UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A
Proxy
Statement pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by
the Registrant þ
Filed
by
a Party other than the Registrant ¨
Check
the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Under Rule 14a -12
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Pilgrim’s
Pride Corporation
(Name
of
Registrant as Specified in Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Pilgrim's
Pride Corporation
4845
U.S. Highway 271 North
Pittsburg,
Texas 75686
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held Wednesday, January 31, 2007
The
Annual Meeting of Stockholders of Pilgrim's Pride Corporation (the "Company")
will be held at the Company's headquarters building, 4845 U.S. Highway 271
N.,
Pittsburg, Texas, on Wednesday, January 31, 2007, at 11:00 a.m., local time,
to
consider the following matters:
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The
election of thirteen Directors for the ensuing
year;
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The
ratification of the appointment of Ernst & Young LLP as the Company's
independent registered public accounting firm for the fiscal year
ending
September 29, 2007; and
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To
transact such other business as may be properly brought before the
meeting
or any adjournment. No other matters are expected to be voted on
at the
meeting.
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The
Board
of Directors has fixed the close of business on December 5, 2006, as the
record
date for determining stockholders of record entitled to notice of, and to
vote
at, the meeting. If you own stock in the Company at the close of business on
that date, you are cordially invited to attend the annual meeting. Seating
at
the meeting will be limited to the Company's stockholders, proxy holders,
and
invited guests of the Company. If you are a stockholder of record in your
own
name, please bring photo identification to the annual meeting. If you hold
shares through a bank, broker or other third party, please bring photo
identification and a current brokerage statement.
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RICHARD
A. COGDILL
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Pittsburg,
Texas
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Chief
Financial Officer,
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December
27, 2006
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Secretary
and Treasurer
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YOUR
VOTE IS IMPORTANT!
PLEASE
SIGN AND RETURN THE ACCOMPANYING PROXY.
Pilgrim's
Pride Corporation
4845
U.S. Highway 271 North
Pittsburg,
Texas 75686
PROXY
STATEMENT
GENERAL
INFORMATION
The
Board
of Directors of Pilgrim's Pride Corporation (the "Company") solicits
stockholders' proxies in the accompanying form for use at the Annual Meeting
of
Stockholders to be held on Wednesday, January 31, 2007, at 11:00 a.m., local
time, at the Company's headquarters at 4845 U.S. Highway 271 N., Pittsburg,
Texas and at any adjournments thereof (the "Meeting"). This Proxy Statement,
the
accompanying proxy card and the Company's 2006 Annual Report to Stockholders
are
being mailed, beginning on or about December 11, 2006, to all stockholders
entitled to receive notice of, and to vote at, the Meeting.
The
principal executive offices of the Company are located at 4845 U.S. Highway
271
N., Pittsburg, Texas 75686. Any writing required to be sent to the Company
should be mailed to this address.
Stockholders
Entitled to Vote
As
of
December 5, 2006, the record date for determining stockholders entitled to
notice of and to vote at the Meeting (the "Record Date"), the Company had
outstanding 66,555,773 shares of its common stock, $.01 par value per share.
The
Company's Certificate of Incorporation generally provides that holders of its
common stock are entitled to 20 votes for each share that has been continuously
beneficially owned by such holder on and after November 21, 2003, subject to
compliance with certain procedures, and one vote for all other shares. Article
Fourth of the Company's Certificate of Incorporation and the voting procedures
adopted thereunder contain several provisions governing the voting power of
the
Company's common stock, including a presumption that each share of common stock
held in "street" or "nominee" name or by a broker, clearing agency, voting
trustee, bank, trust company or other nominee shall be presumed to have been
acquired after November 21, 2003, and accordingly to be entitled to only one
vote per share, unless the holder furnished the Company with proof to the
contrary. Applying the presumptions described in Article Fourth of the Company's
Certificate of Incorporation, the Company's records indicate that 586,007,381
votes are entitled to be cast at the Meeting. All percentages of voting power
set forth in this proxy statement have been calculated based on such number
of
votes. Attached hereto as Annex A is a summary of these voting
provisions.
