides. If
no
parent is living and the Administrative Committee decides not to select another
custodian to hold the funds for the minor, then payment shall be made to
the
duly appointed and currently acting guardian of the estate for the minor
or, if
no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be
deposited with the court having jurisdiction over the estate of the minor.
Payment by the Company or a Participating Company pursuant to any unrevoked
Beneficiary designation, or to the Participant's estate if no such designation
exists, of all benefits owed hereunder shall terminate any and all liability
of
the Company and the Participating Company, as applicable.
(e) "Board
of
Directors" or "Board" shall mean the Board of Directors of the
Company.
(f) "Bonuses"
shall mean the bonuses determined as of the last day of the fiscal year of
the
Company, and payable only to an Eligible Employee employed by of the Company
or
a Participating Company on the first day of the next following Plan
Year.
(g) "Code"
shall mean the Internal Revenue Code of 1986, as amended.
(h) "Committee"
shall mean the Administrative Committee and the Oversight Committee appointed
by
the Board to oversee and administer the Plan in accordance with Article
VII.
(i) "Company"
shall mean Pilgrim’s Pride Corporation, a Delaware corporation, or any successor
thereof, if its successor shall adopt this Plan.
2
(j) "Company
Contribution Account" shall mean the bookkeeping account maintained by the
Company or any Participating Company for each Participant that is credited
with
an amount equal to the Company Contribution Amount, if any, and earnings
and
losses on such amounts pursuant to Section 4.2.
(k) "Company
Contribution Amount" shall mean the amount of the Company’s or a Participating
Company’s matching contribution, if any, for a Participant under the Pilgrim’s
Pride Retirement Savings Plan that is required to be reduced for a Plan Year
pursuant to the operation of Code Section 401(m) and any other nonelective
contributions allocable to a Participant that are made by the Company or
a
Participating Company.
(l) "Compensation"
shall include a Participant’s Base Salary plus Bonuses paid in a Plan
Year.
(m) "Deferral
Account" shall mean the bookkeeping account maintained by the Administrative
Committee for each Participant that is credited with amounts equal to (i)
the
portion of the Participant's Compensation that he or she elects to defer
pursuant to Section 3.1, (ii) the amount of any Participant deferrals under
the
Pilgrim’s Pride Retirement Savings Plan that is required to be reduced for a
Plan Year pursuant to the operation of Code Section 401(k) and that may be
deferred under this Plan in accordance with Code Section 409A, and (iii)
earnings and losses pursuant to Section 4.1.
(n) "Disability"
shall mean a Participant has, by reason of any medically determinable physical
or mental impairment which can be expected to last for a continuous period
of
not less than twelve (12) months, received at least three months of salary
continuation benefits under the Company’s or the Participating Company’s
long-term disability plan. This definition shall be interpreted consistent
with
Code Section 409A(a)(2)(C).
(o) "Distributable
Amount" shall mean the vested balance in the Participant's Deferral Account
and
Company Contribution Account.
(p) "Early
Distribution" shall mean an election by Participant in accordance with Section
6.2 to receive a withdrawal of amounts from his or her Deferral Account and
Company Contribution Account prior to the time at which such Participant
would
otherwise be entitled to such amounts.
(q) "Effective
Date" shall mean January 1, 2005 and covers amounts subject to deferral
elections in 2004 and thereafter which would otherwise have been payable
on or
after January 1, 2005.
(r) "Eligible Employee" shall mean any Employee
whose Compensation for a Plan Year is expected during the Initial Election
Period (and each subsequent election period) to be equal to or greater than
the
dollar amount used to determine if an employee is highly compensated within
the
meaning of Code Section 414q(1)(B)(i), as adjusted. In addition, an “Eligible
Employee” shall mean a former employee of a Participating Company for whom a
Prior Plan Account is established. An employee whose Initial Election Period
occurs after the first day of a Plan Year shall be an Eligible Employee if
his
or her Compensation for the remainder of the Plan Year is reasonably expected
to
equal or exceed such dollar amount if
3
Compensation
is annualized. If, however, the actual Compensation of a Participant
is less
than such amount for a Plan Year, then such Participant shall not be
an Eligible
Employee for the next following Plan Year. In addition, the following
Employees
shall not be Eligible Employees:
(i) Any
Employee who is a nonresident alien and who receives no earned income
(within
the meaning of Code Section 911(d)(2)) from the Company or any
Participating Company which constitutes income from sources within the
United
States (within the meaning of Code Section 861(a)(3)), unless the Employee
is within a group or classification of nonresident alien Employees designated
as
eligible to participate in the Plan by the Board of Directors;
(ii) Any
Employee who is employed on a temporary basis, is a leased employee,
or an
independent contractor; and
(iii) Any
person who is not classified by the Company or any Participating Company
on its
payroll records as an Employee under Code Section 3121(d) (including, but
not limited to, a person classified by the Company or any Participating
Company
as an independent contractor, a non-employee consultant or as an employee
of any
other entity), even if such classification is determined to be erroneous,
or is
retroactively revised by a governmental agency, by court order or as
a result of
litigation, or otherwise. In the event the classification of a person
who was
excluded from the definition of Eligible Employee under the preceding
sentence
is determined to be erroneous or is retroactively revised, the person
shall
nonetheless continue to be excluded from treatment as an Eligible Employee
for
all periods prior to the date the Company or any Participating Company
specifically determines for purposes of eligibility to participate in
the Plan
that the classification of the person was erroneous or should be
revised.
(s) “Employee”
shall mean each person currently employed as a regular employee of the
Company
or any Participating Company and solely for the purpose of maintaining
a Prior
Plan Account, any person formerly employed by a Participating
Company.
(t) "Fund"
or
"Funds" shall mean one or more of the investment funds selected by the
Oversight
Committee pursuant to Section 3.2(b).
(u) "Hardship
Distribution" shall mean a severe financial hardship to the Participant
resulting from an illness or accident of the Participant or of his or
her spouse
or dependent (as defined in Code Section 152(a)), loss of a Participant's
property due to casualty, or other similar or extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The circumstances that would constitute an unforeseeable
emergency
will depend upon the facts of each case, but, in any case, a Hardship
Distribution may not be made to the extent that such hardship is or may
be
relieved (i) through reimbursement or compensation by insurance or otherwise,
or
(ii) by liquidation of the Participant's assets, to the extent the liquidation
of assets would not itself cause severe financial hardship.
(v) "Initial
Election Period" shall mean the 30-day period prior to the Effective
Date of the
Plan, or the 30-day period following the time an Employee shall be designated
by
the Company or a Participating Company as an Eligible Employee.
4
(w) "Interest
Rate" shall mean, for each Fund, an amount equal to the net gain
or loss on the
assets of such Fund during each business day.
(x) “Key
Employee” means a “key employee” as defined in Code Section 416(i) without
regard to paragraph 5 thereof.
(y) “Oversight
Committee” shall mean the Oversight Committee appointed by the Board to oversee
the Plan in accordance with Article VII.
(z) "Participant"
shall mean any Eligible Employee who becomes a Participant in this
Plan in
accordance with Article II.
(aa) “Participating
Company” shall include any corporation that is included in a controlled group
of
corporations within the meaning of Code Section 414(b) that includes the
Company, and any trade or business that is under common control with
the Company
within the meaning of Code Section 414(c) but only if the Board of
Directors of the Company permits such entity to participate in the
Plan and the
board of the Participating Company adopts this Plan. Participating
Companies and
the dates as of which they adopt the Plan shall be identified on
Schedule A,
attached hereto.
(bb) "Payment
Date" shall mean the date as soon as practicable following such Participant's
Termination in the case of distributions without a Scheduled Withdrawal
Date,
but no later than the end of the calendar year in which the Participant’s
Termination occurred or, if later, the 15th day of the third calendar
month
following the Participant’s Termination. In the case of a Scheduled Withdrawal
Date, the Payment Date shall be the date as elected by the Participant
in
accordance with Section 6.1 of the Plan.
(cc) "Plan"
shall mean the Pilgrim’s Pride Corporation 2005 Deferred Compensation Plan as
amended from time to time.
(dd) "Plan
Year" shall mean the Plan Year beginning January 1, 2005 and ending
December 31,
2005. Each subsequent Plan Year shall begin on January 1 and end
on December
31.
(ee) “Prior
Plan Account” shall mean the bookkeeping account maintained by the
Administrative Committee for each Participant that is credited with
amounts
equal to ( i) the accrued liability for benefits under any nonqualified
plan of
a Participating Company that is merged with or transferred to this
Plan with the
permission of the Board of Directors of the Company, and (ii) earnings
and
losses pursuant to Section 4.3.
(ff) “Retirement”
shall mean the termination of employment with the Company or a Participating
Company, as applicable, for any reason, other than death or Disability,
on or
after the Participant’s 55th
birthday, provided, however, that, to the extent Retirement is treated
as a
separation from service under Code Section 409A(a)(2)(A), in the
case of a Key
Employee, Retirement for purposes of the Plan shall not be earlier
than six (6)
months following the Participant’s separation from service as determined
pursuant to Treasury Regulations issued under Code Section
409A(a)(2)(A).
5
(gg) "Scheduled
Withdrawal Date" shall mean the distribution date elected by
the Participant for
an in-service withdrawal of amounts from such Accounts deferred
in a given Plan
Year, and earnings and losses attributable thereto, as set forth
on the election
form for such Plan Year.
(hh) “Termination”
means the date of a Participant’s separation from service including Retirement,
with the Company and any Participating Company, provided that,
in the case of a
Key Employee, Termination other than as a result of death or
Disability shall be
deemed to be the date six (6) months following separation from
service as
determined pursuant to Treasury Regulations issued under Code
Section
409A(a)(2)(A).
(ii) "Trust"
shall mean the Pilgrim’s Pride Corporation Deferred Compensation Plan
Trust.
(jj) "Trustee"
shall mean Wells Fargo Bank (Texas) N.A.
(kk) “Years
of
Service” shall mean a “year of service” as such term is defined in the Pilgrim’s
Pride Retirement Savings Plan as in effect January 1, 2005, as
amended from time
to time.
6
ARTICLE
I
PARTICIPATION
| 1.1 |
Enrollment.
|
An
Eligible Employee shall become a Participant in the Plan by completing the
requirements as set forth below:
(a) electing
to defer a portion of his or her Compensation in accordance with
Section 3.1;
(b) completing
an investment preference form as set forth in Section 3.2;
(c) filing
a
life insurance application form along with his or her deferral election form
or
investment preference form; and
(d) complying
with such medical underwriting requirements as determined by the life insurance
carrier selected by the Company.
| 2.2 |
Participation.
|
An
Eligible Employee who completes the requirements of the preceding
Section 2.1 shall commence participation in this Plan as of the first day
of the month in which Compensation is deferred, a Company Contribution Amount
is
credited or a Prior Plan Account is established, whichever occurs first.
In the
event it is determined by the Committee that a proposed life insurance policy
for a Participant cannot be obtained in a cost efficient manner after medical
underwriting requirements have been met, no policy will be obtained.
Notwithstanding any provision to the contrary, if it is determined or reasonably
believed, based on a judicial or administrative determination or an opinion
of
Company's legal counsel that a Plan Participant is not an Eligible Employee
following his or her initial enrollment, such individual shall cease to be
a
Participant and, to the extent permitted by Code Section 409A, his or her
Distributable Amount shall be paid to him or her in a lump sum as soon as
practicable after the determination is made that he or she is not an Eligible
Employee.
7
ARTICLE
I
DEFERRAL
AND INVESTMENT ELECTIONS
| 3.1 |
Elections
to Defer Compensation.
|
(a) Initial
Election Period.
Subject
to the provisions of Article II, each Eligible Employee may elect to defer
a
portion of his or her Compensation by filing with the Administrative Committee
an election that conforms to the requirements of this Section 3.1, on a form
provided by the Administrative Committee, no later than the last day of his
or
her Initial Election Period.
(b) General
Rule.
The
amount of Compensation which an Eligible Employee may elect to defer is limited
to such Compensation earned on or after the time at which the Eligible Employee
elects to defer in accordance with Section 3.1(a) and shall be a flat dollar
amount or percentage which shall not exceed 100% of the Eligible Employee's
Compensation, provided that the total amount deferred by a Participant shall
be
limited in any calendar year, if necessary, to satisfy the Participant’s Social
Security Tax obligation (including Medicare) on the amount of Compensation
prior
to any deferral election under this Plan, income tax and employee benefit plan
withholding requirements as determined in the sole and absolute discretion
of
the Administrative Committee.
(c) Duration
of Compensation Deferral Election.
An
Eligible Employee's initial election to defer Compensation must be made prior
to
the Effective Date and is to be effective with respect to Compensation received
after such deferral election is processed but only through the last day of
the
Plan Year. Thereafter, a Participant may commence, renew, increase, decrease
or
terminate a deferral election with respect to Compensation for any subsequent
Plan Year by filing a new election not less than 15 days prior to the beginning
of the next Plan Year or such earlier date as determined by the Administrative
Committee, which election shall be effective on the first day of the next
following Plan Year. In the case of an Employee who becomes an Eligible Employee
after the Effective Date, such Eligible Employee shall have 30 days from
the date he or she first becomes an Eligible Employee to make an Initial
Election with respect to Compensation. Such election shall be effective for
the
remainder of the Plan Year, in the event the Plan Year has
commenced.
(d) Elections
other than Elections during the Initial Election Period.
Subject
to the limitations of Section 3.1(b) above, any Eligible Employee who failed
to
file an initial election or whose prior Compensation deferral election has
expired may elect to again defer Compensation, by filing an election on a form
provided by the Administrative Committee to defer Compensation as described
in
Sections 3.1(b) and 3.1(c) above. An election to defer Compensation must be
filed in a timely manner in accordance with Section 3.1(c).
(e)
Rescission
or Modification of Deferral Election.
As
permitted under Code Section 409A and the relevant transition rules in Section
885(f) of the American Jobs Creation Act of 2004 and Treasury Regulations issued
thereunder a Participant may (i) rescind his or her deferral election by filing
a rescission election in accordance with the policies and procedures established
by the Administrative Committee or (ii) modify his deferral election by filing
a
8
(f) Ineligibility.
A
Participant whose actual Compensation is below the threshold for a Plan Year
shall cease to be an Eligible Employee for the next following Plan Year, and
any
election to defer Compensation for such Plan Year shall be null and void unless,
in the Administrative Committee’s sole and exclusive determination, the
Participant is likely to be an Eligible Employee in such succeeding Plan
Year.
(g) Irrevocable
Election.
Except
as permitted under paragraph (e) above, once made Compensation deferral
elections shall remain in force for the applicable Plan Year unless the
Participant ceases to be an Eligible Employee, in which case contributions
made
while an Eligible Employee shall remain in the Plan until distribution as
elected in accordance with Article VI.
| 3.2 |
Investment
Elections.
|
(a) At
the
time of making the deferral elections described in Section 3.1, and effective
with the establishment of a Prior Plan Account for a Participant, the
Participant shall select, on a form provided by the Oversight Committee, from
among the types of Funds selected by the Oversight Committee in which the
Participant's Account will be deemed to be invested in for purposes of
determining the amount of earnings or losses to be credited to that Account.
In
making the selection pursuant to this Section 3.2, the Participant may specify
that all or any multiple of his or her Account be deemed to be invested, in
whole percentage increments, in one or more of the Funds provided under the
Plan
as communicated from time to time by the Oversight Committee. A Participant
may
change the selection made under this Section 3.2 by following such procedures
and formats as the Administrative Committee shall authorize. If a Participant
fails to elect a type of Fund under this Section 3.2, he or she shall be deemed
to have elected the money market type of Fund.
(b) Although
the Participant may designate the type of investments, the Committee shall
not
be bound by such designation. The Oversight Committee shall select from time
to
time, in its sole and absolute discretion, commercially available investments
of
each of the types communicated by the Oversight Committee to the Participant
pursuant to Section 3.2(a) above, which shall to be the Funds. The Interest
Rate
of each such commercially available investment Fund shall be used to determine
the amount of earnings or losses to be credited to Participant's Account under
Article IV.
9
ARTICLE
I
DEFERRAL
ACCOUNTS AND TRUST FUNDING
| 4.1 |
Deferral
Accounts.
|
The
Administrative Committee shall establish and maintain a Deferral Account for
each Participant under the Plan. Each Participant's Deferral Account shall
be
further divided into separate subaccounts ("Fund subaccounts"), each of which
corresponds to a Fund elected by the Participant pursuant to Section 3.2(a).
A
Participant's Deferral Account shall be credited as follows:
(a) On
the
fifth business day after amounts are withheld and deferred from a Participant's
Compensation, the Administrative Committee shall credit the Fund subaccounts
of
the Participant's Deferral Account with an amount equal to Compensation deferred
by the Participant in accordance with the Participant's election under Section
3.2(a); that is, the portion of the Participant's deferred Compensation that
the
Participant has elected to be deemed to be invested in a certain type of Fund
shall be credited to the Fund subaccount corresponding to that
Fund;
(b) Each
business day, each Fund subaccount of a Participant's Deferral Account shall
be
credited with earnings or losses in an amount equal to that determined by
multiplying the balance credited to such Fund subaccount as of the prior day
plus contributions credited that day to the Fund subaccount by the Interest
Rate
for the corresponding fund selected by the Oversight Committee pursuant to
Section 3.2(b).
(c) In
the
event that a Participant elects for a given Plan Year’s deferral of Compensation
to have a Scheduled Withdrawal Date, all amounts attributed to the deferral
of
Compensation for such Plan Year shall be accounted for in a manner which allows
separate accounting for the deferral of Compensation and investment gains and
losses associated with such Plan Year’s deferral of Compensation.
| 4.2 |
Company
Contribution Account.
|
The
Administrative Committee shall establish and maintain a Company Contribution
Account for each Participant under the Plan. Each Participant's Company
Contribution Account shall be further divided into separate Fund subaccounts
corresponding to the Fund selected by the Participant pursuant to Section
3.2(a). A Participant's Company Contribution Account shall be credited as
follows:
(a) On
the
fifth business day after a Company Contribution Amount is made, the
Administrative Committee shall credit the Fund subaccounts of the Participant's
Company Contribution Account with an amount equal to the Company Contribution
Amount, if any, which the Participant selected to be deemed to be invested
in a
certain type of Fund shall be credited to the corresponding investment Fund
subaccount; and
(b)
Each business day, each Fund subaccount of a Participant's Company Contribution
Account shall be credited with earnings or losses in an amount equal to that
10
determined
by multiplying the balance credited to such Fund subaccount as of the prior
day
plus contributions credited that day to the Fund subaccount by the Interest
Rate
for the corresponding Fund selected by the Oversight Committee pursuant to
Section 3.2(b).
| 4.3 |
Prior
Plan Account.
|
The
Administrative Committee shall establish and maintain a Prior Plan Account
for
each Participant under the Plan whose benefit under this Plan includes amounts
accrued under the prior nonqualified deferred compensation plan of a
Participating Company, to the extent permitted by the Board. Each Participant's
Prior Plan Account shall be further divided into Fund subaccounts, each of
which
corresponds to a Fund elected by the Participant pursuant to Section 3.2(a).