Voting
of Proxies
Because
many of the Company's stockholders are unable to attend the Meeting, the Board
of Directors solicits proxies by mail to give each stockholder an opportunity
to
vote on all items of business scheduled to come before the Meeting. Each
stockholder is urged to:
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(1)
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read
carefully the material in this Proxy
Statement;
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(2)
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specify
his or her voting instructions on each item by marking the appropriate
boxes on the accompanying proxy card;
and
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(3)
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sign,
date and return the proxy card in the enclosed, postage prepaid
envelope.
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The
accompanying proxy card provides a space, with respect to the election of
Directors, for a stockholder to withhold voting for any or all nominees for
the
Board of Directors, but does not permit a stockholder to vote for any nominee
not named on the proxy card. The card also allows a stockholder to abstain
from
voting on any other item if the stockholder chooses to do so.
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When
the
accompanying proxy card is properly executed and returned with voting
instructions with respect to any of the items to be voted upon, the shares
represented by the proxy will be voted in accordance with the stockholder's
directions by the persons named on the proxy card as proxies of the stockholder.
If a proxy card is signed and returned, but no specific voting instructions
are
given, the shares represented by the proxy card will be voted for the election
of the thirteen nominees for Directors named on the accompanying proxy card
and
for the ratification of the appointment of Ernst & Young LLP as the
Company's independent registered public accounting firm.
Unless
otherwise indicated by the stockholder, returned proxy cards also confer upon
the persons named on the card, as proxies for the stockholder, discretionary
authority to vote all shares of stock represented by the proxy card on any
item
of business that is properly presented for action at the Meeting, even if not
described in this Proxy Statement. If any of the nominees for Director named
below should be unable or unwilling to accept nomination, the proxies will
be
voted for the election of such other person as may be recommended by the Board
of Directors. The Board of Directors, however, has no reason to believe that
any
item of business not set forth in this Proxy Statement will come before the
Meeting or that any of the nominees for Director will be unavailable for
election.
Revocation
of Proxies
The
proxy
does not affect a stockholder's right to vote in person at the Meeting. If
a
stockholder executes a proxy, he or she may revoke it at any time before it
is
voted by submitting a new proxy card, or by communicating his or her revocation
in writing to the Secretary of the Company at 4845 U.S. Highway 271 N.,
Pittsburg, Texas 75686, or by voting by ballot at the Meeting.
Votes
Required
The
holders of at least a majority of the voting power of the Company's common
stock
outstanding on the Record Date must be present in person or by proxy at the
Meeting for the Meeting to be held. Abstentions and broker non-votes are counted
in determining whether at least a majority of the voting power of the Company's
common stock outstanding on the Record Date is present at the
Meeting.
Directors
will be elected by a plurality of the votes cast at the Meeting. The affirmative
vote of a majority of the voting power of the Company's common stock represented
and entitled to vote at the Meeting is required for the ratification of the
appointment of the Company's independent registered public accounting firm
and
approval of any other item of business to be voted upon at the Meeting.
Abstentions from voting on any matter will be included in the voting tally.
Abstentions will have no effect on the election of Directors. An abstention
will
have the same effect as a vote against the proposal to ratify the appointment
of
the Company's independent registered public accounting firm. Broker non-votes
are shares held by a broker or nominee that are represented at the Meeting,
but
with respect to which such broker or nominee is not empowered to vote on a
particular proposal. A broker non-vote will not be considered entitled to vote
on matters as to which the broker withholds authority; therefore, broker
non-votes are not included in the tabulation of voting results. Broker non-votes
will have no effect on the election of Directors, and broker non-votes will
not
be included in the tabulation of voting results with respect to the proposal
to
ratify the appointment of the Company's registered public accounting firm.
Lonnie "Bo" Pilgrim owned or controlled over 50% of the voting power of the
outstanding common stock on the Record Date, and thus will be able to elect
all
of the nominees for Directors and determine the outcome of all other matters
presented to a vote of the stockholders.