A
Participant's Prior Plan Account shall be credited as follows:
(a) On
the
fifth business day after accrued benefits are assumed by this Plan, the
Administrative Committee shall credit the Fund subaccounts of the affected
Participant's Prior Plan Account with an amount equal to such accrued benefits
in accordance with the Participant's election under Section 3.2(a); that is,
the
portion of the Participant's prior plan accrued benefit that the Participant
has
elected to be deemed to be invested in a certain type of Fund shall be credited
to the Fund subaccount corresponding to that Fund;
(b) Each
business day, each Fund subaccount of a Participant's Prior Plan Account shall
be credited with earnings or losses in an amount equal to that determined by
multiplying the balance credited to such Fund subaccount as of the prior day
to
the Fund subaccount by the Interest Rate for the corresponding fund selected
by
the Oversight Committee pursuant to Section 3.2(b).
| 4.4 |
Trust
Funding.
|
(a) The
Company has created a Trust with the Trustee. The Company shall cause the Trust
to be funded each year. The Company and any Participating Company shall
contribute to the Trust the sum of: (i) an amount equal to the amount
deferred by each Participant; and (ii) the aggregate amount of Company
Contribution Amounts for the Plan Year. The Participating Company shall
contribute to the Trust an amount equal to the amount accrued by each
Participant under any nonqualified deferred compensation plan of the
Participating Company that is merged with or transferred to this
Plan.
(b) Although
the principal of the Trust and any earnings thereon shall be held separate
and
apart from other funds of Company and any Participating Company and shall be
used exclusively for the uses and purposes of Plan Participants and
Beneficiaries as set forth therein, neither the Participants nor their
Beneficiaries shall have any preferred claim on, or any beneficial ownership
in,
any assets of the Trust prior to the time such assets are paid to the
Participants or their Beneficiaries. Benefits and all rights created under
this
Plan shall be unsecured contractual rights of Plan Participants and
Beneficiaries against the Company and any Participating Company. Any assets
held
in the Trust will be subject to the claims of Company's and any Participating
Company’s general creditors under federal and state law in the event its or
their becoming “insolvent” as defined in Section 4(a) of the Trust or any
successor section.
11
(a) The
assets of the Plan and Trust shall never inure to the benefit of the Company
or
any Participating Company and the same shall be held for the exclusive purpose
of providing benefits to Participants and their Beneficiaries and for deferring
reasonable expenses of administering the Plan and Trust.
12
ARTICLE I
VESTING
A
Participant shall be 100% vested in his or her Deferral Account and Prior Plan
Account. A Participant shall be vested in his or her Company Contribution Amount
as follows.
|
Years
of Service
|
Percentage
|
|
Less
than 2
|
0%
|
|
2
|
20%
|
|
3
|
40%
|
|
4
|
60%
|
|
5
|
80%
|
|
6
or more
|
100%
|
13
ARTICLE
VI
DISTRIBUTIONS
| 6.1 |
Distribution
of Deferred Compensation and Company Contributions.
|
(a) Distribution
Election.
During
each annual enrollment, under rules and on the distribution form prescribed
by
the Administrative Committee, a Participant may elect the timing and form of
distribution with respect to the “Plan Year Balance” credited to his or her
Account. For purposes of a distribution election, a Participant’s Plan Year
Balance shall mean any deferrals of Compensation, vested Company Contributions
made during a Plan Year, and any earnings on such deferrals of Compensation
and
Company Contribution Amounts. On the distribution form a Participant may elect
to receive his Plan Year Balance on a Scheduled Withdrawal Date. With respect
to
that portion of Participant’s Account for which a Scheduled Withdrawal Date is
not selected then such vested amounts shall become payable on the Payment Date
after the first to occur of the Participant’s (i) Termination or (ii)
death.
(b) Form
of Distribution.
(1) If
on a
Payment Date a Participant’s vested Account balance is $50,000 or less, then
notwithstanding any election to the contrary the amount to be distributed shall
be paid to the Participant (and after his or her death to his or her
Beneficiary) in a lump sum distribution.
(2) In
the
case of a Participant with a vested Account balance of more than $50,000 on
a
Payment Date then the Plan Year Balance(s), as applicable to such Payment Date,
shall be paid to the Participant (and after his or her death his or her
Beneficiary) in the form selected by the Participant in accordance with the
options set forth below:
(i) Termination.
(A) A
lump
sum distribution beginning on the Participant’s Payment Date.
(B) Substantially
equal quarterly installment beginning on the Participant’s Payment Date over a
period of five, ten, fifteen, or twenty years.
(C) If
no
election regarding the form of distribution has been made with respect to a
Plan
Year Balance, the payment of which will occur at Termination, then the amount
to
be distributed shall be paid to the Participant (and after his or her death
to
his or her Beneficiary) in quarterly installments over a period of ten
years.
(ii) Scheduled
Withdrawal Date.
(A) A
lump
sum distribution beginning on the Scheduled Withdrawal Date.
14
&#
160;
(B) Substantially
equal quarterly installments beginning on the Scheduled Withdrawal Date over
a
period of one, two, three, four, or five years.
(C) If
no
election regarding the form of distribution has been made with respect to a
Plan
Year Balance, the payment of which will occur on a Scheduled Withdrawal Date,
then the amount to be distributed shall be paid to the Participant (and after
his or her death to his or her Beneficiary) in quarterly installments beginning
on the Scheduled Withdrawal Date over a period of five years.
(c) Scheduled
Withdrawal Dates.
A
Participant who has elected a Scheduled Withdrawal Date for a distribution
while
still in the employ of the Company and any Participating Company shall receive
a
distribution from his or her Account on such date, but only if he meets the
requirements of 6.1(b)(2) above and only with respect to each Plan Year Balance
as shall have been selected by the Participant to be subject to such Scheduled
Withdrawal Date in accordance with Section 1.1(gg) of the Plan. A Participant's
Scheduled Withdrawal Date with respect to a Plan Year Balance can be no earlier
than two years from the first day of the Plan Year for which the deferrals
of
Compensation and Company Contribution Amounts are made; provided, however,
that
with respect to the Plan Year that includes the Effective Date, the Scheduled
Withdrawal Date can be no earlier than 18 months from the Effective Date of
the
Plan. A Scheduled Withdrawal Date shall be a date certain, rather than an event,
in accordance with Code Section 409A. In the event a Participant terminates
employment with the Company and any Participating Company prior to the
occurrence of a Scheduled Withdrawal Date (other than by reason of death),
the
portion of the Participant's Account associated with a Scheduled Withdrawal
Date
which has not been paid in full prior to such Termination, shall be distributed
in accordance with the payment method selected by or applicable to the
Participant in connection with his or her Termination.
(d) Modification.
A
Participant may elect to modify the form of benefit or extend the time of
distribution with respect to a specific Plan Year Balance provided that such
modification or extension is (x) made on a form provided by the Administrative
Committee, (y) filed with the Administrative Committee at least twelve (12)
months prior to his or her original Payment Date or Scheduled Withdrawal Date,
and (z) any change to a distribution election relating to a distribution (other
than for death or Disability) shall be effective only to the extent the first
payment pursuant to the changed election is deferred for a period of at least
five (5) years from the date payment would have otherwise been made. In
addition, any change to a Participant’s form of benefit or time of distribution
shall not become effective for a period of twelve (12) months from the date
the
form requesting such modification is received by the Administrative Committee.
A
Participant shall have the right to modify his or her elections up to two times
with respect to a specific Plan Year Balance.
(e) Distribution
for Termination of Employment due to Death.
In the
case of a Participant who dies while employed by the Company or any
Participating Company, the Participant’s vested Account balance shall be paid to
the Participant’s Beneficiary in a lump sum unless the Participant has a valid
election to receive installments. In addition, a death benefit, payable as
a
lump sum, shall be paid to the Beneficiary in an amount that is equal to the
lesser of (i) $50,000 and (ii) 25% of the Participant’s vested Account balance
as of the date of death.
15
(f) Post-Termination
Death Benefit.
In the
event a Participant who has begun receiving quarterly installments dies after
his or her Termination and at the time of death still has a vested balance
in
his or her Account, the vested balance of such Account shall continue to be
paid
in quarterly installments in accordance with the election(s) previously made
by
the Participant.
(g) Earnings.
The
Participant’s Account shall continue to be credited with earnings pursuant to
Section 4.1 of the Plan until all vested amounts credited to his or her Account
under the Plan have been distributed.
(h) Delayed
Distribution.
A
Participant’s Payment Date may be delayed under the following
circumstances:
(1) if
the
Company’s income tax deduction under Code Section 162(m) would be limited or
eliminated; provided, however, that amount to be distributed will be paid at
the
earliest date the Company or any Participating Company reasonably anticipates
that the deduction will not be limited or eliminated or, if sooner, the calendar
year of the Participant’s Termination;
(2) for
a
period of six months after the Participant’s Termination (except for death or
Disability), if the Participant is a Key Employee. Key Employees shall be
determined by including employees of the Company and any Participating Company,
including nonresident alien employees;
(3) if
the
amount to be distributed from the Participant’s Account would violate a loan
covenant to which the Company or any Participating Company is a party, and
the
violation is expected to cause material harm to the Company or a Participating
Company provided, however, that the distribution will occur at the earliest
date
it is reasonable to expect that the payment will not cause material harm;
(4) if
the
amount to be distributed from the Participant’s Account is reasonably likely to
violate federal or applicable state securities laws; provided, however, that
the
distribution will occur at the earliest date the Company and any Participating
Company reasonably anticipate that the distribution will not cause a violation;
and
(5) if
the
amount to be distributed from the Participant’s Account is subject to a bona
fide dispute; provided, however, that the distribution occurs during the first
calendar year in which the Participant, the Company and any Participating
Company enter into legally binding settlement agreement or pursuant to a final
non-appealable judgment or other binding decision.
| 6.2 |
Hardship
Distribution.
|
A
Participant shall be permitted to elect a Hardship Distribution from his or
her
vested Accounts in accordance with Section 1.1(u) of the Plan prior to the
Payment Date, subject to the following restrictions:
16
(a) The
election to take a Hardship Distribution shall be made by filing a form provided
by and filed with the Administrative Committee prior to the end of any calendar
month.
(b) The
Administrative Committee shall have made a determination that the requested
distribution constitutes a Hardship Distribution in accordance with Section
1.1(u) of the Plan.
(c) The
amount determined by the Administrative Committee as a Hardship Distribution
(which may not exceed the amount necessary to satisfy such emergency plus the
amount necessary to pay taxes reasonably anticipated as a result of the
distribution) shall be paid in a single cash lump sum as soon as practicable
after the end of the calendar month in which the Hardship Distribution election
is made and approved by the Administrative Committee.
(d) If
a
Participant receives a Hardship Distribution, then to the extent permitted
under
Code Section 409A the Participant will be ineligible to participate in the
Plan
for the balance of the Plan Year in which the Hardship Distribution was paid
and
the following Plan Year.
6.3 Taxes.
All
distributions shall be reduced by an amount that the Administrative Committee
reasonably determines is necessary to be withheld and paid over to satisfy
federal, state, local and foreign tax authorities pursuant to Section
8.3.
| 6.4 |
Inability
to Locate Participant.
|
In
the
event that the Administrative Committee is unable to locate a Participant or
Beneficiary within two years following the required Payment Date, the entire
amount allocated to the Participant's Deferral Account, Company Contribution
Account and Prior Plan Account shall be forfeited. If, after such forfeiture,
the Participant or Beneficiary later claims such benefit, such benefit, to
the
extent vested, shall be reinstated without interest or earnings.
| 6.5 |
Distributions
from Prior Plan Account.
|
In
the
event that a Participant has a Prior Plan Account, then all distribution options
with respect to amounts credited to such Prior Plan Account shall be distributed
in accordance with this Article 6, except with respect to a Participant who
is not a current employee and is in pay status with respect to such Prior Plan
Account at the time such Account is initially credited with an accrued benefit
under the prior plan. In such case, the distribution mode in effect at the
time
the Prior Plan Account is credited under this Plan shall continue in accordance
with the provisions of said prior plan, as provided on
Schedule B.
17
ARTICLE VII
ADMINISTRATION
| 7.1 |
The
Committees.
|
Two
committees, the Administrative Committee and the Oversight Committee, shall
be
appointed by, and serve at the pleasure of, the Board of Directors. The number
of members comprising each Committee shall be determined by the Board, which
may
from time to time vary the number of members. Any member of a Committee may
resign by delivering a written notice of resignation to the Board. The Board
may
remove any member of a Committee by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of either
Committee shall be filled promptly by the Board.
| 7.2 |
Committee
Action.
|
A
Committee shall act at meetings by the affirmative vote of a majority of its
members. Any action permitted to be taken at a meeting may be taken without
a
meeting if, prior to such action, a written consent to the action is signed
by
all members of a Committee and such written consent is filed with the minutes
of
the proceedings of such Committee. A member of a Committee shall not vote or
act
upon any matter which relates solely to himself or herself as a Participant.
The
Chairman or any other member or members of a Committee designated by the
Chairman may execute any certificate or other written direction on behalf of
such Committee. Any member of a Committee may execute documents or provide
written directions on behalf of the entire Committee.
| 7.3 |
Powers
and Duties of the Administrative Committee.
|
The
Administrative Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be charged with
the
general administration of the Plan except with respect to the powers and duties
of the Oversight Committee as described in Section 7.4, and shall have all
powers necessary to accomplish its purposes, including, but not by way of
limitation, the following:
(a) To
construe and interpret the terms and provisions of this Plan;
(b) To
compute and certify to the amount and kind of benefits payable to Participants
and their Beneficiaries;
(c) To
maintain all records that may be necessary for the administration of the
Plan;
(d) To
provide for the disclosure of all information and the filing or provision of
all
reports and statements to Participants, Beneficiaries or governmental agencies
as shall be required by law;
(e) To
make
and publish such rules for the regulation of the Plan and procedures for the
administration of the Plan as are not inconsistent with the terms hereof;
and
18
(f) To
review
decisions made by the Company with respect to claims.
7.4 Powers
and Duties of the Oversight Committee.
The
Oversight Committee, on behalf of the Participants and their Beneficiaries,
shall be charged with the general administration of the Plan, except with
respect to the powers and duties of the Administrative Committee as described
in
Section 7.3, and shall have all powers necessary to accomplish its purposes,
including, but not by way of limitation, the following:
(a) To
select
the Funds in accordance with Section 3.2(b) hereof;
(b) To
appoint a Plan administrator or any other agent, and to delegate to them such
powers and duties in connection with the administration of the Plan as the
Oversight Committee may from time to time prescribe; and
(c) To
take
all actions necessary for the administration of the Plan, including determining
whether to hold or discontinue the Policies.
| 7.5 |
Construction
and Interpretation.
|
The
Administrative Committee shall have full and exclusive discretion to construe
and interpret the terms and provisions of this Plan, which interpretations
or
construction shall be final and binding on all parties, including but not
limited to the Company, the Oversight Committee and any Participant or
Beneficiary. The Administrative Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance
with
any and all laws applicable to the Plan.
| 7.6 |
Information.
|
To
enable
the Committees to perform their functions, the Company and each Participating
Company shall supply full and timely information to the Committees on all
matters relating to the Compensation of all Participants, their death or other
events which cause termination of their participation in this Plan, and such
other pertinent facts as a Committee may require.
| 7.7 |
Compensation,
Expenses and Indemnity.
|
(a) The
members of a Committee shall serve without compensation for their services
hereunder.
(b) Each
Committee is authorized at the expense of the Company and each Participating
Company to employ such legal counsel as it may deem advisable to assist in
the
performance of its duties hereunder. Expenses and fees in connection with the
administration of the Plan shall be paid equally by the Company and each
Participating Company, subject to an agreement between the Company and each
Participating Company to the contrary.
19
(c) To
the
extent permitted by applicable state law, the Company and each Participating
Company shall indemnify and hold harmless the Administrative and Oversight
Committees and each member thereof, the Board of Directors and any delegate
of a
Committee who is an employee of the Company and any Participating Company
against any and all expenses, liabilities and claims, including legal fees
to
defend against such liabilities and claims arising out of their discharge in
good faith of responsibilities under or incident to the Plan, other than
expenses and liabilities arising out of willful misconduct. This indemnity
shall
not preclude such further indemnities as may be available under insurance
purchased by the Company and any Participating Company, or provided by the
Company and any Participating Company under any bylaw, agreement or otherwise,
as such indemnities are permitted under state law. The liability under this
Section 7.7(c) shall be joint and several among the Company and any
Participating Companies.
| 7.8 |
Annual
Statements.
|
Under
procedures established by the Administrative Committee, a Participant shall
receive a statement with respect to such Participant's Accounts on an annual
basis. In addition, a Participant may obtain access to Account information
through telephonic and electronic means, including the Internet, as permitted
by
the Company.
| 7.9 |
Disputes.
|
(a) Claim.
A
person
who believes that he or she is being denied a benefit to which he or she is
entitled under this Plan (hereinafter referred to as "Claimant") must file
a
written request for such benefit with the Company, setting forth his or her
claim. The request must be addressed to the President of the Company at its
then
principal place of business.
(b) Claim
Decision.
Upon
receipt of a claim, the Company shall advise the Claimant that a reply will
be
forthcoming within thirty (30) days and shall, in fact, deliver such reply
within such period. The Company may, however, extend the reply period for an
additional thirty (30) days for special circumstances.
If
the
claim is denied in whole or in part, the Company shall inform the Claimant
in
writing, using language calculated to be understood by the Claimant, setting
forth: (i) the specified reason or reasons for such denial; (ii) the
specific reference to pertinent provisions of this Plan on which such denial
is
based; (iii) a description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation of
why
such material or such information is necessary; (iv) appropriate
information as to the steps to be taken if the Claimant wishes to submit the
claim for review; and (v) the time limits for requesting a review under
subsection (c).
20
(c) Request
For Review.
Within
sixty (60) days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Administrative
Committee review the determination of the Company. Such request must be
addressed to the Administrative Committee, c/o the Secretary of the Company,
at
its then principal place of business. The Claimant or his or her duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Administrative
Committee. If the Claimant does not request a review within such sixty (60)
day
period, he or she shall be barred and estopped from challenging the Company's
determination.
(d) Review
of Decision.
Within
thirty (30) days after the Administrative Committee's receipt of a request
for
review, after considering all materials presented by the Claimant, the
Administrative Committee will inform the Participant in writing, in a manner
calculated to be understood by the Claimant, of the decision setting forth
the
specific reasons for the decision containing specific references to the
pertinent provisions of this Plan on which the decision is based. If special
circumstances require that the thirty (30) day time period be extended, the
Administrative Committee will so notify the Claimant and will render the
decision as soon as possible, but no later than sixty (60) days after receipt
of
the request for review.