Stockholder
Proposals for 2008 Annual Meeting
The
Company currently expects that the 2008 Annual Meeting of Stockholders will
be
held on Wednesday, January 30, 2008. The Company's Amended and Restated
Corporate Bylaws state that a stockholder must give the Secretary of the Company
written notice, at the Company's principal executive offices, of the
stockholder’s intent to present a proposal at the Company's 2008 Annual Meeting
of Stockholders by October 2, 2007, but not before May 5, 2007. Additionally,
in
order for stockholder proposals which are submitted pursuant to
2
Act
of
1934, as amended (the "Exchange Act"), to be considered by the Company for
inclusion in the Company's proxy materials for the 2008 Annual Meeting of
Stockholders, they must be received by the Secretary of the Company at the
Company's executive offices no later than the close of business on August
29,
2007.
Cost
of Proxy Solicitation
The
Company will bear the cost of the Meeting and the cost of soliciting proxies
in
the accompanying form, including the cost of mailing the proxy material. In
addition to solicitation by mail, Directors, officers and other employees of
the
Company may solicit proxies by telephone or otherwise. They will not be
specifically compensated for such services. The Company will request brokers
and
other custodians, nominees and fiduciaries to forward proxies and proxy
soliciting material to the beneficial owners of the Company's common stock
and
to secure their voting instructions, if necessary. The Company will reimburse
them for the expenses in so doing.
Role
of the Board of Directors
The
Board
of Directors has the responsibility for establishing broad corporate policies
and for the overall performance of the Company. However, it is not involved
in
day-to-day operating details. Members of the Board are kept informed of the
Company's business through discussions with the Chairman and other officers
and
by reviewing analyses and reports sent to them each month, as well as by
participating in Board and committee meetings.
Board
Independence
The
Board
of Directors has determined that each of the current directors standing for
election, except for Lonnie "Bo" Pilgrim, Clifford E. Butler, Lonnie Ken
Pilgrim, O.B. Goolsby, Jr. and Richard A. Cogdill, has no material relationship
with the Company (either directly or as a partner, stockholder or officer of
an
organization that has a relationship with the Company) and is independent within
the meaning of the Company's Corporate Governance Policy's categorical
independence standards, which are attached hereto as Annex B, and the New
York Stock Exchange's listing standards.
Committees
of the Board of Directors
To
assist
in carrying out its duties, the Board of Directors has delegated certain
authority to the Audit and Compensation Committees. The Audit Committee was
established in accordance with Section (3)(a)(58)(A) of the Exchange Act. The
members of the Audit Committee are Vance C. Miller, Sr., Linda Chavez and Keith
Hughes. The members of the Compensation Committee are Lonnie "Bo" Pilgrim,
Vance
C. Miller, Sr., Lonnie Ken Pilgrim, James G. Vetter, Jr., and Blake D. Lovette.
The Compensation Committee also has a subcommittee consisting of Charles L.
Black and Vance C. Miller, Sr. Each committee meets to examine various facets
of
the Company's operations and take appropriate action or make recommendations
to
the Board of Directors.
The Board of Directors does not maintain a Nominating Committee. As a
"controlled company" under the New York Stock Exchange's listing standards,
the
Company chooses to have the entire Board of Directors participate in the
consideration of Director nominees. See "Controlled Company Exemption" below
for
a discussion of controlled company status. The Board of Directors does not
delegate the responsibility of nominating potential new Directors to a separate
nominating committee because it believes that all Directors should be involved
in this process. The Board of Directors' policy is to encourage selection of
Directors who will contribute to the Company's overall corporate goals of
responsibility to its stockholders, industry leadership and integrity in
financial reporting and business conduct. The Board of Directors will review
the
experience and characteristics appropriate for Board members and Director
candidates in light of the Board of Directors' composition at the time and
skills and expertise needed for effective operation of the Board of Directors
and its
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committees.
Final approval of a candidate is determined by the full Board. Because
theCompany is a controlled company, the Board of Directors does not have
a
policy with regard to the consideration of any Director candidates recommended
by the Company's stockholders. However, the Board of Directors will consider
stockholder recommendations for candidates for the Board which should be
sent to
Pilgrim's Pride Corporation, Corporate Secretary, 4845 U.S. Highway 271 N.,
Pittsburg, Texas 75686.
The
Audit
Committee's responsibilities include the selection of independent public
accountants, reviewing the plan and results of the audit performed by the
Company’s independent registered public accounting firm and the adequacy of the
Company's systems of internal accounting controls, and monitoring compliance
with the Company's conflicts of interest and business ethics policies. The
Audit
Committee is composed entirely of Directors who the Board of Directors has
determined to be independent within the meaning of the New York Stock Exchange's
listing standards. The Board of Directors has determined that each of the
members of the Audit Committee is financially literate and at least one member
has accounting or financial management expertise, in each case as required
by
the New York Stock Exchange's listing standards. The Board of Directors has
determined that Mr. Keith Hughes is an "audit committee financial expert" within
the meaning of the regulations of the Securities and Exchange Commission. The
Audit Committee has an Audit Committee Charter that was attached to last year’s
Proxy Statement. The Audit Committee Charter is also available on the Company's
website at www.pilgrimspride.com,
under
the "Investors - Corporate Governance" caption. The Audit Committee Charter
is
also available in print to any stockholder who requests it.
The
Compensation Committee reviews the Company's remuneration policies and practices
and establishes the salaries of the Company's officers. The Compensation
Subcommittee is responsible for administering certain aspects of the Pilgrim's
Pride Corporation Senior Executive Performance Bonus Plan dealing with
compensation for designated Section 162(m) participants, currently Mr. Lonnie
"Bo" Pilgrim, Clifford E. Butler, O.B. Goolsby, Jr., Richard A. Cogdill and
J.
Clinton Rivers.
Meetings
During
the Company's fiscal year ended September 30, 2006, there were six regular
and
two telephonic meetings of the Board of Directors, five regular meetings and
five telephonic meetings of the Audit Committee, one meeting of the Compensation
Committee, one meeting of the Compensation Subcommittee and two executive
sessions including only non-management directors. During fiscal 2006, each
member of the Board of Directors attended at least 75% of the aggregate number
of meetings of the Board and Board Committees on which the Director served.
All
Directors attended the Company's 2006 Annual Meeting. While the Company does
not
have a formal policy regarding Director attendance at annual meetings of
stockholders, the Company encourages each Director to attend each annual meeting
of stockholders. In
practice, the Company intends to schedule regular Board of Directors meetings
on
the same day as its annual meeting of stockholders, which the Company believes
will facilitate Director attendance at the stockholders' meeting.
Communications
with the Board of Directors
Stockholders
and other interested parties may communicate directly with the Board of
Directors, any Board committee, all independent Directors, all non-management
Directors, or any one Director serving on the Board of Directors by sending
written correspondence to the desired person or entity attention of the
Company's Corporate Counsel at Pilgrim's Pride Corporation, 4845 U.S. Highway
271 N., Pittsburg, Texas 75686 or CorporateCounsel@pilgrimspride.com.
Communications are distributed to the Board of Directors, or to any individual
Director or Directors as appropriate, depending on the facts and circumstances
outlined in the communication.
Corporate
Governance
The
Board of Directors has adopted a Code of Business Conduct and Ethics and
Corporate Governance Policies of the Board of Directors. The full texts of
the
Code of Business Conduct and Ethics and Corporate Governance Policies are posted
on the Company's website at www.pilgrimspride.com,
under
the "Investors - Corporate Governance" caption and are
4
also
available in print to any stockholder who requests them. The Company intends
to
disclose future amendments to, or waivers from, certain provisions of the
Code
of Business Conduct and Ethics on the Company's website within four business
days following the date of such amendment or waiver.