21
ARTICLE VIII
MISCELLANEOUS
| 8.1 |
Unsecured
General Creditor.
|
Participants
and their Beneficiaries, heirs, successors, and assigns shall have no legal
or
equitable rights, claims, or interest in any specific property or assets of
the
Company or any Participating Company. No assets of the Company or any
Participating Company shall be held in any way as collateral security for the
fulfilling of the obligations of the Company or any Participating Company under
this Plan. Any and all of the Company's and any Participating Company’s assets
shall be, and remain, the general unpledged, unrestricted assets of the Company
and any Participating Company. The Company's and any Participating Company’s
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Company or any Participating Company to pay money in the future,
and the rights of the Participants and Beneficiaries shall be no greater than
those of unsecured general creditors. It is the intention of the Company and
any
Participating Company that this Plan be unfunded for purposes of the Code and
for purposes of ERISA.
| 8.2 |
Restriction
Against Assignment.
|
The
Company and any Participating Company shall pay all amounts payable hereunder
only to the person or persons designated by the Plan and not to any other person
or corporation. No part of a Participant's Accounts shall be liable for the
debts, contracts, or engagements of any Participant, his or her Beneficiary,
or
successors in interest, nor shall a Participant's Accounts be subject to
execution by levy, attachment, or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
sell, transfer, commute, pledge, encumber, or assign any benefits or payments
hereunder in any manner whatsoever. If any Participant, Beneficiary or successor
in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or
payment from the Plan, voluntarily or involuntarily, the Administrative
Committee, in its discretion, may cancel such distribution or payment (or any
part thereof) to or for the benefit of such Participant, Beneficiary or
successor in interest in such manner as the Administrative Committee shall
direct.
| 8.3 |
Withholding.
|
There
shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all applicable federal,
state, local or foreign taxes which are required to be withheld by the Company
or any Participating Company in respect to such payment or this Plan. The
Company and any Participating Company shall have the right to reduce any payment
(or compensation) by the amount of cash sufficient to provide the amount of
said
taxes.
| 8.4 |
Amendment,
Modification, Suspension or Termination.
|
The
Board
may amend, modify, suspend or terminate the Plan in whole or in part, except
that no amendment, modification, suspension or termination shall have any
retroactive
22
| 8.5 |
Governing
Law.
|
This
Plan
shall be construed, governed and administered in accordance with the laws of
the
State of Texas to the extent not preempted by ERISA.
| 8.6 |
Receipt
or Release.
|
Any
payment to a Participant or the Participant's Beneficiary in accordance with
the
provisions of the Plan shall, to the extent thereof, be in full satisfaction
of
all claims against the Committees, the Company and each Participating Company.
The Administrative Committee may require such Participant or Beneficiary, as
a
condition precedent to such payment, to execute a receipt and release to such
effect.
| 8.7 |
Payments
on Behalf of Persons Under Incapacity.
|
In
the
event that any amount becomes payable under the Plan to a person who, in the
sole judgment of the Administrative Committee, is considered by reason of
physical or mental condition to be unable to give a valid receipt therefore,
the
Administrative Committee may direct that such payment be made to any person
found by the Administrative Committee, in its sole judgment, to have assumed
the
care of such person. Any payment made pursuant to such determination shall
constitute a full release and discharge of the Committees, the Company and
each
Participating Company.
| 8.8 |
Limitation
of Rights and Employment
Relationship
|
Neither
the establishment of the Plan and Trust nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be
construed as giving to any Participant, or Beneficiary or other person any
legal
or equitable right against the Company, a Participating Company or the Trustee
of the Trust except as provided in the Plan and Trust; and in no event shall
the
terms of employment of any Employee or Participant be modified or in any way
be
affected by the provisions of the Plan and Trust.
| 8.9 |
Severability.
|
If
any
provision of this Plan is held to be invalid or unenforceable, the remaining
provisions shall be effective.
| 8.10 |
Gender.
|
Unless
the context clearly indicates otherwise, the masculine gender shall include
the
feminine, the singular shall include the plural, and the plural the
singular.
23
| 8.11 |
No
Enlargement of Employee Rights.
|
(a) This
Plan
is strictly a voluntary undertaking on the part of the Company and a
Participating Company and shall not be deemed to constitute a contract between
the Company or any Participating Company and any Employee, or to be
consideration for, or an inducement to, or a condition of, the employment of
any
Employee.
(b) Nothing
contained in this Plan or the Trust shall be deemed to give any Employee the
right to be retained in the employ of the Company or any Participating Company
or to interfere with the right of the Company or any Participating Company
to
discharge or retire any Employee at any time.
(c) No
Employee, or any other person, shall have any right to or interest in any
portion of the Trust, and no Employee or any other person shall be entitled
to
rely upon any representations, whether oral or in writing, any prospectus or
other document, which are inconsistent with this Plan document.
| 8.12 |
Addresses.
|
Each
Participant or Eligible Employee shall be responsible for furnishing the
Administrative Committee with his or her correct current address and the correct
current name and address of his or her Beneficiary or
Beneficiaries.
| 8.13 |
Interpretation.
|
Article
and Section headings are for convenient reference only and shall not be deemed
to be part of the substance of this instrument or in any way to enlarge or
limit
the content of any Article or Section.
| 8.14 |
No
Implied Rights or Obligations.
|
The
Company, in establishing and maintaining this Plan as a voluntary and unilateral
undertaking, expressly disavows the creation of any rights in Employees,
Eligible Employees, Participants, or Beneficiaries or any obligations on the
part of the Company or a Participating Company, except as expressly provided
herein.
| 8.15 |
Participants
Outside of the United States.
|
The
Administrative Committee may adopt additional Plan rules in any jurisdiction
outside of the United States in which participation in the Plan may be subject
to additional or modified terms as may be required or advised to comply with
local securities, exchange control, or tax laws or regulations or similar
factors which may apply to the Participant, the Company or any Participating
Company with respect to the Plan, including but not limited, different rules
governing (i) the amount of Compensation that may be deferred under Article
III,
(ii) the ability of a Participant to rescind or modify a deferral or
distribution election, or (iii) the time and form in which a Participant may
elect to receive a distribution.
24
SCHEDULE
A
PARTICIPATING
COMPANIES
Name
of Company Date
of Participation
To-Ricos,
Inc. January
1, 2005
Pilgrim’s
Pride Corporation
January
1, 2005
of
West
Virginia, Inc.
PFS
Distribution
Company January
1, 2005
PPC
Transportation
Company January
1,
2005
Pilgrim’s
Pride
Affordable January
1, 2005
Housing
Corporation
PPC
Marketing
Ltd.
January
1, 2005
25
SCHEDULE
B
The
balance of this page is intentionally left
blank.
Exhibit
10.2
VENDOR
SERVICE
AGREEMENT
THIS
SERVICE AGREEMENT (“Agreement”)
is entered into effective this 28th
day of
Dec., 2005 (the “Effective Date”), by and between Pilgrim’s Pride Corporation, a
Delaware corporation with its headquarters at 4845 Hwy. 271 North, Pittsburg,
Texas 75686 (“Pilgrim’s Pride”) and Pat Pilgrim d/b/a Pat Pilgrim Farms (the
“Vendor”), whose address is 1535 Loop 179, Pittsburg, TX 75686, referred to in
this Agreement separately as a “Party” or collectively as the
“Parties”.
WITNESSETH:
WHEREAS,
Pilgrim’s Pride desires Vendor to provide services as mutually agreed upon by
the Parties as more fully set forth in Exhibit “A” attached hereto and
incorporated herein by reference (the “Services”); and
WHEREAS,
Vendor is experienced in all facets of the Services and is agreeable to
providing such Services for Pilgrim’s Pride.
NOW,
THEREFORE, in consideration of the mutual promises contained herein and subject
to all terms and conditions hereof, Pilgrim’s Pride and Vendor agree as
follows:
1. Scope
of Vendor’s Authority.
|
Pilgrim’s
Pride authorizes Vendor to provide the Services specified on Exhibit
“A”
attached hereto and incorporated herein by reference. Vendor shall
not
commence said Services without the authorization of Pilgrim’s
Pride.
|
2. Fees
and Charges.
|
In
consideration of the Services performed by Vendor, Pilgrim’s Pride agrees
to pay Vendor the service fees and other charges as specified on
Exhibit
“B” attached hereto and incorporated herein by reference within 30 days
from the later of i) the date of receipt of invoice at the following
listed address or ii) upon acceptance of the Services as being
satisfactory to Pilgrim’s Pride. All invoices must be sent to Pilgrim’s
Pride at the following address:
|
Pilgrim’s
Pride Corporation
P.O.
Box
5000
Pittsburg,
Texas 75686
Attn:
Accounts Payable
Service
Agreement FINAL 12-19-05.doc
3. Term
and Termination.
| 3.1. |
The
Initial Term of this Agreement is up to one (1) calendar year, beginning
on the Effective Date and ending on December 31st
of
the year in which such Agreement is executed by the Parties. This
Agreement will automatically renew for another one (1) year term
on each
January 1st
following the Effective Date (the “Renewal Term”), unless otherwise
terminated in accordance with the provisions of this
section.
|
| 3.2. |
Either
Party may terminate this Agreement, with or without cause, by giving
the
other Party sixty (60) days prior written notice of termination using
the
notice procedure described in Section 11
below.
|
| 3.3. |
This
Agreement may be terminated by either Party by providing written
notice of
“Immediate Termination” to the other Party in any of the following
circumstances:
|
| 3.3.1. |
if
a Party fails to pay any amount owed to the other Party under this
Agreement within ten (10) days after receipt of written “Late Notice”
demanding payment; or
|
| 3.3.2. |
if
a Party fails to cure a breach of a material provision of this Agreement,
other than non-payment of any amount owed to the other Party hereunder,
within thirty (30) calendar days after receipt of written notice
demanding
cure.
|
| 3.4 |
This
Agreement will be terminated immediately by Pilgrim’s Pride in any of the
following circumstances:
|
| 3.4.1 |
If
Vendor becomes the subject of an insolvency or bankruptcy proceeding
or
makes an assignment of all or substantially all of its assets for
the
benefit of its creditors;
|
| 3.4.2 |
If
Vendor has not provided any Services to Pilgrim’s Pride during the
previous calendar year.
|
| 3.5 |
Upon
termination of this Agreement, Vendor shall return to Pilgrim’s Pride all
originals and copies of documents provided by Pilgrim’s Pride for purposes
of this Agreement.
|
4. Representations
of Vendor.
Vendor
represents and warrants as follows:
| 4.1 |
It
will comply with all applicable laws, rules and regulations governing
the
provision of Services and the performance of its dutites under this
Agreement.
|
Service
Agreement FINAL 12-19-05.doc
| 4.2 |
It
is duly authorized and licensed to perform the Services and its duties
hereunder in each jurisdiction in which it will
act.
|
| 4.3 |
It
will maintain insurance requirements per Section 5 below and agrees
that
Pilgrim’s Pride can withold payment for Services if and for so long as it
fails to comply with Section 5.
|
5. Insurance.
Vendor
agrees to maintain in effect insurance coverage with reputable insurance
companies covering worker’s compensation and employer liability (or other
reasonable equivalent, as soley determined by Pilgrim’s Pride’s Risk Management
Department, such as excess employer’s indemnity insurance or excess worker’s
compensation) excess insurance, auto liability, commercial general liability,
including product liability/completed operations, all with such limits as are
sufficient to protect Vendor and Pilgrim’s Pride from the liabilities insured
against by such coverage. Vendor’s insurance described herein shall be primary
and not contributory with Pilgrim’s Pride’s insurance with respect to
obligations resulting from the negligence of Vendor.
Vendor
shall have the following minimum requirements on their Certificate of Insurance.
General
Liability
General
Aggregate$2,000,000
Products/Completed
Operations$1,000,000
And/or
Professional Liability $1,000,000
(if applicable)
Each
Occurrence$1,000,000
Automobile
Liability
Combined
Single Limit$1,000,000
Workers
Compensation Statutory
Employers'
Liability
Each
Accident $100,000
Policy
Limit $500,000
Each
Employee $100,000
Pilgrim's
Pride Corporation is to be listed as an Additional Insured on General Liability
and Auto policies. A 30-day notice of cancellation is also required. Pilgrim's
Pride Corporation reserves the right to modify these requirements as deemed
necessary for the risk presented to Pilgrim's Pride Corporation.
The
certificate holder address should read as follows:
Pilgrim's
Pride Corporation
Attn:
Risk Management
4845
Hwy.
271 N
P.O.
Box
93
Pittsburg,
TX 75686
Service
Agreement FINAL 12-19-05.doc
| 6.1. |
Each
Party shall indemnify and hold harmless the other Party and all of
its
directors, officers, employees and agents (the “Indemnitees”) from and
against any claims, losses, damages, liens, judgments, awards, penalties
or other costs or expenses (including, but not limited to, any reasonable
attorneys’ fees), and defend, at such Party’s cost, each Indemnitee
against any threatened, pending or initiated claim, action, litigation,
suit, arbitration, mediation or proceeding, arising out of or connected
with a violation of law by such Party, a breach of such Party’s
obligations under this Agreement, or any negligence or willful misconduct
by any employee, agent, contractor or other representative of such
Party.
Parties shall notify each other as soon as reasonably practicable
of any
such claim, action, litigation, suit, arbitration, mediation or proceeding
and provide the other Party with reasonable assistance in the defense
thereof; provided that such delay or failure to deliver any such
notice
shall not relieve either Party’s obligations under this provision except
to the extent such delay or failure materially prejudices either
Party’s
obligations hereunder.
|
| 6.2. |
Termination
of this Agreement shall not relieve either Party of its respective
obligations of indemnification under this
section.
|
7. Confidentiality.
|
Vendor
acknowledges that its employees and other representatives will be
exposed
to confidential and proprietary information of Pilgrim’s Pride during the
ordinary course of providing the services contemplated by this Agreement.
Vendor agrees to use its best efforts and to cause its employees
and other
representatives to use the same degree of care to maintain the
confidentiality of such information as it would and/or does with
respect
to its own proprietary and confidential business information. Vendor
agrees to refrain from disclosing any part of Pilgrim’s Pride’s
confidential and proprietary information to a third party. Vendor
further
agrees not to use any confidential and proprietary business information
of
Pilgrim’s Pride for any purpose other than the performance of the Services
described hereunder.
|
8. Audit.
Vendor
shall keep accurate books of account and records covering all transactions
involving the products and/or services provided by Vendor. Pilgrim’s Pride, or
its authorized representatives, shall have the right, during normal business
hours, to examine such books and records to the extent necessary to determine
Vendor’s compliance with the supply of the products and/or services under this
Agreement. All such books and records shall be kept available during the term
of
business relationship and for at least three (3) years after their
creation.
Service
Agreement FINAL 12-19-05.doc
9. No
Gratuities.
Neither
Party will offer or provide to the employees, agents or other representatives
of
the other Party any favors, gratuities, gifts, payments, or anything of value,
whether or not in an attempt to influence such person’s administration of the
provisions of Agreement or to otherwise gain unfair advantage individually
and/or relative to competing suppliers/vendors.
Additionally,
each Party will immediately report to the other Party any requests made for
favors, gratuities, gifts, payments, or anything of value by employees, agents
or other representatives of such Party and will cooperate with respect to any
inquiry or investigation being conducted related to such activities or alleged
activities. Pilgrim’s Pride has established its PRIDE Line with the toll-free
number of 1-888-536-1510 to report any unethical conduct.
10. Amendment
and Waiver.
10.1
This
Agreement and the Exhibits attached hereto contain the entire agreement between
the Parties with respect to the subject matter hereof and shall not be amended
except in a writing duly signed by both Parties to this Agreement.
10.2
The
failure of either Party to insist upon strict adherence to any term or condition
of this Agreement on any occasion shall not constitute a waiver of such Party’s
rights to insist upon strict adherence to such term or provision on a subsequent
occasion. Any of the terms or provisions of this Agreement may be waived at
any
time, and from time to time, in writing by the Party entitled to the benefit
thereof without impairing or diminishing any other term or provision hereof.
Waiver by either Party of a breach of any term or provision of this Agreement
shall not operate as or be construed as a waiver of any subsequent
breach.
11. Notice.
All
notices, requests and other communications (“Notices”) required or permitted to
be given under this Agreement shall be given in writing and shall be deemed
duly
delivered if delivered personally with receipt acknowledged, if delivered by
an
overnight delivery service such as UPS or FedEx, or by United States
registered or certified first class mail, postage paid, return receipt
requested, addressed to the Parties at the following addresses, or such other
address as any Party may specify hereinafter by giving notice to the other
Party
in accordance with the procedure outlined in this section:
Service
Agreement FINAL 12-19-05.doc
If
to Pilgrim’s
Pride:
Pilgrim’s
Pride Corporation
4845
Hwy.
271 N
Pittsburg,
Texas 75686
Attn:
Risk Management - Contracts
Telephone:
903-434-1000
If
to Vendor:
Pat
Pilgrim
1535
Loop
179
Pittsburg,
TX 75686
Telephone:
903-856-0316
Notices
shall be deemed duly received on the date of confirmed delivery.
12. Assignment.
Except
for merger, sale or acquisition of Pilgrim’s Pride, neither Party may assign its
rights and obligations under this Agreement without the prior written consent
of
the other Party. All representations, convenants and warranties of this
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successor or permitted assigns. Nothing in this Agreement
is
intended or shall be construed to confer upon or give to any person or entity
other than Pilgrim’s Pride and Vendor any right, remedy or claim
hereunder.
13. Severability.
If
any
provision of this Agreement shall be declared invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby and shall remain
in
full force and effect.
14. Dispute
Resolution.
If
a
dispute arises from or relates to transactions between the Parties, the Parties
shall endeavor to settle the dispute first through direct discussions and
negotiations. If the dispute cannot be settled through direct discussions,
the
Parties shall endeavor to settle the dispute by mediation under the Mediation
Rules of the American Arbitration Association before recourse to the arbitration
procedures contained in this Agreement. If a dispute has not been resolved
within 90 days after the written notice beginning the mediation process (or
a
longer period, if the Parties agree to extend the mediation), the mediation
shall terminate and the dispute shall be settled by binding arbitration in
Dallas, Texas or such other location as agreed upon by the Parties. The
arbitration will be conducted in accordance with the procedures in this document
and the Rules of the American Arbitration Association in effect on the date
of
the engagement letter, or such other rules and procedures as the Parties may
designate by mutual agreement. In the event of a conflict, the provisions
of this document will control.
Service
Agreement FINAL 12-19-05.doc
The
arbitration shall be conducted by a single arbitrator as agreed upon by the
Parties. If the Parties cannot agree on a single arbitrator, the arbitration
will be conducted before a panel of three arbitrators, one selected by each
Party and the third arbitrator selected by the Parties’ two arbitrators from a
panel provided by the American Arbitration Association. Any issue
concerning the extent to which any dispute is subject to arbitration, or
concerning the applicability, interpretation, or enforceability of these
procedures, including any contention that all or part of these procedures are
invalid or unenforceable, shall be governed by the agreement between the Parties
and the Federal Arbitration Act and resolved by the arbitrators. No
potential arbitrator shall be appointed unless he or she has agreed in writing
to abide and be bound by these procedures.
The
individual arbitrator or the arbitration panel shall have no power to award
non-monetary or equitable relief of any sort. The arbitrator/panel shall
also have no power to award (a) damages inconsistent with any applicable
agreement between the Parties or (b) punitive damages or any other damages
not
measured by the prevailing Party’s actual damages; and the Parties expressly
waive their right to obtain such damages in arbitration or in any other
forum. In no event, even if any other portion of these provisions is held
to be invalid or unenforceable, shall the arbitrator/panel have power to make
an
award or impose a remedy that could not be made or imposed by a court deciding
the matter in the same jurisdiction.
Discovery
shall be permitted in connection with the arbitration only to the extent, if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the Party seeking discovery.
All
aspects of the arbitration shall be treated as confidential. The Parties
and the arbitrator/panel may disclose the existence, content or results of
the
arbitration only as provided in the Rules or by the Parties. Before making
any such disclosure, a Party shall give written notice to all other Parties
and
shall afford such Parties a reasonable opportunity to protect their
interests.
The
result of the arbitration will be binding on the Parties, and judgment on the
arbitration award may be entered in any court having jurisdiction. The
prevailing Party in any dispute that is resolved by this dispute resolution
process shall be entitled to recover from the other Party reasonable attorneys’
fees, costs and expenses incurred by the prevailing Party in connection with
such dispute resolution process.
Service
Agreement FINAL 12-19-05.doc
15. Jurisdiction
and Venue.
The
provision for products and/or services between the Parties will be deemed to
have been made and will be construed and interpreted in accordance with the
laws
of the State of Texas. If any matters in dispute are required to be settled
by
litigation, such trials will be decided by a judge. THE
PARTIES WAIVE TRIAL BY JURY IN ANY SUCH ACTION(S) AND CONFIRM THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO THEIR BUSINESS TRANSACTIONS. For
any such action(s) related to their business transactions or enforcement of
any arbitration, the Parties submit themselves to the jurisdiction of the state
or federal courts located in Dallas, Texas.
IN
WITNESS WHEREOF
the
Parties have caused this Agreement to be executed by their respective duly
authorized officers as of the date first written above.
PILGRIM’S
PRIDE CORPORATION PAT
PILGRIM d/b/a Pat Pilgrim Farms:
By:
/s/
Richard A. Cogdill By:
/s/
Pat Pilgrim
Name:
Richard
A. Cogdill Name:
Pat
Pilgrim
Title:
Exec.V.P.,
CFO, Sec. & Treas. Title:
Owner
PPF
Date:
1/3/06 Date:
12-28-05
/s/
TT
Tim
Thomas (Initials)
Sr.
V.P.
- Procurement
Service
Agreement FINAL 12-19-05.doc
EXHIBIT
A
SERVICES
Vendor
agrees to provide the following “Services:”
| · |
Any
Services requested by Pilgrim’s Pride and mutually agreed upon by the
Parties.
|
Service
Agreement FINAL 12-19-05.doc
EXHIBIT
B
FEES
AND CHARGES
______________________________________________________fees
are as follows:
Service
Agreement FINAL 12-19-05.doc
Exhibit
10.3
TRANSPORTATION
AGREEMENT
This
Agreement for transportation of Goods (the “Agreement”) is made and entered into
effective the 28th
day of
Dec., 2005, (the “Effective Date”),
by and
between PILGRIM’S PRIDE CORPORATION, a Delaware corporation (“Shipper”), and PAT
PILGRIM d/b/a PAT
PILGRIM FARMS, (“Carrier”).
R
E C I T A L S:
WHEREAS,
Carrier is an independent contractor engaged in the business of transporting
freight in intrastate and interstate commerce and desires to provide motor
contract carrier services to Shipper for the transportation of chickens and
other goods, which are considered general commodities (“cargo” or “Commodities”)
under Federal Highway Administration Permit No. _______________ issued to
Carrier by the Federal Highway Administration Division of the Department
of
Transportation a copy of which is attached hereto as Exhibit “1” and made a part
hereof, and
WHEREAS,
Shipper desires Carrier from time to time to provide motor contract carrier
services of transportation, as set forth in Exhibit A attached hereto and
incorporated by reference herein, to Shipper’s customers of certain Commodities
sold by Shipper.
NOW,
THEREFORE, in consideration of the mutual covenants and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge; Carrier and Shipper
agree
as follows:
ARTICLE
1
Section
1.1 Subject
to the terms and provisions hereof, Shipper agrees to tender to Carrier an
indeterminable number of Shipments (hereinafter defined) during the term
of this
Agreement, but not less than three (3) per year, and Carrier agrees to provide
Suitable Equipment (hereinafter defined) to transport said Shipments, provided
the booking procedures set forth in Section 1.4 herein are followed and Carrier
agrees to transport such shipments in accordance with the terms and conditions
stated herein.
Section
1.2 A
Shipment shall consist of a full trailer load of Commodities. Suitable Equipment
means (i) a refrigerated trailer that is at least 48 feet long and 102 inches
wide, that will haul a minimum of 45000 pounds gross weight of product, with
each said trailer being clean, insect and rodent free, odor free, water tight
and uncontaminated by prior use, not ever having been used for transportation
or
storage of toxic chemicals of any kind, including, without limitation,
insecticides, rodenticides, and/or hazardous materials, substances or chemicals,
unless otherwise agreed upon in writing by waiver of specified materials
executed by Shipper’s Sr. Vice President of Quality Control and Vice President
of Risk Management, at Shipper’s sole discretion, prior to Shipment; and (ii) a
tractor power unit with sufficient power for towing the trailer, in good
operating condition and repair, and with a driver experienced in handling
the
transportation of Commodities with such a rig and trailer and with a good
driving record.
Section
1.3 Carrier
shall furnish to Shipper a copy of the United States Department of
Transportation General Motor Carrier Safety Administration Form MCS-150,
Form
MCS-90, and Form BMC-91X filed by Carrier as well as subsequent updates for
the
duration of the business relationship.
Section
1.4 When
Shipper desires Carrier to transport a Shipment, Shipper will notify Carrier
by
e-mail, Electronic Data Interchange (EDI), verbally and/or by facsimile,
specifying the load, the destination, and the date by which the load must
reach
the destination. Carrier will either accept or reject the opportunity to
transport the Shipment by return e-mail, EDI, and/or facsimile to the Shipper
in
Section 13.4. If Carrier accepts, Carrier will be bound by the terms of this
Agreement with respect to each such Shipment. If Carrier rejects, the rejected
load will be considered as an allocated load to the Carrier in accordance
with
Shipper obligations to award Carrier primary coverage of said lane.
1
Section
1.5 Time
is
of the essence in Carrier’s performance of its obligations hereunder, and
Carrier agrees to provide timely communication relative to load tenders and
to
transport all Shipments with prompt and reasonable dispatch in accordance
with
scheduled delivery dates set by Shipper and its customers, as communicated
to
Carrier as set forth in Section 1.4 herein, subject, however, to compliance
by
Carrier with applicable laws and regulations and to conditions beyond Carrier’s
control.
ARTICLE
2
Compensation
Section
2.1 Carrier
shall be compensated for each Shipment in accordance with the rates set forth
on
IBIDTransport.com, a web-based rate management system, or based on the delivery
destination of the cargo, the total number of tons of cargo hauled by Carrier
and the agreed upon rate as contained in the applicable purchase order. The
fees
paid to Carrier shall be no more favorable than the fees paid by Shipper
to any
other third party carrier. User name and password will be issued by Ilens
Logistics Group at the request of Pilgrim’s Pride. Carrier agrees that “P. C.
Miler v.14” shortest miles option shall be utilized as the basis for computing
the mileage from the point of origination of a shipment to the point of
destination of a Shipment. Any deviation from this aforementioned method
must be
approved in advance in writing by Shipper.
Section
2.2 Carrier
represents and warrants that, during the term of this Agreement, the rates
agreed upon hereunder as may be modified in accordance with the terms hereof
from time to time, together with all charges, surcharges, rebates, discounts,
incentives and allowances agreed upon by the parties (collectively, “Pricing
Terms”), offered to Pilgrim’s Pride under this Agreement, are and will remain as
favorable as, or better than the Pricing Terms offered by Carrier to any
other
shipper shipping similar products in like quantities. In the event that Carrier
at any time agrees, in writing or otherwise, to Pricing Terms with another
shipper that are in any way more favorable than the Pricing Terms agreed
to with
Pilgrim’s Pride, Carrier shall promptly notify Pilgrim’s Pride in writing and
offer such terms to Pilgrim’s Pride. In the event Pilgrim’s Pride accepts such
modified terms, the parties shall promptly prepare and execute an amendment
to
this Agreement reflecting such revised terms. Carrier (or its applicable
subsidiary) shall annually on the anniversary of this Agreement, certify
to
Pilgrim’s Pride that Carrier remains in compliance with this
provision.
Section
2.3 At
the
time the Shipment is fully delivered, an invoice covering that Shipment will
be
generated by Carrier and delivered to Shipper, in accordance with the rates
Carrier places in IBID, or based on the delivery destination of the cargo,
the
total number of tons of cargo hauled by Carrier and the agreed upon rate
as
contained in the applicable purchase order. The invoice will be due and payable
thirty (30) days
from
the date of receipt of the invoice, provided that on or before said date
Shipper
has received from Carrier (i) duly executed receipt(s) from whom delivery
was
made concerning the applicable invoice, and (ii) such other supporting materials
as Shipper may reasonably require.
Section
2.4 Carrier
shall maintain complete and accurate records of each Shipment and all
transactions under this Agreement, including all supporting documentation
and
proof of delivery, and in a manner consistent with generally acceptable
accounting procedures. Within two (2) days notice by Shipper, Carrier shall
provide Shipper and/or its representatives with access to and the right to
examine all records involving any transaction related to the Agreement. Such
right shall be for the period covered by this Agreement and until the expiration
of five (5) years after termination of this Agreement.
ARTICLE
3
Payment
of Rates and Charges
Section
3.1 Within
thirty (30) days after Shipper’s receipt of Carrier’s delivery receipt, Shipper
shall pay Carrier the rates and charges applicable to the shipment of cargo.
In
exchange for Shipper’s guarantee of prompt payment, (i) agrees not to contact
Shipper’s customers, consignors, consignees or any party other than Shipper
concerning payment for transportation services; and, (ii) agrees to indemnify,
defend, and hold Shipper, its customers, consignors, and consignees harmless
from any claim or demand made by any subcontractor of Carrier or other party
for
payment for transportation services related to a shipment of cargo tendered
under this Agreement.
2
Section
3.2 Any
claim
for overpayment or underpayment for transportation services provided pursuant
to
this Agreement shall be presented by the party asserting the claim to the
other
party within sixty (60) days of discovery of the claim, but in no event will
any
such claim(s) be asserted more than one hundred eighty (180) days after the
delivery of the shipment or shipments giving rise to any such claim. Claims
shall be supported by appropriate documentation showing the amount of the
overcharge or the undercharge, as the case may be. The Parties shall pay,
deny,
or make a firm compromise offer within forty-five (45) days of receiving
a
claim.
Section
3.3 Carrier
will pay all licenses, fees, taxes, fuel tax payments, road tax, equipment
use
fees or taxes, equipment license fees, driver’s license fees, tolls and any
other fees and fines that may be assessed on its equipment or its
operations.
ARTICLE
4
Term
Section
4.1 This
Agreement shall be continuously in effect beginning as of the Effective Date,
unless terminated as herein provided.
Section
4.2 Either
party may terminate this Agreement for any reason by giving the other party
at
least thirty (30) days
prior written notice.
ARTICLE
5
Acceptance
of Commodities, Risk of Loss and Claims
Section
5.1 Carrier,
by accepting Shipper’s Commodities for transportation, whether or not by signing
an original Bill of Lading or accepting an electronic shipping document in
lieu
of an original Bill of Lading, acknowledges that the Commodities are in good
condition except for any exceptions written on these documents. All shipments
shall be transported under the bill of lading utilized by Shipper or such
other
documents that Shipper and Carrier may mutually agree in writing to use.
To the
extent the terms and conditions of any bill of lading, purchase order, invoice
or other document or instrument conflict with any provision of this Agreement,
the terms of this Agreement will control.
Section
5.2 Handling
procedures for claims
for loss, damage and delays (but specifically not salvage rights as set forth
in
Section 5.3 below and claims handling resolution) will be in accordance with
49
C.F.R. 370. The form for loss/damage claims to be utilized by the parties
shall
be the form attached hereto as Exhibit “2.” For claims purposes hereunder, the
full amount of each invoice generated by Shipper to whom the Commodities
constituting the cargo are being sold, shall be the agreed value of the
applicable cargo.
Section
5.3 Except
with the express written consent of Shipper, Carrier shall not under any
circumstances whatsoever cause, suffer or permit either (i) the sale or disposal
of any Commodities constituting the cargo or (ii) any offer to sell or dispose
of any such Commodities, whether as salvage or otherwise. In the event of
an
accident involving any Commodities being transported by Carrier for Shipper,
the
decision regarding the disposition of such Commodities shall be within the
sole
and absolute discretion and right of Shipper. If the product is determined
to be
salvageable by the Shipper, any salvage or rendering value, less associated
costs, shall be credited to Carrier’s account to offset such loss liabilities.
Title to such Commodities and the right to determine disposition of same
remains
with Shipper during transport and shall pass to Customer upon delivery and
acceptance of such Commodities by Customer without any noted discrepancy.
However, Carrier shall remain liable to Shipper as if Carrier was a common
carrier at common law for the full actual loss, damage or injury to Commodities
occurring while in the custody, possession or control of Carrier hereunder
or
resulting from Carrier’s performance or failure to perform the services provided
for in this Agreement, except to the extent such performance is excused under
Section 13.10 hereof.
Section
5.4 With
regard to Carrier’s liability to Shipper for loss, damage or injury to
Commodities, Carrier shall indemnify and hold harmless Shipper and all of
its
directors, officers, employees and agents (the “Indemnitees”) from and against
any claims, losses, damages, judgments, awards, penalties or other costs
or
expenses (including, but not limited to, any reasonable attorneys’ fees), and
defend, at Carrier’s cost, each Indemnitee against any threatened, pending or
initiated claim, action, litigation, suit, arbitration, mediation or proceeding,
arising out of or connected with any cargo claims. Any such cargo claim
includes, but is not limited to, prepaid shipping costs, storage,
rework/transportation charges as well as the full invoice value of the loss
of,
damage to, or destruction of Commodities, either partial or total, which
occurred while such Commodities were in the custody, possession or control
of
Carrier or parties under its control including, but not limited to, employees,
agents or other representatives of Carrier.
3
ARTICLE
6
Insurance
Section
6.1 Carrier
shall have obtained as of the Effective Date and shall maintain throughout
the
term of this Agreement, insurance according to Shipper’s vendor insurance
requirements policy which has been incorporated by reference and herein attached
as Exhibit “3.”
Section
6.2 Carrier
shall deliver to Shipper, as of the Effective Date and whenever thereafter
reasonably requested by Shipper, certificates of insurance from each applicable
insurer reflecting the effectiveness of the insurance coverages required
in
Section 6.1 herein, providing for at least thirty (30) days
advance written notice to Shipper of the insurer’s intention to cancel or
materially change any of the insurance policies.
Section
6.3 In
lieu
of providing the insurance coverages described above and with the express
approval of Shipper’s Risk Management Department, Carrier may furnish evidence
of its authorization to self-insure.
ARTICLE
7
Indemnification
Section
7.1 CARRIER
SHALL DEFEND, INDEMNIFY, AND SAVE SHIPPER, ITS’ AFFILIATED ENTITIES, AND THE
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF SHIPPER HARMLESS FROM AND AGAINST
ANY AND ALL LOSSES, COSTS, EXPENSES, CLAIMS, DEMANDS, LIABILITIES, SUITS
OR
ACTIONS (INCLUDING ALL REASONABLE EXPENSES AND ATTORNEY’S FEES) ARISING OUT OF
INJURIES TO OR THE DEATH OF ANY PERSON OR PERSONS, INCLUDING THE EMPLOYEES
OF
EACH PARTY HERETO, OR ARISING OUT OF LOSS OF OR DAMAGE TO THE PROPERTY OF
ANY
PERSON OR PERSONS, INCLUDING THE PROPERTY OF SHIPPER (EXCLUDING LOSS AND
DAMAGE
TO CARGO WHICH IS COVERED ELSEWHERE IN THIS AGREEMENT) TO THE EXTENT CAUSED
BY
OR RESULTING FROM THE NEGLIGENCE OF CARRIER OR ANY OF ITS AGENTS,
SUBCONTRACTORS, EMPLOYEES OR PARTIES UNDER ITS CONTROL AND ARISING OUT OF
OR
RELATED TO CARRIER’S PERFORMANCE UNDER THIS AGREEMENT. CARRIER ASSUMES NO
LIABILITY UNDER THIS PARAGRAPH FOR ANY OCCURRENCE THAT IS THE RESULT OF THE
SOLE
NEGLIGENT ACTS OR OMISSIONS OF SHIPPER.
ARTICLE
8
Representations
and Warranties of Carrier
Section
8.1 Carrier
hereby represents and warrants to Shipper, that as of the Effective Date
and as
of the date of each Shipment:
(a) Their
Federal Highway Administration permit is valid and is in full force and effect,
not having been rescinded or affected in any way and Carrier has obtained
and
maintained all other licenses, permits and authorizations and approvals of
whatever kind and nature applicable to Carrier and for the transportation
services provided hereunder.
4
(b) All
applicable federal, state and local laws and regulations or orders have been
and
will be strictly complied with, including, without limitation, (i) no
commingling of Commodities with any hazardous substances or poisons as defined
by the U. S. Department of Transportation, Environmental Protection Agency,
Federal Drug Administration, or any other federal, state, or local governmental
agency or municipality, and (ii) compliance with the requirements of the
Sanitary Food Transportation Act of 1990, as may be amended from time to
time,
and any regulations derived therefrom, including, without limitation, shipping
Commodities only with food and acceptable non- food products as defined in
the
Sanitary Food Transportation Act of 1990.
(c) Carrier
(and if different from Carrier, any driver of a Shipment) has not been and
is
not now under any indictment, or a defendant in any lawsuit, or the subject
of
any administrative or other proceeding instituted by any federal, state or
local
governmental agency or entity, and to the best of its (their) knowledge there
are no such proceedings threatened.
(d) If
Carrier is a corporation, general partnership, limited partnership, joint
venture, trust, or other type of business association, as the case may be,
Carrier (i) if either a corporation duly incorporated or a partnership or
trust,
joint venture or other type of business association duly organized, is validly
existing, and in good standing under the laws of the state of its formation
or
existence, and has complied with all conditions prerequisite to its doing
business in Texas and any other state where Carrier conducts business, and
(ii)
has all requisite power and all governmental certificates of authority,
licenses, permits, qualifications and documentation to operate its trucks
or
trailers and to carry on its business as now being, and as proposed to be,
conducted.
(e) The
execution, delivery, and performance by Carrier of this Agreement (i) is
within
Carrier’s powers and have been duly authorized by Carrier, (ii) will not
violate, be in conflict with, result in a breach of, or constitute (with
due
notice or lapse of time, or both) a default under a violation of any agreement
of Carrier, and (iii) this Agreement constitutes the legal, valid, and binding
obligations of Carrier, enforceable in accordance with its respective
terms.
(f) All
information, financial statements, insurance certificates, and any other
data
and instruments given or to be given to Shipper are, or at the time of delivery
will be, accurate, complete, and correct in all material respects and do
not, or
will not, omit any fact, the inclusion of which is necessary to prevent the
facts contained therein from being materially misleading.
(g) All
federal, state, county, municipal, and City income and other tax returns
required to have been filed by Carrier have been timely filed and all taxes
and
related liabilities which have become due pursuant to such returns or pursuant
to any assessments received by Carrier have been paid in full.
(h) Carrier
has received and continuously maintained a “satisfactory” safety rating as
issued by the U. S. Department of Transportation.
(i) The
insurance coverages required by Section 6.1 herein are in full force and
effect
and will not lapse or be terminated at any time during the term of this
Agreement.