Controlled
Company Exemption
The
Company is a "controlled company" under the New York Stock Exchange's listing
standards since Lonnie "Bo" Pilgrim owns or controls over 50% of
the
voting power of the outstanding common stock as of the Record Date. Accordingly,
the Company takes advantage of the exemptions in Sections 303A.01, 303A.04
and
303A.05 of the New York Stock Exchange's listing standards.
Executive
Sessions
Because
Lonnie "Bo" Pilgrim, the current Chairman of the Board, is not an independent
Director, the Board of Directors will either designate an independent Director
to preside at the meetings of the non-management and independent Directors
or a
procedure by which a presiding Director is selected for these meetings. In
the
absence of another procedure being adopted by the Board, the person appointed
will be the independent Director with the longest tenure on the Board in
attendance at the meeting.
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ELECTION
OF DIRECTORS
At
the
Meeting, thirteen Directors are to be elected, each to hold office for one
year
or until his successor is duly elected and qualified. Unless otherwise specified
on the proxy card, the shares represented by the enclosed proxy will be voted
for the election of the thirteen nominees named below. The Board of Directors
has no reason to believe that any nominee will be unable to serve if elected.
In
the event any nominee shall become unavailable for election, it is intended
that
such shares will be voted for the election of a substitute nominee selected
by
the Board of Directors. The Board of Directors has recommended each of the
nominees for Directors.
NOMINEES
FOR DIRECTOR
Lonnie
"Bo" Pilgrim,
78, has
served as Chairman of the Board since the organization of the Company in July
1968. He was previously Chief Executive Officer from July 1968 to June 1998.
Prior to the incorporation of the Company, Mr. Pilgrim was a partner in the
Company's predecessor partnership business founded in 1946.
Clifford
E. Butler,
64,
serves as Vice Chairman of the Board. He joined the Company as Controller and
Director in 1969, was named Senior Vice President of Finance in 1973, became
Chief Financial Officer and Vice Chairman of the Board in July 1983, became
Executive President in January 1997 and served in such capacity through July
1998.
O.B.
Goolsby, Jr.,
59,
serves as President and Chief Executive Officer of the Company. He became a
Director in January 2003. Mr. Goolsby has served as President and Chief
Executive Officer since September 2004. Mr. Goolsby served as President and
Chief Operating Officer from November 2002 to October 2004. Prior to being
named
as President and Chief Operating Officer in November 2002, Mr. Goolsby served
as
Executive Vice President, Prepared Foods Complexes from June 1998 to November
2002. He was previously Senior Vice President, Prepared Foods Operations from
August 1992 to June 1998 and Vice President, Prepared Foods Operations from
September 1987 to August 1992 and was previously employed by the Company from
November 1969 to January 1981.
Richard
A. Cogdill,
46, has
served as Chief Financial Officer, Secretary and Treasurer (the Company's
Principal Financial and Accounting Officer) since January 1997. He became a
Director in September 1998. Previously, he served as Senior Vice President,
Corporate Controller, from August 1992 through December 1996 and as Vice
President, Corporate Controller, from October 1991 through August 1992. Prior
to
October 1991, he was a Senior Manager with Ernst & Young LLP. He is a
Certified Public Accountant.
Lonnie
Ken Pilgrim,
48, has
been
employed by the Company since 1977 and has been Executive Vice President,
Assistant to Chairman since November 2004. He served as Senior Vice President,
Transportation from August 1997 to November 2004. Prior to that he served the
Company as its Vice President, Director of Transportation. He has been a member
of the Board of Directors since March 1985. He is a son of Lonnie "Bo"
Pilgrim.
Charles
L. Black,
77, was
Senior Vice President, Branch President of NationsBank, Mt. Pleasant, Texas,
from December 1981 to his retirement in February 1995.
He
previously was a Director of the Company from 1968 to August 1992 and has served
as a Director since his re-election in February 1995.