ARTICLE
9
Carrier’s
Operating Authority and Safety Rating
Section
9.1 Carrier
represents and warrants that all transportation performed under this Agreement
shall be contract carriage. To the extent that Carrier performs services
pursuant to this Agreement within, or to or from Canada, it shall procure
and
maintain any and all operating authorities or permits required to be held
by
Carrier under any applicable Federal, Provincial or Territorial laws and
shall
adhere to the Canadian National Safety Code. Without cost to Shipper, Carrier
shall provide and complete all preventive maintenance and ongoing maintenance
including, but not limited to, periodic safety inspections, annual safety
inspections and emissions testing pursuant to the standards set out in any
and
all of the applicable motor vehicle statutes and regulations of the applicable
jurisdiction(s) of operation. Carrier warrants that it shall notify Shipper
in
the event of any suspension, cancellation, termination, or withdrawal of
its
operating authorities, in which event,
Shipper
shall have the right to terminate this Agreement immediately upon written
notice
to Carrier.
Section
9.2 Carrier
further represents and warrants that it shall at all times maintain a U.S.
DOT
safety rating that is “satisfactory”, “conditional”, (subject to Shipper’s
policies as amended from time to time), or “unrated”; and if to the extent that
Carrier performs services pursuant to this Agreement within, or to or from
Canada, comparably, Carrier shall maintain a Canadian “carrier safety rating”
that is “satisfactory”, “conditional” or “satisfactory-unaudited” in accordance
with the Ontario Ministry of Transportation standards pursuant to the Highway
Traffic Act and Regulations and/or any other Provincial or Territorial
equivalent, which has jurisdiction over the Carrier’s operations. Carrier
warrants that it will promptly notify Shipper if Carrier is assessed an
“unsatisfactory” safety rating, or if any equipment is known to be or reported
as defective or which is not in compliance with the applicable Federal, State,
Provincial or Territorial statute or regulation pertaining to vehicle or
highway
safety and Shipper will suspend all service with Carrier and this Agreement
shall be terminated.
5
Section
9.3 To
the
extent that Carrier performs services pursuant to this Agreement within,
or to
or from Canada, Carrier warrants that it holds a valid registration with
the
Commercial Vehicle Operator’s Registration (CVOR) System for transporting goods
through Canada. Carrier shall notify Shipper immediately of any conviction
or
sanction against its CVOR rating.
Section
9.4 To
the
extent that Carrier performs services pursuant to this Agreement within,
or to
or from Canada, Carrier holds a valid license or certificate to operate an
Extra-Provincial truck undertaking, and to engage in the Intra-Provincial
truck
transportation of goods or valid overweight permits pursuant to any applicable
laws if necessary or as issued under the Motor Vehicle Transport Act, 1987
or
any Highway Traffic Act or equivalent as applicable to the jurisdiction of
the
trip/route.
Section
9.5 To
the
extent that Carrier performs services pursuant to this Agreement within,
or to
or from Canada, Carrier is authorized to transact bonded highway carrier
operations in Canada, and warrants that it holds the applicable bonded highway
carrier code as issued by the Canada Border Services Agency
(“CBSA”).
Section
9.6 To
the
extent that Carrier performs services pursuant to this Agreement within,
or to
or from Canada, Carrier has signed Partners in Protection memorandum of
understanding with the CBSA and has been certified and/or validated by the
United States Bureau of Customs and Border Protection (“CBP”) as a participant
in the Customs-Trade Partnership Against Terrorism.
Section
9.7 To
the
extent that Carrier performs services pursuant to this Agreement within,
or to
or from Canada, Carrier warrant that it is an approved carrier under the
CBSA’s
Customs Self-Assessment program, and is a registered participant in the Free
and
Secure Trade (“FAST”) program and that it holds a Standard Alpha Code number as
issued by the National Motor Freight Association (“NMFTA”).
ARTICLE
10
Drivers
and Equipment
Section
10.1 Carrier
shall ensure that he/she and his/her/its drivers are properly trained and
licensed, and are competent and capable of safely handling and transporting
Shipper’s shipments of cargo. Carrier agrees that drivers will be dispatched in
accordance with the maximum available hours of service as provided in rules
promulgated by the FMCSA while in the United States or as provided by any
Canadian authority whose jurisdiction is within Carrier’s route/trip.
Section
10.2 Carrier
shall provide and maintain all equipment required for the services requested
by
Shipper and shall only
use and
provide equipment that is clean, in good operating condition and repair,
in
compliance with any and all Federal and/or State, Provincial/Territorial,
Municipal statutes and regulations, and is suitable and properly configured
to
safely load, transport, and unload the shipments of cargo tendered by Shipper.
Carrier shall ensure that all equipment and all loads are in compliance with
the
environmental standards of any and all jurisdictions on its route and must
act
in accordance with these environmental standards.’ All equipment provided for
the transportation of food or food grade products will comply with the
requirements of The Sanitary Food Transportation Act, or, to the extent that
Carrier performs services pursuant to this Agreement within, or to or from
Canada, the Food and Drug Acts and any/all other applicable statutes and
regulations, including, but not limited to the Ontario Food Safety and Quality
Act, 2001, or any other jurisdiction’s equivalent.
Section
10.3 Drop
Trailer/Interchange. In the event that Carrier participates in a drop trailer
arrangement for the benefit of any of Shipper’s customers or Shipper, Carrier
agrees that it shall address all damage or liability issues directly with
the
responsible customer or Shipper. Carrier agrees that Shipper shall only be
responsible for the direct acts of its employees, and not for the actions
of
customers, lumpers, draymen, other carriers, or any other third party (“Third
Parties”), unless Shipper proximately caused or contributed to the actions of
any of the Third Parties. If Carrier agrees to interchange equipment to another
carrier or to use equipment owned by a third party, Carrier, will address
any
interchange agreement directly with that motor carrier or equipment
owner.
6
ARTICLE
11
Independent
Contractor
Section
11.1 Carrier
shall be an independent contractor with respect to all work performed under
this
Agreement. Neither Carrier nor anyone used or employed by Carrier shall
be
deemed for any purpose to be the employee, agent, servant, or representative
of
Shipper in the performance of such work, or in any matters arising out
of
Carrier’s obligations under this Agreement. Shipper shall have no right of
supervision, direction or control over Carrier, its employees, or agents.
As an
independent contractor, Carrier assumes full responsibility for the payment
of
federal, state and local taxes or contributions or taxes for unemployment
insurance, pensions, worker’s compensation, and related matters with respect to
Carrier’s employees engaged in the performance of its services.
ARTICLE
12
Dispute
Resolution
Section
12.1
If a
dispute arises from or relates to transactions between the Parties, the
Parties
shall endeavor to settle the dispute first through direct discussions and
negotiations. If the dispute cannot be settled through direct discussions,
the
Parties shall endeavor to settle the dispute by mediation under the Mediation
Rules of the American Arbitration Association before recourse to the arbitration
procedures contained in this Agreement. If a dispute has not been resolved
within 90 days after the written notice beginning the mediation process
(or a
longer period, if the Parties agree to extend the mediation), the mediation
shall terminate and the dispute shall be settled by binding arbitration
in
Dallas, Texas or such other location as agreed upon by the Parties. The
arbitration will be conducted in accordance with the procedures in this
document
and the Rules of the American Arbitration Association in effect on the
date of
the engagement letter, or such other rules and procedures as the Parties
may
designate by mutual agreement. In the event of a conflict, the provisions
of this document will control.
Section
12.2 The
arbitration shall be conducted by a single arbitrator as agreed upon by
the
Parties. If the Parties cannot agree on a single arbitrator, the arbitration
will be conducted before a panel of three arbitrators, one selected by
each
Party and the third arbitrator selected by the Parties’ two arbitrators from a
panel provided by the American Arbitration Association. Any issue
concerning the extent to which any dispute is subject to arbitration, or
concerning the applicability, interpretation, or enforceability of these
procedures, including any contention that all or part of these procedures
are
invalid or unenforceable, shall be governed by the agreement between the
Parties
and the Federal Arbitration Act and resolved by the arbitrators. No
potential arbitrator shall be appointed unless he or she has agreed in
writing
to abide and be bound by these procedures.
Section
12.3 The
individual arbitrator or the arbitration panel shall have no power to award
non-monetary or equitable relief of any sort. The arbitrator/panel shall
also have no power to award (a) damages inconsistent with any applicable
agreement between the Parties or (b) punitive damages or any other damages
not
measured by the prevailing Party’s actual damages; and the Parties expressly
waive their right to obtain such damages in arbitration or in any other
forum. In no event, even if any other portion of these provisions is held
to be invalid or unenforceable, shall the arbitrator/panel have power to
make an
award or impose a remedy that could not be made or imposed by a court deciding
the matter in the same jurisdiction.
Section
12.4 Discovery
shall be permitted in connection with the arbitration only to the extent,
if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the Party seeking discovery.
Section
12.5 All
aspects of the arbitration shall be treated as confidential. The Parties
and the arbitrator/panel may disclose the existence, content or results
of the
arbitration only as provided in the Rules or by the Parties. Before making
any such disclosure, a Party shall give written notice to all other Parties
and
shall afford such Parties a reasonable opportunity to protect their
interests.
Section
12.6 The
result of the arbitration will be binding on the Parties, and judgment
on the
arbitration award may be entered in any court having jurisdiction. The
prevailing Party in any dispute that is resolved by this dispute resolution
process shall be entitled to recover from the other Party reasonable attorneys’
fees, costs and expenses incurred by the prevailing Party in connection
with
such dispute resolution process.
7
ARTICLE
13
Miscellaneous
Section
13.1 All
information and materials with respect to Shipper’s costs, procedures and other
details of Shipper’s business obtained by Carrier in connection with the
performance of services hereunder is confidential and shall not, without
Shipper’s prior written consent, be disclosed by Carrier, its employees, or
agents to any third person.
Section
13.2 More
than
one copy of this Agreement may be executed by the parties hereto. Each
such
executed copy shall have the full force and effect of an original executed
instrument.
Section
13.3 AUDIT:
The Carrier shall keep accurate books of account and records covering all
transactions involving the transportation services provided under this
Agreement. Shipper, or its authorized representative, shall have the right,
during normal business hours, to examine such books and records to the
extent
necessary to determine compliance with the supply of the transportation
services. All such books and records shall be kept available during the
term of
business relationship and for at least three (3) years after their
creation.
Section
13.4 Any
notice or communication required or permitted hereunder shall be given
in
writing, sent by (a) expedited delivery service with proof of delivery
or (b)
United States Mail, postage prepaid, registered or certified mail, addressed
as
follows:
If
to
Shipper: Pilgrim’s
Pride Corporation
4845
Hwy.
271 N
Pittsburg,
TX 75686
Attention:
Sarah Baker Hanna
Telephone:
903-434-1146
With
copy
to: Pilgrim’s
Pride Corporation
4845
Hwy.
271 N
Pittsburg,
TX 75686
Attention:
VP Risk Management
If
to
Carrier: Pat
Pilgrim d/b/a Pat Pilgrim Farms
1535
Loop
179
Pittsburg,
TX 75686
Telephone:
903-856-0316
Attn:
Pat
Pilgrim
or
to
such other address or to the attention of such other person as hereafter
shall
be designated in writing by the applicable party sent in accordance herewith.
Any such notice or communication shall be deemed to have been given either
at
the time of personal delivery or, in the case of delivery service or certified
or registered mail, as of the date of deposit or delivery to the United
States
Mail or expedited delivery service in the manner provided herein, or in
the case
of facsimile, upon receipt. Either party hereto may change the address
for
notice specified above by giving the other party ten (10) days advance
written
notice of such change of address.
Section
13.5 This
Agreement shall be binding upon and inure to the benefit of the parties
and
their respective heirs, legal representatives, and permitted successors
and
assigns. The rights of Carrier under the Agreement are not assignable without
the prior written consent of Shipper.
Section
13.6 This
agreement is entered into in Texas and shall be governed and construed
in
accordance with the laws of the State of Texas. If any matters in dispute
are
required to be settled by litigation, such trials will be decided by a
judge.
THE
PARTIES WAIVE TRIAL BY JURY IN ANY SUCH ACTION(S) AND CONFIRM THAT THIS
WAIVER
IS A MATERIAL INDUCEMENT TO THEIR BUSINESS TRANSACTIONS. For
any such action(s) related to their business transactions or enforcement of
any arbitration, the parties submit themselves to the jurisdiction of the
State
or Federal Courts located in Dallas, Texas.
8
Section
13.7 This
Agreement may not be modified or amended, except by an agreement in writing
signed by an approved representative of Shipper and Carrier. The parties
may
waive any of the conditions contained herein or any of the obligations
of the
other party hereunder, but any such waiver shall be effective only if in
writing
and signed by the party waiving such conditions or obligations.
Section
13.8 Each
person executing this Agreement warrants and represents that he is fully
authorized to do so.
Section
13.9 This
Agreement, including the Exhibits hereto, constitutes the entire agreement
among
the parties pertaining to the subject matter hereof and supersedes all
prior and
contemporaneous agreements and understandings of the parties in connection
therewith. No representation, warranty, covenant, agreement or condition
not
expressed in this Agreement shall be binding upon the parties hereto or
shall
affect or be effective to interpret, change or restrict the provisions
of this
Agreement.
Section
13.10 Shipper
shall not be liable in any respect for failure to tender the minimum number
of
loads set forth in Section 1.1, nor shall Carrier be liable in any respect
for
failure to transport, accept, handle or complete movement of such loads
where
such failures on part of Shipper or Carrier are caused, directly or indirectly,
by war, conditions of war, strikes, lock-outs, explosions, fires, floods,
hurricanes, cyclones, or other acts of God or casualties beyond the control
of
Shipper or Carrier. During the existence of any of these conditions, the
obligations of the parties hereunder shall be suspended for the duration
of
same. Upon cessation of the conditions enumerated, the obligations of the
parties hereunder shall resume and the term of this Agreement shall be
extended
by a period equal to the period during which such obligations were
suspended.
Section
13.11 If
any
provision of this Agreement is held to be violative of any law or regulation,
or
is unenforceable for any reason, such illegality shall not affect the remaining
portions of this Agreement, which shall remain in full force and
effect.
Section
13.12 Carrier
shall be free to accept freight for transportation from shippers other
than
Shipper, and Shipper shall be free to tender freight for transportation
to
carriers other than Carrier.
Section
13.13
Neither
Party will offer or provide to the employees, agents or other representatives
of
the other Party any favors, gratuities, gifts, payments, or anything of
value,
whether or not in an attempt to influence such person’s administration of the
provisions of this Agreement or to otherwise gain unfair advantage individually
and/or relative to competing suppliers/vendors.
Additionally,
each Party will immediately report to the other Party any requests made
for
favors, gratuities, gifts, payments or anything of value by employees,
agents or
other representatives of such Party and will cooperate with respect to
any
inquiry or investigation being conducted related to such activities or
alleged
activities. Pilgrim’s Pride has established its Pride Line with the toll-free
number of 1-888-536-1510 to report any unethical conduct.
Section
13.14 This
Agreement shall be construed as a whole in accordance with the fair and
reasonable meaning of its language, and, regardless of which party co-drafted
this Agreement, this Agreement shall not be construed in favor of or against
either party.
Section
13.15 This
Agreement constitutes the complete and entire agreement between the parties
and
supersedes any prior or contemporaneous agreements or understandings between
the
parties with respect to its subject matter. This Agreement covers and controls
the entire business relationship between the parties including any claims,
disputes or other conflicts which may arise between the parties and which
are
brought or occur after the effective date even if the events or actions
occur in
whole or in part prior to the Effective Date.
9
ARTICLE
14
Carrier’s
Cargo Liability and Claims
Section
14.1 Carrier
shall have the sole and exclusive care, custody and control of the shipments
of
cargo tendered by Shipper from the time Carrier picks up a shipment until
delivery to the customer or consignee. Carrier shall be liable to Shipper
for
actual loss and damage to shipments of cargo, and for delayed deliveries,
arising from Carrier’s performance of or failure to perform the services
required by this Agreement; provided, however, that Carrier shall not be
liable
for loss, damage, or delay to shipments caused solely by an act of God,
public
enemy, acts of war, insurrection, riot, or the negligence of Shipper or
its
customer(s), in which case Carrier has the burden of proving applicability
of
the exception. Any seals applied to trailer are not to be broken or removed
prior to delivery at destination without prior written consent from
Shipper.
Section
14.2 Carrier
shall be liable for the full, actual value of the shipments of cargo tendered
by
Shipper to Carrier. No released value rates, or other limitation of cargo
liability, shall be valid or enforceable against Shipper or its customers
unless
expressly agreed to by Shipper in a signed writing separate from any bill
of
lading or other delivery receipt issued by Carrier.
Section
14.3 Shipper
shall file a claim (i) for loss or damage to shipments within three (3)
months
from the date of delivery and (ii) for delay (or non-delivery) within three
(3)
months of the date that delivery reasonably should have been made. Within
ninety
(90) days of receiving a claim from Shipper for loss, damage, or delay,
Carrier
shall pay or deny the claim (in which case the reasons for denial shall
be fully
explained), or make a firm compromise offer.
Section
14.4 To
the
extent that any of the terms of this Agreement are inconsistent with the
Truck
Transportation Act, R.S.O. 1990, c. T.22, as amended, and the Regulations
thereto or similar provincial or territorial legislation having jurisdiction,
and/or the provisions of any bill of lading, the terms of this Agreement
shall
prevail.
ARTICLE
15
Bills
of Lading and Delivery Receipts
Section
15.1 Carrier
will issue and sign a standard, uniform straight bill of lading or other
receipt
(“Receipt”) acceptable to Shipper and Shipper’s customers upon acceptance of a
shipment of cargo for transportation. If Carrier permits the shipper to
prepare
the bill of lading, Carrier warrants that it shall ensure that the bill
of
lading properly names Carrier as the “carrier” on the load prior to signing it,
and shall strike through and correct any erroneous designation of any other
person as “carrier” (including Shipper) on the bill of lading. Any terms and
conditions written or printed on the Receipt shall have no effect against
Shipper, unless specifically agreed to by Shipper in this Agreement or
in a
separate signed writing apart from the Receipt. Carrier shall submit an
original
copy of the Receipt to Shipper evidencing delivery of the shipment of cargo
unless otherwise instructed by Shipper, in which case Carrier shall retain
custody of the Receipt and provide it to Shipper upon request.
ARTICLE
16
Factoring
Section
16.1 Carrier
shall provide Shipper thirty (30) days prior written notice of any assignment,
factoring, or other transfer of its right to receive payments arising under
this
Agreement and obtain Shipper’s written consent to such assignment, factoring, or
other transfer prior to same taking legal effect. Such written notice shall
include the name and address of assignee/transferee, date, date assignment
is to
begin, and terms of the assignment, and shall be considered delivered upon
receipt of such written notice by Shipper.
ARTICLE
17
Subcontractors
Section
17.1 Carrier
specifically agrees that it shall be the party solely responsible for operating
the equipment necessary to transport cargo under this Agreement and that
it
shall use its best efforts not to sub-contract, broker or tender to any
third
party for transportation any cargo tendered to Carrier pursuant to this
Agreement. In the event that Carrier shall employ any subcontractor or
other
person for the performance of all or any portion of the services required
hereunder to be performed by Carrier, Carrier shall be and remain liable
to
Shipper under the terms of this Agreement including, without limitation,
liability for loss, damage or delay of any shipments of cargo, whether
such
loss, damage or delay occurred while such shipment was in the possession
of
Carrier or such subcontractor or other person. Carrier shall be solely
and
exclusively responsible to pay any charges of any subcontractor or other
person.
10
ARTICLE
18
Recall
Section
18.1 In
the
event any cargo shipped hereunder is recalled pursuant to a Class I Recall
under
regulatory standards promulgated by the U.S.D.A. (“Recall”), whether initiated
by Carrier or by decision, action or order of any governmental authority
due to
the actions of Carrier, Carrier shall notify Shipper via direct telephone
prior
to the implementation of such Recall. Any Recall pursuant to this paragraph
shall be carried out in the name of Carrier, provided, however, that insofar
as
reasonably possible, Carrier shall consult with Shipper as to the necessity
for
and wording of any press release or similar public statement relating to
the
recall or recovery; and Carrier shall be responsible for all costs and
expenses
related to such Recall, including but not limited to shipping expenses.
Section
18.2 In
the
event any cargo shipped hereunder is recalled pursuant to a Class I Recall
under
regulatory standards promulgated by the U.S.D.A. (“Recall”), whether initiated
by Shipper or by decision, action or order of any governmental authority
due to
the actions of Shipper, Shipper shall notify Carrier prior to the implementation
of such Recall via direct telephone prior to the implementation of such
Recall.
Any Recall pursuant to this paragraph shall be carried out in the name
of
Shipper and Shipper shall be responsible for all costs and expenses related
to
such Recall, including but not limited to shipping expenses.
Section
18.3 Any
and
all costs and expenses of cargo inspection and/or testing required by Shipper
to
confirm compliance with this Agreement, or as a result of Recall, shall
be borne
by Carrier.
ARTICLE
19
NO
LIEN
Section
19.1 Carrier
shall have no lien, and hereby expressly waives its right to any lien on
any
cargo, freight, or property of Shipper or any of its customers, consignors
or
consignees.
EXECUTED
on the dates indicated below but effective as of the Effective Date first
above
written.
FOR
CARRIER: FOR
SHIPPER:
PAT
PILGRIM d/b/a PAT PILGRIM FARMS PILGRIM’S
PRIDE CORPORATION
By:
/s/
Pat Pilgrim
By:
/s/
Mark Lawrence
Print
Name: Pat
Pilgrim
Print
Name: Mark
Lawrence
Title:
Owner
PPF
Title:
V.P.-Risk
Management
Date:
12-28-05
Date:
1/3/06
/s/
TT
Tim
Thomas (Initials)
Sr.
V.P.-
Procurement
11
EXHIBIT
A
Carrier
will provide the following transportation services pursuant to the
Agreement:
| 1) |
Hauling
corn and soybean meal from Pittsburg to Mt. Pleasant using Vendor’s
equipment.
|
| 2) |
Hauling
corn and soybean meal from Pittsburg to Mt. Pleasant using Pilgrim’s Pride
equipment.
|
| 3) |
Hauling
flaked corn to Pilgrim’s Pride’s customers using Vendor’s
equipment.
|
| 4) |
Hauling
flaked corn to Pilgrim’s Pride customers using Pilgrim’s Pride’s
equipment.
|
| 5) |
Hauling
sacked feed to Pilgrim’s Pride’s customers using Vendor’s
equipment.
|
| 6) |
Hauling
sacked feed to Pilgrim’s Pride’s customers in Pilgrim’s Pride’s
equipment.
|
| 7) |
Any
other services requested by Shipper and agreed upon by both
Parties.
|
12
EXHIBIT
"1"
FHA
Operating Permit
13
EXHIBIT
"2"
Claim
Form
Standard
Form for Presentation of Loss and Damage Claims
Approved
by the Interstate Commerce Commission; Freight claim Division, American
Railway
Association; National Industrial Traffic League, and the National Association
of
Railway Commissioners.
|
(Name
of person to whom claim is prompted)
|
(Address
of claimant)
|
(Claimant's
Number)
|
||
|
(Name
of Carrier)
|
(Date)
|
(Carrier's
Number)
|
||
|
(Address)
|
This
claim for $
is made
against the carrier named above by Pilgrim's
Pride
for
(Name
of
Claimant)
in
connection with the following described shipments:
(Loss
or
Damage)
Description
of
shipments
Name
and
address of cosignor
(shipper)
Shipped
from : To
(City,
Town or Station) (City,
Town or Station)
Final
Destination : Routed
Via
(City,
Town or Station) (City,
Town or Station)
Bill
of
Lading issued by Co:
Date
of Bill of Lading
Paid
Freight Bill (Pro) Num ; Original
Car Number and Initial
Name
and
address of consignee (whom shipped to)
If
shipment reconsigned en route, state particulars:
DETAILED
STATEMENT SHOWING HOW AMOUNT CLAIMED IS DETERMINED
(Number
and description of articles, nature and extent of loss or damage, invoice
price
of articles, amount of claim, etc.)
Total
Amount Claimed
IN
ADDITION TO THE INFORMATION GIVEN ABOVE, THE FOLLOWING DOCUMENTS ARE
SUBMITTED
IN
SUPPORT
OF THIS CLAIM*
(
) 1. Original
bill of lading, if not previously surrendered to carrier
(
) 2. Original
paid freight (expense) bill.
(
) 3. Original
invoice or certified copy.
4. Other
particulars obtainable in proof of loss or damage claimed.
Remarks:
The
foregoing statement of facts is hereby certified to as correct: (Signature
of Claimant)
Claimant
should assign to each claim a number, inserting same in the space provided
at
the upper right hand corner of this form. Reference should be made thereto
in
all correspondence pertaining to this claim.
*
Claimants will please place (x) before such of the documents mentioned
as have
been attached, and explain under "Remarks" the absence of any of the
the
documents call for in connection with this claim. When for any reason
it is
impossible for claimant to produce original bill of lading, or paid freight
bill,
claimant
should indemnify carrier or carriers against duplicate claim, supported
by
original documents.
14
EXHIBIT "3"
PILGRIM’S
PRIDE CARRIER
MINIMUM INSURANCE REQUIREMENTS
All
Carriers providing products or services for Pilgrim's Pride Corporation
are to
have the following minimum requirements on their Certificate of Insurance.
General
Liability
General
Aggregate $2,000,000
Products/Completed
Operations $1,000,000
and/or
Professional Liability $1,000,000
(if applicable)
Each
Occurrence $1,000,000
Automobile
Liability
Combined
Single Limit $1,000,000
Workers
Compensation Statutory
Employers’
Liability
Each
Accident $100,000
Policy
Limit $500,000
Each
Employee $100,000
Pilgrim's
Pride Corporation is to be listed as an Additional
Insured on General
Liability and Auto policies.
A
30-day
notice of cancellation
is also
required. Pilgrim’s Pride Corporation reserves the right to modify these
requirements as deemed necessary for the risk presented to Pilgrim’s Pride
Corporation.
The
certificate holder address should read as follows:
Pilgrim's
Pride Corporation
Attn:
Risk Management
4845
Highway 271 North
Pittsburg,
TX 75686
***All
trucking and freight vendors are required to have Motor Truck Cargo with
a
minimum limit of $100,000***
***All
trucking and freight brokers are required to have Contingent Motor Truck
Cargo
with a minimum limit of $100,000***
15
Exhibit 10.4
GROUND
LEASE AGREEMENT
WHEREAS,
Lessor
is the record title owner of certain tracts of unimproved land in an aggregate
of one-thousand six-hundred seventy nine and one-half (1,679.5) acres situated
within the counties of Upshur, Titus and Camp in the State of Texas (as amended
by Exhibit C
attached
below). Such tracts of land shall collectively be referred to as the “Property”
hereinafter.
WHEREAS,
Lessor
desires to lease the Property to Lessee, and Lessee desires to lease the
Property from Lessor to improve the Property as Lessee requires, perform
services for Lessor and to develop the Property in accordance with the terms
of
this Lease.
NOW,
THEREFORE,
in
consideration of the covenants, conditions and agreements contained in this
Lease, Lessor and Lessee agree to the following terms and
conditions:
2.
LEASED PREMISES. Lessor
leases to Lessee and Lessee leases from Lessor for the Lease Term (as defined
hereafter), in consideration for payment of the rent, and upon the terms,
conditions and provisions set forth herein the Property, improvements thereon,
if any (the “Improvements”). The Property and the Improvements are referred to
herein collectively as the “Premises, as further described in Exhibits
A
and
B
and as
amended in the attached Exhibit C
attached
hereto and incorporated herein by reference.
Lessee
has inspected the Premises and accepts its present (as-is) condition unless
expressly noted otherwise in this Lease. Neither Lessor nor any agent has made
any express or implied warranties as to the condition of the Premises. Lessee
must satisfy itself that the Premises are physically suitable to be used as
Lessee intends by independently investigating all such matters related to the
use of the Premises. Lessee agrees that it is not relying on any warranty or
representation made by Lessor, Lessor’s agent or any broker concerning the
suitability of the Premises for the Lessee’s use.
Lessor
shall deliver possession of the Premises as of the Effective Date
hereof.
3.3
Definition.
As used
in this Lease, the word “Option” or “Options” has the following meaning: any
right or option to extend the term of this Lease.
1
3.4
Option(s)
Personal.
Each
Option granted to Lessee in this Lease is personal to Lessee and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person
or
entity other than Lessee; provided that, Lessee may freely assign, without
Lessor’s consent, any Option to any Affiliate (as defined below) of Lessee.
“Affiliate”
means,
with respect to any individual, partnership, limited liability company,
association, corporation or other entity (each, a “Person”),
any
Person that controls, is controlled by or is under common control with such
Person, together with any of its and their respective members, partners,
venturers, directors, officers, stockholders, agents, employees and spouses.
A
Person shall be presumed to have control when it possesses the power, directly
or indirectly, to direct, or cause the direction of, the management or policies
of another Person, whether through ownership of voting securities, by contract,
or otherwise.
4.1 Rent.
Subject
to adjustment, if any, Lessee agrees to pay to Lessor, without offset or
reduction, payment for the Premises, rent (“Rent”) at the initial rate of $13.00
per acre for a total annual aggregate Rent of $21,833.50. Such Rent shall be
required to be paid by Lessee to Lessor in full on or before January 6, 2006.
In
the event of an increase in Rent for any Extended Term, Lessee shall be required
to pay said increased Rent in full on or before the last day of the then
existing Lease Term.
2
4.2 Late
Payments.
In the
event Lessor fails to receive any Rent payment within ten (10) days after the
date the same is due, a late payment equal to ten percent (10%) of the annual
Rent due to Lessor shall be charged to Lessee
4.3 Additional
Consideration.
In
addition to the payment of Rent, as part of the consideration for this Lease
as
an additional rent, Lessee covenants and agrees to bear, pay and promptly
discharge as they become due and before delinquency all taxes (other than real
estate property taxes, which shall borne by Lessor), charges, license fees,
or
similar extraordinary charges due and payable because of Lessee’s leasehold
interest in the Premises. Lessee has the right in good faith to contest such
taxes, assessments, license fees or charges and is obligated to pay such
contested amount during the contest, plus any penalties and interest imposed
if
and when the amount is finally determined to be due.
All
notices or correspondence provided for herein shall be effective only if made
in
writing, personally delivered with an executed acknowledgment of receipt or
deposited in the United States mail, certified, postage prepaid, and addressed
as follows:
To
Lessor:
Pilgrim’s
Pride Corporation
4845
Highway 271 North
Pittsburg,
TX 75686
Attention:
Risk Management
To
Lessee:
Pat
Pilgrim
1535
Loop
179
Pittsburg,
TX 75686
Any
notice shall be deemed delivered five (5) days after notice is mailed or, if
personally delivered, when acknowledgment of receipt is signed, as provided
above. By written notice to the other, either party may change its own mailing
address.
6.1
Notice
by Lessor of Proposed Sale.
If
Lessor desires to sell, transfer, assign, or convey any of the Premises (each,
a
“Transfer”),
Lessor shall deliver to Lessee notice of its desire to complete such Transfer
no
less than ninety (90) days prior to the intended sale date. At such time, Lessor
will notify Lessee whether such Transfer will also result in an early lease
termination date, which may be exercised in its sole discretion or the
assumption of the Lease by the new owner. In the event the Lease is to be
terminated at Transfer, Lessor will refund to Lessee the prorata portion of
the
Rent for the remainder of the Lease Term and any and all Options for such
Premises will be cancelled.
3
| a. |
Lessee
agrees that it will at all times abide by all applicable laws and
rules of
the Environmental Protection Agency, the Texas (or other applicable
state)
Commission on Environmental Quality, the Texas (or other applicable
state)
Department of Agriculture and any other public agency concerning
the
Premises and its use, storage, and disposal of hazardous chemicals,
fuel
and/or oil. Lessee further agrees to abide by the manufacturer’s direction
in regards to its use, storage and disposal of all pesticides, herbicides
and other chemicals (if such chemicals are being stored on the
Premises).
|
| b. |
Should
Lessee fail to keep the Premises clean and free of hazards, Lessor
may,
after thirty (30) days written notice, arrange for the clean up of
the
littered or hazardous area. Such clean up shall be charged to Lessee
and
shall be due and payable within ten (10) days of receipt of Lessor’s
notice. Lessee shall not use nor permit the use of the Premises in
any
manner that will tend to create waste or a nuisance.
|
| a. |
Lessor
shall deliver the Premises to Lessee clean and free of debris (“Broom
Clean”) on the Effective Date. Lessee shall notify Lessor within thirty
(30) days of the Effective Date of any issues or items of non-compliance
related to this matter and failure to do so will be Lessee’s
acknowledgement that Lessor has effectively complied with this section
and
that such Premises are clean and free of debris.
|
| b. |
Except
as otherwise provided in this Lease, Lessee hereby accepts the Premises
in
the “as is” condition existing on the Lease Commencement Date, subject to
all applicable zoning, municipal, county and state laws, ordinances
and
regulations governing and regulating the use of the Premises, and
any
covenants or restrictions of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits
attached
hereto.
|
| a. |
Lessee
shall not, without Lessor's prior written consent, make any alterations,
improvements, additions, or Utility Installations (as defined hereafter)
in, on or about the Premises, except for nonstructural alterations
not
exceeding $50,000.00 in cumulative costs during the Lease Term and
any
Extended Term(s). In any event, whether or not in excess of $50,000.00
in
cumulative cost, Lessee shall make no change or alteration to the
exterior
of the building(s) comprising the Improvements without Lessor's prior
written consent. As used in this paragraph, the term “Utility
Installation” shall mean air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning, plumbing,
and
fencing. Lessor may require that Lessee remove any or all of said
alterations, improvements, additions or Utility Installations at
the
expiration of the Lease Term or any Extended Term(s), and restore
the
Premises to their prior condition. Should Lessee make any alterations,
improvements, additions or Utility Installations without the prior
written
approval of Lessor, Lessor may require that Lessee remove any or
all of
the same.
|
4
| b. |
Any
alterations, improvements, additions or Utility Installations in,
on, or
about the Premises that Lessee shall desire to make and which requires
the
consent of the Lessor shall be presented to Lessor in written form,
with
proposed detailed plans and specifications. If Lessor shall give
its
written consent, the consent shall be deemed conditioned upon Lessee
acquiring all applicable permits to do so from appropriate governmental
agencies, the furnishing of a copy thereof to Lessor prior to the
commencement of the work and the compliance by Lessee of all conditions
of
said permit in a prompt and expeditious manner.
|
| c. |
Lessee
shall pay, when due, all claims for labor or materials furnished
or
alleged to have been furnished to or for Lessee at or for use in
the
Premises, which claims are or may be secured by any mechanics' or
materialmen's liens against the Premises or any interest therein.
Lessee
shall give Lessor not less than ten (10) days' notice prior to the
commencement of any work in the Premises, and Lessor shall have the
right
to post notices of nonresponsibility in or on the Premises as provided
by
law. If Lessee shall, in good faith, contest the validity of any
such
lien, claim or demand, then Lessee shall, at its sole expense defend
itself and Lessor against the same and shall pay and satisfy any
such
adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, upon the condition that
if
Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested lien
claim or
demand indemnifying Lessor against liability for the same and holding
the
Premises free from the effect of such lien or claim. In addition,
Lessor
may require Lessee to pay Lessor's reasonable attorneys' fees and
costs in
participating in such action if Lessor shall decide it is in its
best
interest to do so.
|
| d. |
Unless
Lessor requires their removal, as set forth in Paragraph 8.a. of
this
Lease, all alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures
of
Lessee), which may be made on the Premises, shall become the property
of
Lessor and remain upon and be surrendered with the Premises at the
expiration of the term. Notwithstanding the provisions of this paragraph,
Lessee's machinery and equipment, other than that which is affixed
to the
Premises so that it can be removed without material damage to the
Premises, shall remain the property of Lessee and may be removed
by Lessee
subject to the provisions of Paragraph 8.a. of this Lease.
|
9.2
Lessee's
Obligation.
In
addition to the indemnification requirements as set forth below in Section
34,
Lessee
shall indemnify, defend and hold Lessor, its Affiliates, and their respective
members, partners, venturers, directors, officers, stockholders, agents,
employees, spouses, legal representatives, successors and assigns (collectively,
“Lessor
Affiliates”),
harmless from and against any loss, damage, claim, liability, and cost
(including reasonable attorneys’ fees and disbursements) arising from
(a) any default, breach or violation by Lessee under this Lease, or
(b) any negligent or other tortious act or omissions of Lessee, its
employees or agents with respect to the Premises.
5
Lessee
shall have the following minimum requirements on their Certificate of
Insurance.
General
Liability
General
Aggregate $2,000,000
Products/Completed
Operations $1,000,000
and/or
Professional Liability $1,000,000
(if applicable)
Each
Occurrence $1,000,000
Automobile
Liability
Combined
Single Limit $1,000,000
Workers
Compensation Statutory
Employers’
Liability
Each
Accident $100,000
Policy
Limit $500,000
Each
Employee $100,000
Pilgrim's
Pride Corporation is to be listed as Additional
Insured on General
Liability and Auto policies.
A
30-day
notice of cancellation
is also
required. Pilgrim's Pride Corporation reserves the right to modify these
requirements as deemed necessary for the risk presented to Pilgrim's Pride
Corporation.
The
certificate holder address should read as follows:
Pilgrim's
Pride Corporation
Attn:
Risk Management
4845
Highway 271 North
Pittsburg,
TX 75686
10.2.
Lessee shall also be required to maintain Property, Fire and Extended Coverage
Insurance in an amount equal to one hundred percent (100%) of the full
replacement value of the Improvements and in an amount sufficient to reimburse
Lessee for all of its equipment, trade fixtures, inventory, fixtures and other
personal property located on or in the Premises including leasehold improvements
hereinafter constructed or installed.
6
11.1
Total
Destruction.
If at
any time during the term of this Lease there is damage, whether or not an
insured loss, (including destruction required by any authorized public
authority), which totally destroys the Premises, or renders the Premises unfit
for the purposes set forth herein, this Lease shall automatically terminate
as
of the date of such total destruction; provided, that, Lessee shall have the
right within ten (10) days after the receipt of such notice to give written
notice to Lessor of Lessee's intention to repair such damage at Lessee's
expense, without reimbursement from Lessor, in which event this Lease shall
continue in full force and effect, and Lessee shall proceed to make such repairs
as soon as reasonably possible. If Lessee does not give such notice within
such
ten (10) day period this Lease shall be canceled and terminated as of the date
of the occurrence of such damage.
11.2
Termination,
Advance Payments.
Upon
termination of this Lease pursuant to this paragraph, an equitable adjustment
shall be made concerning advance rent and any advance payments made by Lessee
to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.
7
13.
SERVICES,
UTILITIES.
Services and utilities shall be furnished and the cost borne by Lessee. If
any
such services are not separately metered to Lessee, Lessee shall pay a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises. In the event of failure by Lessor to furnish, in a
satisfactory manner, any of the services and utilities to the Premises for
which
Lessor is responsible, if any, Lessee may furnish the same if Lessor has not
undertaken to correct such failure within five (5) days after written notice,
and, in addition to any other remedy Lessee may have, may deduct the amount
thereof, from Monthly Rent.
14.2
Assignment
and Subletting. Lessee
shall not voluntarily or by operation of law assign, transfer, mortgage, sublet,
or otherwise transfer or encumber all or any part of Lessee's interest in this
Lease or in the Premises, without Lessor's prior written consent, which consent
may be withheld, delayed or conditioned, in Lessor’s sole determination. Lessor
shall respond to Lessee's request for consent hereunder in a timely manner
and
any attempted assignment, transfer, mortgage, encumbrance or subletting without
such consent shall be void, and shall constitute a breach of this Lease.
| a. |
The
vacating or abandonment of the Premises by Lessee.
|
| b. |
The
failure by Lessee to make any payment of Rent as set forth
herein
|
| c. |
The
failure by Lessee to observe or perform any of the covenants, conditions
or provisions of this Lease to be observed or performed by Lessee,
other
than described in paragraph (b) above, where such failure shall continue
for a period of thirty (30) days after written notice thereof from
Lessor
to Lessee; provided, however, that if the nature of Lessee's default
is
such that more than thirty (30) days are reasonably required for
its cure,
then Lessee shall not be deemed to be in default if Lessee commenced
such
cure within said 30-day period and thereafter diligently prosecutes
such
cure to completion.
|
8
| d. |
The
making by Lessee of (i) any general arrangement or assignment for
the
benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11
U.S.C. 101 or any successor statute thereto (unless, in the case
of a
petition filed against Lessee, the same is dismissed within sixty
(60)
days); (iii) the appointment of a trustee or receiver to take possession
of substantially all of Lessee's assets located at the Premises or
of
Lessee's interest in this Lease, where possession is not restored
to
Lessee within thirty (30) days; or (iv) the attachment, execution
or other
judicial seizure of substantially all of Lessee's assets located
at the
Premises or of Lessee's interest in this Lease, where such seizure
is not
discharged within thirty (30) days. Provided, however, in the event
that
any provision of this paragraph is contrary to any applicable law,
such
provision shall be of no force or effect.
|
| e. |
The
discovery by Lessor that any financial statement given to Lessor
by
Lessee, any assignee of Lessee, any sub Lessee of Lessee, any successor
in
interest of Lessee or any guarantor of Lessee's obligation hereunder,
and
any of them, was materially false.
|
| a. |
Terminate
Lessee's right to possession of the Premises by any lawful means,
in which
case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor. In such event Lessor shall
be
entitled to recover from Lessee all damages incurred by Lessor by
reason
of Lessee's default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, and reasonable attorneys'
fees;
the worth at the time of award by the court having jurisdiction thereof
of
the amount by which the unpaid rent for the balance of the term after
the
time of such award exceeds the amount of such rental loss for the
same
period that Lessee proves could be reasonably avoided.
|
| b. |
Maintain
Lessee's right to possession in which case this Lease shall continue
in
effect whether or not Lessee shall have abandoned the Premises. In
such
event Lessor shall be entitled to enforce all of Lessor's rights
and
remedies under this Lease, including the right to recover the rent
as it
becomes due hereunder.
|
| c. |
Pursue
any other right or remedy now or hereafter available to Lessor under
the
laws or judicial decisions of the State of Texas. Unpaid installments
of
Monthly Rent and other unpaid monetary obligations of Lessee under
the
terms of this Lease shall bear interest from the date due at the
maximum
rate then allowable by law.
|
9
16.
CONDEMNATION.
If the
Premises or any portion thereof are taken under the power of eminent domain,
or
sold under the threat of the exercise of said power (all of which are herein
called “condemnation”), this Lease shall terminate as to the part so taken as of
the date the condemning authority takes title or possession, whichever first
occurs. If a portion of the land area of the Premises or the building of the
Premises is taken by condemnation, and such taking renders the Premises
substantially or entirely unfit for use as set forth herein, in Lessee’s
reasonable discretion, Lessee may, at Lessee's option, to be exercised in
writing only within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority shall have taken possession) terminate this
Lease
as of the date the condemning authority takes such possession. If Lessee does
not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,
except that the rent shall be reduced in the proportion that the floor area
of
the building taken bears to the total floor area of the building situated on
the
Premises. No reduction of rent shall occur if the only area taken is that which
does not have a building located thereon. Any award for the taking of all or
any
part of the Premises under the power of eminent domain or any payment made
under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss of or damage to
Lessee's trade fixtures and removable personal property. If this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
severance damages received by Lessor in connection with such condemnation,
repair any damage to the Premises caused by such condemnation except to the
extent that Lessee has been reimbursed therefor by the condemning authority.
Lessee shall pay any amount in excess of such severance damages required to
complete such repair.
| a. |
Lessee
and Lessor shall at any time and from time to time upon not less
than ten
(10) days' prior written notice from the other party, execute, acknowledge
and deliver to the requesting party a statement written on Lessor's
estoppel certificate form reasonably acceptable to Lessor and Lessee
(i)
certifying that this Lease is unmodified and in full force and effect
(or,
if modified, stating the nature of such modification and certifying
that
this Lease, as so modified, is in full force and effect) and the
date to
which the rent and other charges are paid in advance, if any, and
(ii)
acknowledging that there are not, to the knowledge of the party being
requested to deliver the statement, any uncured defaults on the part
of
requesting party, or specifying such defaults if any are claimed.
Any such
statement may be conclusively relied upon by any prospective purchaser
or
encumbrancer of the Premises, or any prospective assignee or sub
Lessee.
|
| b. |
If
Lessor desires to finance, refinance, or sell the Premises, or any
part
thereof, Lessee hereby agrees to deliver to any lender or purchaser
designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements
shall
include the past three (3) years' financial statements of Lessee.
All such
financial statements shall be received by Lessor and such lender
or
purchaser in confidence and shall be used only for the purposes herein
set
forth.
|
10
22.
WAIVERS.
No
waiver by Lessor or any provision hereof shall be deemed a waiver of any other
provision hereof or of any subsequent breach by Lessee of the same or any other
provision. Lessor's consent to, or approval of, any act shall not be deemed
to
render unnecessary the obtaining of Lessor's consent to or approval of any
subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall
not
be a waiver of any preceding breach by Lessee of any provision hereof, other
than the failure of Lessee to pay the particular rent so accepted, regardless
of
Lessor's knowledge of such preceding breach at the time of acceptance of such
rent.
| a. |
This
Lease, at Lessor's option, shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation or security now
or
hereafter placed upon the real property of which the Premises are
a part
and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding such subordination, Lessee's right to quiet
possession of the Premises shall not be disturbed if Lessee is not
in
default and so long as Lessee shall pay the rent and observe and
perform
all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee, trustee or ground
lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof
to
Lessee, this Lease shall be deemed prior to such mortgage, deed of
trust,
or ground lease, whether this Lease is dated prior or subsequent
to the
date of said mortgage, deed of trust, or ground lease, or the date
of
recording thereof.
|
11
| b. |
Lessee
agrees to execute any reasonable documents required to effectuate
an
attornment, a subordination or to make this Lease prior to the lien
of any
mortgage, deed of trust or ground lease, as the case may be.
|
30.
MERGER.
The
voluntary or other surrender of this Lease by Lessee, or a mutual cancellation
thereof, or a termination by Lessor, shall not work a merger, and shall, at
the
option of Lessor, terminate all or any existing subtenancies or may, at the
option of Lessor, operate as an assignment to Lessor of any or all of such
subtenancies.
32.
EASEMENTS.
Lessor
reserves to itself the right, from time to time, to grant such easements, rights
and dedications that Lessor deems necessary or desirable, and to cause the
recordation of plats and restrictions, so long as such easements, rights,
dedications, plats and restrictions do not unreasonably interfere with the
use
of the Premises by Lessee. Lessee shall sign any of the aforementioned documents
upon request of Lessor and failure to do so shall constitute a material breach
of this Lease.
33.
AUTHORITY.
If
Lessee is a corporation, trust, or general or limited partnership, each
individual executing this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this Lease on behalf
of
said entity. If Lessee is a corporation, trust or partnership, Lessee shall,
within thirty (30) days after execution of this Lease, deliver to Lessor
evidence of such authority satisfactory to Lessor.
12
34.
EMISSIONS; STORAGE, USE AND DISPOSAL OF MATTER.
| a. |
The
term “Hazardous Material” shall mean include, but shall not be limited to
(i) any material, substance or waste which is or hereafter shall
be
listed, regulated or defined by Applicable Law to be hazardous, acutely
hazardous, extremely hazardous, radioactive toxic, or dangerous;
(ii)
asbestos or asbestos-containing materials; (iii) polychlorinated
biphenyls
(PCBs); (iv) radon gas; (v) laboratory wastes; (vi) experimental
products,
including genetically engineered microbes; and (vii) petroleum, natural
gas, or other petroleum product.
|
| b. |
The
term “Applicable Law” shall include federal, state and local statutes,
regulations, rules, ordinances, and all other governmental requirements.
|
| a. |
Lessee
shall comply with Applicable Law in all respects, including, but
not
limited to, (i) acquisition of and compliance with all permits, licenses,
orders, requirements, approvals, plans and authorizations which are
or may
become necessary for conduct of Lessee's operations on the Premises;
(ii)
compliance with all regulatory requirements relating to such operations
or
the substances and equipment used therein or the emissions, emanations
and
wastes generated thereby; and (iii) reporting, investigation, and
remediation of, or other response to the exposure or potential exposure,
of any person to, or the emission, discharge or other release of
any
Hazardous Material into the Premises or the environment.
|
| b. |
Lessee
shall promptly respond to and remedy (by removal and proper disposal
or
such other methods as shall be reasonably required) to the satisfaction
of
applicable governmental agencies any release or discharge of any
Hazardous
Material connected with Lessee's operation or Lessee's presence on
the
Premises. All such action shall be done in Lessee's name, and at
Lessee's
sole cost and expense. For purposes of this paragraph (b), the term
“respond” shall include, but not be limited to, the investigation of
environmental conditions, the preparation of feasibility reports
or
remedial plans, and the performance of any cleanup, remediation,
containment, maintenance, monitoring or restoration work. Any such
actions
shall be performed in a good, safe, workmanlike manner and shall
minimize
any impact on the businesses or operations conducted at the Premises.
In
its discretion, Lessor may, but shall not be required to, enter the
Premises personally or through its agents, consultants or contractors
and
perform all or any part of the response activity or remedial action
which
it feels is reasonably necessary to comply with the terms of this
Lease,
and shall be reimbursed for its costs thereof and for any liabilities
resulting therefrom.
|
| c. |
Lessee
will promptly notify Lessor of Lessee's receipt of any notice, request,
demand, inquiry or order, whether oral or written, from any government
agency or any other individual or entity relating in any way to the
presence or possible presence of any Hazardous Material on, in, under
or
near the Premises or the Lessee's compliance with, or failure to
comply
with, Applicable Law. Receipt of such notice shall not be deemed
to create
any obligation on the part of Lessor to defend or otherwise respond
to any
such notification.
|
| d. |
Promptly
upon discovery thereof, Lessee will notify Lessor of the discovery
of any
release, discharge, or emission of any Hazardous Material or of the
existence of any other condition or occurrence which may constitute
or
pose a significant presence or potential hazard to human health and
safety
or to the environment, whether or not such event or discovery necessitates
any report to any other person or government agency.
|
13
| a. |
Permit
any vehicle on the Premises to emit exhaust which is in violation
of any
Applicable Law;
|
| b. |
Create,
or permit to be created, any sound pressure level which will interfere
with the quiet enjoyment of any real property adjacent to the Premises,
or
which will create a nuisance or violate any Applicable Law;
|
| c. |
Transmit,
receive, or permit to be transmitted or received, any electromagnetic,
microwave or other radiation which is harmful or hazardous to any
person
or property in, on or about the Premises, or anywhere else, or which
interferes with the operation of any electrical, electronic, telephonic
or
other equipment wherever located, whether on the Premises or anywhere
else;
|
| d. |
Create,
or permit to be created, any ground or building vibration that is
discernible outside the Premises; and
|
| e. |
Produce,
or permit to be produced, any intense glare, light or heat except
within
an enclosed or screened area and then only in such manner that the
glare,
light or heat shall not be discernible outside the Premises.
|
as
a
result of a breach by Lessee of any of its covenants, representations or
warranties under this paragraph 34. This obligation shall not apply, if and
to
the extent that (a) such claims, damages, expenses, encumbrances, fees, fines,
penalties, or costs arose solely out of conditions existing on the Premises
prior to the commencement of Lessee's first possession of the Premises or
conditions created on the Premises after Lessee ceases to occupy the Premises;
and (b) Lessee did not violate any Applicable Law or act negligently with
respect to, or otherwise contribute to, the condition or the hazard posed by
the
condition.
14
34.6
Disposal
of Other Matter.
| a. |
Refuse
Disposal. Lessee shall not keep any trash, garbage, waste or other
refuse
on the Premises except in sanitary containers and shall regularly
and
frequently remove and dispose of the same from the Premises. Lessee
shall
keep all incinerators, containers or other equipment used for storage
or
disposal of such matter in a clean and sanitary condition, and shall
promptly dispose of all other waste.
|
| b. |
Sewage
Disposal. Lessee shall properly dispose of all sanitary sewage and
shall
not use the sewage disposal system (i) for the disposal of anything
except
sanitary sewage, or (ii) in excess of the lesser of the amount allowed
by
the sewage treatment works, or permitted by any governmental entity.
Lessee shall keep the sewage disposal system free of all obstructions
and
in good operating condition.
|
If
a
dispute arises from or relates to transactions between the Parties, the Parties
shall endeavor to settle the dispute first through direct discussions and
negotiations. If the dispute cannot be settled through direct discussions,
the
Parties shall endeavor to settle the dispute by mediation under the Mediation
Rules of the American Arbitration Association before recourse to the arbitration
procedures contained in this Agreement. If a dispute has not been resolved
within 90 days after the written notice beginning the mediation process (or
a
longer period, if the Parties agree to extend the mediation), the mediation
shall terminate and the dispute shall be settled by binding arbitration in
Dallas, Texas or such other location as agreed upon by the Parties. The
arbitration will be conducted in accordance with the procedures in this document
and the Rules of the American Arbitration Association in effect on the date
of
the engagement letter, or such other rules and procedures as the Parties may
designate by mutual agreement. In the event of a conflict, the provisions
of this document will control.
The
arbitration shall be conducted by a single arbitrator as agreed upon by the
Parties. If the Parties cannot agree on a single arbitrator, the arbitration
will be conducted before a panel of three arbitrators, one selected by each
Party and the third arbitrator selected by the Parties’ two arbitrators from a
panel provided by the American Arbitration Association. Any issue
concerning the extent to which any dispute is subject to arbitration, or
concerning the applicability, interpretation, or enforceability of these
procedures, including any contention that all or part of these procedures are
invalid or unenforceable, shall be governed by the agreement between the Parties
and the Federal Arbitration Act and resolved by the arbitrators. No
potential arbitrator shall be appointed unless he or she has agreed in writing
to abide and be bound by these procedures.
The
individual arbitrator or the arbitration panel shall have no power to award
non-monetary or equitable relief of any sort. The arbitrator/panel shall
also have no power to award (a) damages inconsistent with any applicable
agreement between the Parties or (b) punitive damages or any other damages
not
measured by the prevailing Party’s actual damages; and the Parties expressly
waive their right to obtain such damages in arbitration or in any other
forum. In no event, even if any other portion of these provisions is held
to be invalid or unenforceable, shall the arbitrator/panel have power to make
an
award or impose a remedy that could not be made or imposed by a court deciding
the matter in the same jurisdiction.
Discovery
shall be permitted in connection with the arbitration only to the extent, if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the Party seeking discovery.
All
aspects of the arbitration shall be treated as confidential. The Parties
and the arbitrator/panel may disclose the existence, content or results of
the
arbitration only as provided in the Rules or by the Parties. Before making
any such disclosure, a Party shall give written notice to all other Parties
and
shall afford such Parties a reasonable opportunity to protect their
interests.
15
The
result of the arbitration will be binding on the Parties, and judgment on the
arbitration award may be entered in any court having jurisdiction. The
prevailing Party in any dispute that is resolved by this dispute resolution
process shall be entitled to recover from the other Party reasonable attorneys’
fees, costs and expenses incurred by the prevailing Party in connection with
such dispute resolution process.
The
parties hereto have executed this Lease as of the date first above set
forth.
LESSOR: PILGRIM’S
PRIDE CORPORATION
By:
/s/
Richard A. Cogdill
Name:
Title:
LESSEE: PAT
PILGRIM d/b/a PAT PILGRIM FARMS
By:
/s/
Pat Pilgrim
Name:
Pat
Pilgrim
Title:
Owner
16
Exhibit
A
CAMP.
TEXAS
Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF ACREAGE
PROGRAM
YEAR
2005
DATE:
11-17-2005
"A"
Producer
Name and Address ID
PATRICK
W
PILGRIM 9599
1535
LOOP
179
PITTSBURG,
TX 75686-3503
|
NOTE: The
following statements are made in accordance with the Privacy
Act of 1974(5
USC 552a). The Agricultural Adjustment Act of 1938, as amended,
and the
Agricultural Act of 1949, as amended, authorized the collection
of the
following data. The data will be used to determine eligibility
for
assistance. Furnishing the data is voluntary, however, without
it
assistance cannot be provided. The data may be furnished to
any agency
responsible for enforcing the provisions of the Acts.
|
||||||||||||||||
|
Public
reporting burden for this collection of information is estimated
to
average 15 minutes per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining
the data needed, and completing and reviewing the collection
of
information. Send comments regarding this burden estimate,
or any other
aspect of this collection of information, including suggestions
for
reducing this burden, to the Department of Agriculture, Clearance
Officer,
Ag Box 7630, Washington, D.C. 20250, and to the Office of Management
and
Budget. Paperwork Reduction Project (OMB No. 0560-0004). Washington,
D.C.
20503. RETURN THIS COMPLETED FORM TO YOUR FSA COUNTY
OFFICE.
|
||||||||||||||||
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
|
136
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
678
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
9.00
|
Y
|
03-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
24.00
|
Y
|
03-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1C
|
Ni
|
FALOW
|
I
|
A
|
49.00
|
Y
|
03-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
678
|
E-5
(A2)
|
||||||||||||||
|
Cropland:
|
82.0
|
Farmland:
|
102.0
|
|||||||||||||
|
150
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
671
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
60.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
5.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
671
|
E-5
(A2)
|
||||||||||||||
|
Cropland:
|
65.0
|
Farmland:
|
119.0
|
|||||||||||||
|
165
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
670
|
1A
|
Ni
|
FALOW
|
I
|
A
|
14.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
Photo
Number/Legal Descriptions:
|
670
|
E-4
(B2)
|
||||||||||||||
|
Cropland:
|
14.0
|
Farmland:
|
29.0
|
|||||||||||||
|
206
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
674
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
28.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
20.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
674
|
E-5
(A2)
|
||||||||||||||
|
Cropland:
|
48.0
|
Farmland:
|
62.0
|
|||||||||||||
|
381
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
713
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
14.40
|
Y
|
03-11-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
1
CAMP.
TEXAS &#
160;
Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF ACREAGE
PROGRAM
YEAR
2005
DATE:
11-17-2005
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
|
1B
|
Ni
|
FALOW
|
I
|
A
|
10.60
|
Y
|
03-11-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
713
|
D-7
(B1)
|
||||||||||||||
|
Cropland:
|
25.0
|
Farmland:
|
40.0
|
|||||||||||||
|
483
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1251
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
8.40
|
Y
|
03-23-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
28.90
|
Y
|
03-23-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
1251
|
F-4
(B1)
|
||||||||||||||
|
Cropland:
|
37.3
|
Farmland:
|
54.0
|
|||||||||||||
|
700
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1387
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
13.50
|
Y
|
03-25-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
11.50
|
Y
|
03-25-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
1387
|
F-7
(2A) (2B)
|
||||||||||||||
|
Cropland:
|
25.0
|
Farmland:
|
26.0
|
|||||||||||||
|
837
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
846
|
1A
|
Ni
|
FALOW
|
I
|
A
|
40.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
Photo
Number/Legal Descriptions:
|
846
|
G-2
(1A)
|
||||||||||||||
|
Cropland:
|
40.0
|
Farmland:
|
120.0
|
|||||||||||||
|
1010
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1152
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
13.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
13.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1C
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
2.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1D
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
5.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1E
|
Ni
|
FALOW
|
I
|
A
|
44.40
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
1152
|
I-6(1A)(1B)
|
||||||||||||||
|
Cropland:
|
77.4
|
Farmland:
|
217.0
|
|||||||||||||
|
1012
|
0
|
Ni
|
OFAV
|
A
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||
|
1139
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
75.40
|
Y
|
03-03-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
Photo
Number/Legal Descriptions:
|
1139
|
H-6(2A)
|
||||||||||||||
|
Cropland:
|
75.4
|
Farmland:
|
114..0
|
|||||||||||||
|
1092
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
2
CAMP.
TEXAS Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF
ACREAGE PROGRAM
YEAR 2005
DATE:
11-17-2005
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
|
1092
|
1545
|
1A
|
Ni
|
FALOW
|
I
|
A
|
300.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
Photo
Number/Legal Descriptions:
|
1545
|
G-2
(1B) (2B)
|
||||||||||||||
|
Cropland:
|
300.0
|
Farmland:
|
605.0
|
|||||||||||||
|
1104
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1144
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
60.30
|
Y
|
03-03-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
Photo
Number/Legal Descriptions:
|
1144
|
H-6(2A)
|
||||||||||||||
|
Cropland:
|
60.3
|
Farmland:
|
65.0
|
|||||||||||||
|
1151
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1528
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
120.00
|
Y
|
03-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
4.90
|
Y
|
03-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
1528
|
F-4
(B1)
|
||||||||||||||
|
Cropland:
|
124.9
|
Farmland:
|
190.0
|
|||||||||||||
|
1736
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
188
|
1A
|
Ni
|
FALOW
|
I
|
A
|
20.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
303
|
1A
|
Ni
|
FALOW
|
I
|
A
|
47.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
848
|
1A
|
Ni
|
FALOW
|
I
|
A
|
56.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
Photo
Number/Legal Descriptions:
|
188
303
848
|
B-5
(A1)(B1)
C-4
(A1) (B1)
G-2
(1A) (2A)
|
||||||||||||||
|
Cropland:
|
123.0
|
Farmland:
|
314.0
|
|||||||||||||
|
1761
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
676
|
1A
|
Ni
|
FALOW
|
I
|
A
|
15.90
|
Y
|
03-12-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
1286
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
34.60
|
Y
|
03-12-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
2
|
Ni
|
GRASS
|
BCS
|
Forage
|
I
|
A
|
23.20
|
Y
|
06-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
3A
|
Ni
|
FALOW
|
I
|
A
|
12.20
|
Y
|
03-12-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
676
1286
|
E-5
(A1)
F-5
(B1)
|
||||||||||||||
|
Cropland:
|
85.9
|
Farmland:
|
179.0
|
|||||||||||||
|
1856
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1913
|
1A
|
Ni
|
GRASS
|
BCS
|
Forage
|
I
|
A
|
58.0
|
Y
|
06-21-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
Photo
Number/Legal Descriptions:
|
1913
|
F-4
(A1) (A2)
|
||||||||||||||
3
CAMP.
TEXAS Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF
ACREAGE PROGRAM
YEAR 2005
DATE:
11-17-2005
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
|
Cropland:
|
58.0
|
Farmland:
|
61.0
|
|||||||||||||
|
1919
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1271
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
24.30
|
Y
|
03-19-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
2
|
Ni
|
FALOW
|
I
|
A
|
75.70
|
Y
|
03-19-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
Photo
Number/Legal Descriptions:
|
1271
|
F-5
(A1) (A2)
|
||||||||||||||
|
Cropland:
|
100.0
|
Farmland:
|
138.0
|
|||||||||||||
|
2020
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1055
|
1
|
Ni
|
FALOW
|
I
|
A
|
6.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
1056
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
23.00
|
Y
|
03-27-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
2
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
15.50
|
Y
|
03-27-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
3
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
73.00
|
Y
|
03-27-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1174
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
23.40
|
Y
|
03-11-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
2A
|
Ni
|
FALOW
|
I
|
A
|
51.60
|
Y
|
03-11-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
1684
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
15.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
2
|
Ni
|
FALOW
|
YEL
|
Grain
|
I
|
A
|
22.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
3A
|
Ni
|
FALOW
|
I
|
A
|
37.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||
|
4
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
11.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
5
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
60.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
7
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
26.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
6
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
14.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||
|
1685
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
9.50
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||
|
1686
|
1
|
Ni
|
FALOW
|
I
|
A
|
11.00
|
Y
|
03-09-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
Photo
Number/Legal Descriptions:
|
1055
1056
1174
1684
1685
1686
|
F-5
(A1)
F-7
(2A) (2B)
H-7
(1A)(2A)
G-7
(1A)(2A)(1B)(2B)
G-7
(1A)(2A)
G-7
(1A)(2A)
|
||||||||||||||
|
Cropland:
|
398.0
|
Farmland:
|
810.0
|
|||||||||||||
|
2040
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
|
1616
|
1
|
Ni
|
FALOW
|
I
|
A
|
30.00
|
Y
|
03-26-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||
|
Photo
Number/Legal Descriptions:
|
1616
|
D-7
(A1) (A2)
|
||||||||||||||
|
Cropland:
|
30.0
|
Farmland:
|
80.0
|
|||||||||||||
|
2104
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||
4
CAMP.
TEXAS Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF
ACREAGE PROGRAM
YEAR 2005
DATE:
11-17-2005
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
||||||||||||||
|
2104
|
706
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
26.70
|
Y
|
03-17-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||
|
2
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
53.00
|
Y
|
03-17-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||
|
4
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
23.00
|
Y
|
03-17-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||
|
3A
|
Ni
|
FALOW
|
I
|
A
|
160.70
|
Y
|
03-17-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||||
|
1043
|
1
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
20.00
|
Y
|
03-19-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||||||||||
|
2
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
13.00
|
Y
|
03-19-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||
|
1135
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
300.00
|
Y
|
03-05-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||||||||||
|
2073
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
300.00
|
Y
|
03-08-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||||||||||
|
1B
|
Ni
|
FALOW
|
I
|
A
|
11.60
|
Y
|
03-08-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||||
|
2074
|
1A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
50.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||||||||||
|
1B
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
50.00
|
Y
|
03-10-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||
|
Photo
Number/Legal Descriptions:
|
706
1043
1135
2073
2074
|
D-7
(2A) (2B)
G-7
(1A) (2A)
H-5(1B)(2B)
H-6(2A)
D7/1A
D7
|
||||||||||||||||||||||||||||
|
Cropland:
|
1068.6
|
Farmland:
|
1839.9
|
|||||||||||||||||||||||||||
|
C/C
CORN
|
Type
YEL
|
Prac
N
|
IU
GR
|
Reported
1.633.00
|
Determined
|
C/C
Type
FALOW
|
Prac
N
|
IU
|
Reported
1.063.00
|
Determined
|
C/C
GRASS
|
Type
BCS
|
Prac
N
|
IU
FG
|
Reported
81.20
|
Determi
|
||||||||||||||
|
PRODUCER'S
CERTIFICATION: I certify to the best of my knowledge and belief
that the
acreage of crops and land uses listed herein are true and correct,
and
that all required crops and land uses have been reported for
the farm as
applicable. The signing of this form gives FSA representatives
authorization to enter and inspect crops and land uses on the
above
identified land.
|
||||||||||||||||||||||||||||||
|
Producer's
Signature
|
Date
|
|||||||||||||||||||||||||||||
|
This
program or activity will be conducted on a nondiscriminatory
basis without
regard to race, color, religion, national origin, sex, age,
marital
status, or disability.
|
||||||||||||||||||||||||||||||
5
Exhibit
B
TITUS.
TEXAS
Form
Approved - OMB No. 0560-0004
FSA-578
(Producer Print) REPORT
OF
ACREAGE
PROGRAM
YEAR 2005
&
#160; DATE:
11-17-2005
&#
160; "B"
Producer
Name and Address ID
PATRICK
W
PILGRIM 9599
1535
LOOP
179
PITTSBURG,
TX 75686-3503
|
NOTE: The
following statements are made in accordance with the Privacy Act
of 1974(5
USC 552a). The Agricultural Adjustment Act of 1938, as amended,
and the
Agricultural Act of 1949, as amended, authorized the collection
of the
following data. The data will be used to determine eligibility
for
assistance. Furnishing the data is voluntary, however, without
it
assistance cannot be provided. The data may be furnished to any
agency
responsible for enforcing the provisions of the Acts.
|
|||||||||||||||||||||||||||||
|
Public
reporting burden for this collection of information is estimated
to
average 15 minutes per response, including the time for reviewing
instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of
information. Send comments regarding this burden estimate, or any
other
aspect of this collection of information, including suggestions
for
reducing this burden, to the Department of Agriculture, Clearance
Officer,
Ag Box 7630, Washington, D.C. 20250, and to the Office of Management
and
Budget. Paperwork Reduction Project (OMB No. 0560-0004). Washington,
D.C.
20503. RETURN THIS COMPLETED FORM TO YOUR FSA COUNTY
OFFICE.
|
|||||||||||||||||||||||||||||
|
Farm
Number
|
Tract
Number
|
CLU/
Field
|
Ir
Pr
|
C/C
|
Var/
Type
|
Int
Use
|
C/C
Stat
|
Rpt
Unt
|
Reported
Quantity
|
Determined
Quantity
|
Crp
Lnd
|
Planting
Date
|
Prod
Share
|
Prod
Name
|
RMA
Unt
|
Dpt
Unt
|
|||||||||||||
|
2281
|
0
|
Ni
|
OFAV
|
.00
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||||||||
|
2390
|
2A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
92.50
|
Y
|
03-27-2005
|
1.0000
|
PATRICK
W PILGRIM
|
|||||||||||||||||
|
3A
|
Ni
|
CORN
|
YEL
|
Grain
|
I
|
A
|
64.00
|
Y
|
03-27-2005
|
1.0000
|
PATRICK
W PILGRIM
|
||||||||||||||||||
|
Photo
Number/Legal Descriptions:
|
2390
|
G12/2B
|
|||||||||||||||||||||||||||
|
Cropland:
|
156.5
|
Farmland:
|
400.0
|
||||||||||||||||||||||||||
|
C/C
CORN
|
Type
YEL
|
Prac
N
|
IU
GR
|
Reported
156.50
|
Determined
|
||||||||||||||||||||||||
|
PRODUCER'S
CERTIFICATION: I certify to the best of my knowledge and belief
that the
acreage of crops and land uses listed herein are true and correct,
and
that all required crops and land uses have been reported for the
farm as
applicable. The signing of this form gives FSA representatives
authorization to enter and inspect crops and land uses on the above
identified land.
|
|||||||||||||||||||||||||||||
|
Producer's
Signature
|
Date
|
||||||||||||||||||||||||||||
|
This
program or activity will be conducted on a nondiscriminatory basis
without
regard to race, color, religion, national origin, sex, age, marital
status, or disability.
|
|||||||||||||||||||||||||||||
Exhibit
C
This
Exhibit C hereby amends that certain Ground Lease Agreement entered into by
and
between Lessor and Lessee on December 28, 2005 (“Original Lease”). The terms of
this Lease shall supersede any and all terms as set forth in the Original Lease.
Pursuant
to the Original Lease, Lessee leased from Lessor a total of 1,789.5 acres at
$13.00 per acre. Pursuant to this Lease, the acreage leased by Lessee from
Lessor shall be reduced to 1,679.5 acres at $13.00 per acre as
follows:
Original
Total Acreage leased by Lessee (as set forth in Exhibits A & B):
1,789.5
acres
Less:
thirty (30) acres from “Farm 30”
Less
thirty (30) acres from “LTD”
Less
fifty (50) acres from Lessee’s currently-owned farm
Equals:
1,679.5
acres (Amended Total Acreage leased by Lessee)
Exhibit
99.1
PILGRIM’S
PRIDE CORPORATION
REVISES
FIRST FISCAL QUARTER EARNINGS GUIDANCE
ANNOUNCES
FURTHER RESTRUCTURING OF
FRANCONIA,
PA TURKEY OPERATIONS
ANNOUNCES
FIRST FISCAL QUARTER’S CONFERENCE CALL FOR
JANUARY
23, 2006
PITTSBURG,
Texas — January 3, 2006—Pilgrim’s Pride Corporation (NYSE: PPC) today announced
that it is lowering its previously issued earnings guidance for its first
quarter of fiscal 2006 to a range of $0.36 to $0.41 per share, which excludes
charges associated with the further restructuring of its Turkey operations
and
certain one time tax benefits in the Company’s Mexico operations, which amounts
have not been fully determined at this time, however, we currently do not
expect
the net of these two items to be material, versus the $0.75 to $0.85 per
share
range previously communicated by the Company. The results for the quarter
are
expected to be less than previously forecasted due primarily to a significantly
worse than expected performance in the Company’s Mexico operations and lower
sales prices realized during the quarter on chicken leg quarters in its U.S.
operations.
“We
are
extremely disappointed with the results realized this quarter by our Mexico
operations,” stated Mr. O.B. Goolsby, President and Chief Executive Officer of
Pilgrim’s Pride Corporation. “After turning in a record performance last fiscal
year, the turn about we saw this quarter was significant as sales momentum
during the Christmas holiday season in Mexico failed to live up to expectations
and last year’s performance. Additionally, our U.S. operations were negatively
impacted by sharp declines in the selling price for chicken leg quarters,
which
declined from an average selling price of $0.45 per pound in the fourth fiscal
quarter of 2005 to approximately $0.29 per pound in the first fiscal quarter
of
2006. We attribute this drop in selling price primarily to the effects focus
and
concern over avian influenza has had on international demand for poultry
products and to the disruptions caused by having to reroute product in transit
to locations other than those intended as these concerns materialized.”
Turkey
Division Restructuring
“Today
we
also are announcing plans to further restructure our turkey business by ceasing
the production of ground turkey and cooked turkey deli breast meat items
at our
Franconia, PA further processing plant effective March 3, 2006. After this
time,
this facility will focus strictly on the Company’s profitable refrigerated
salads line and our Turkey operations will be limited to fresh and frozen
whole
turkeys, produced in New Oxford, PA.” Goolsby added.
“The
restructuring is expected to have a positive impact on annualized pre-tax
earnings of approximately $10 - $15 million per year, reduce working capital
employed in the Franconia plant by approximately $13 million and will result
in
a reduction in workforce of approximately 300
employees.”
The
Company is also withdrawing its previously issued guidance for the rest of
fiscal 2006, which is not being updated at this time but intends to update
such
guidance during a conference call to discuss the Company's first quarter
of
fiscal 2006 financial results which will be held at 10:00 a.m. CDT (11:00
a.m.
EDT) on January 23, 2006. To listen live via telephone, call 800-391-2548,
verbal pass code Pilgrim’s Pride or VG495227. The call will also be webcast live
on the Internet at
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=68228&eventID=1189714
(Please
copy and past the link into the browser)
The
webcast will be available for replay within two hours of the conclusion of
the
call. A telephone replay will be available beginning at 2:00 p.m. CDT on
January
23 through January 30 at 800-355-2355 pass code 495227#.
Pilgrim's
Pride Corporation is the second-largest poultry producer in the United States
and Mexico and the largest chicken producer in Puerto Rico. Pilgrim's Pride
employs more than 40,000 people and has major operations in Texas, Alabama,
Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in
Arizona, California, Florida, Iowa, Mississippi, Utah and
Wisconsin.
Pilgrim's
Pride products are sold to foodservice, retail and frozen entree customers.
The
Company's primary distribution is through retailers, foodservice distributors
and restaurants throughout the United States and Puerto Rico and in the Northern
and Central regions of Mexico.
For
more
information, please visit www.pilgrimspride.com
Forward-Looking
Statements:
Statements
contained in this press release that state the intentions, hopes, beliefs,
anticipations, expectations or predictions of the future of Pilgrim's Pride
Corporation and its management, including the earnings guidance for the first
quarter of fiscal 2006 and our expectations regarding the financial effects
of
the restructuring of our Turkey operation, are forward-looking statements.
It
is
important to note that the actual results could differ materially from those
projected in such forward- looking statements. Factors that could cause actual
results to differ materially from those projected in such forward-looking
statements include: matters affecting the poultry industry generally, including
fluctuations in the commodity prices of feed ingredients, chicken and turkey;
additional outbreaks of avian influenza or other diseases, either in our
own
flocks or elsewhere, affecting our ability to conduct or operations and/or
demand for our poultry products; contamination of our products, which has
recently and can in the future lead to product liability claims and product
recalls; exposure to risks related to product liability, product recalls,
property damage and injuries to persons, for which insurance coverage is
expensive, limited and potentially inadequate changes in laws or regulations
affecting our operations or the application thereof; competitive factors
and
pricing pressures or the loss of one or more of our largest customers; currency
exchange rate fluctuations, trade barriers, exchange controls, expropriation
and
other risks associated with foreign operations; management of our cash
resources, particularly in light of our leverage, and restrictions imposed
by
and as a result of, our leverage; and the impact of uncertainties of litigation
as well as other risks described under "Risk Factors" in our Annual Report
on
Form 10-K and subsequent filings with the Securities and Exchange Commission.
Pilgrim's Pride Corporation undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.
###
For
further information contact:
Rick
Cogdill
Pilgrim's
Pride Corporation
(903)
434-1508