Linda
Chavez,
59, has
been Chairman of the Center for Equal Opportunity, a non-profit public policy
research organization in Sterling, Virginia since January 1, 2006 and previously
served as its President from 1995 until her election as Chairman. Previously,
she served as Chairman, National Commission on Migrant Education from 1988
to
1992 and White House Director of Public Liaison in 1985. She was elected a
Director in July 2004. She also serves on the board of directors of ABM
Industries, Inc., a facilities service contractor, as well as on the boards
of
several non-profit organizations.
6
S.
Key Coker,
49, has
served as Executive Vice President of Compass Bank, a $33 billion dollar bank
with offices throughout the southern United States, since October 2000.
Previously, he served as Senior Vice President of Compass Bank from June 1995
through September 2000 and had been employed by Compass Bank since 1992. He
is a
career banker with 27 years of experience in banking. He was appointed a
Director in September 2000.
Keith
W. Hughes,
60, was
elected a Director of the Company in September 2004. He was Chairman and CEO
of
Dallas-based Associates First Capital from 1994 to 2000 when it merged with
Citigroup, and served as Associates First Capital's President and Chief
Operating Officer from 1991 to 1994. Prior to joining Associates, he held
various roles in the financial services industry working for Continental
Illinois Bank in Chicago, Northwestern Bank in Minneapolis and Crocker Bank
in
San Francisco. Mr. Hughes also serves as a director of Texas Industries, Inc.,
a
producer of cement, concrete and aggregate construction material; and Fidelity
National Information Services where he is also a member of the audit committee.
He is a former Vice Chairman and member of the Board of Directors of Citigroup.
Blake
D. Lovette,
64, was
appointed a director of the Company in November 2003. He has served as a
consultant to companies serving the food industry and has been a private
investor since July 2002. From 1998 to June 2002, he was President of ConAgra
Poultry Company, a fully-integrated chicken processing business engaged in
the
production, processing, marketing and distribution of fresh and frozen chicken
products. Mr. Lovette has served as a poultry company executive for many years.
He was President and Chief Operating Officer of Valmac Industries from 1979
to
1985. From 1985 to 1988, Mr. Lovette led the Shenandoah Products Corporation
operations of Perdue Farms. He was President and Chief Operating Officer of
poultry operations of Holly Farms Corporation from 1988 to 1990, and was with
the Lovette Company from 1990 to 1998.
Vance
C. Miller, Sr.,
73, was
elected a Director in September 1986. Mr. Miller has been Chairman of Vance
C.
Miller Interests, a real estate development company formed in 1977, and has
served as the Chairman of the Board and Chief Executive Officer of Henry S.
Miller Cos., a Dallas, Texas, real estate services firm, since 1991. Mr. Miller
was appointed by the President of the United States to serve as Director of
Fannie Mae from 1986 to 1989.
James
G. Vetter, Jr.,
72, has
practiced law in Dallas, Texas, since 1966. He is of counsel to the Dallas
law
firm of Godwin Pappas Langley Ronquillo, LLP, and has served as a Director
since
1981. Mr. Vetter is a Board Certified-Tax Law Specialist and served as a
lecturer and author in tax matters.
Donald
L. Wass, Ph.D.,
74, was
elected a Director of the Company in May 1987. He has been President of the
William
Oncken Company of Texas,
a time
management consulting company, since 1970. Dr. Wass is also President of
TECTexas DFW, a firm that specializes in the continued development of
Presidents/CEOs.
Report
of the Audit Committee
The
Audit
Committee oversees the Company's accounting and financial reporting processes
and the integrity of the Company's financial statements on behalf of the Board
of Directors. Management has the primary responsibility for the financial
statements and the reporting process, including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
and discussed the audited financial statements in the Annual Report with
management, including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments and
the clarity of disclosures in the financial statements.
The committee reviewed with the independent auditors who are responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgments as to the
quality, not just the acceptability, of the Company's accounting principles
and
such other matters as are required to be discussed with
7
the
committee under generally accepted auditing standards. In addition, the
committee has discussed with the independent auditors the auditor's independence
from management and the Company, and has received from the independent auditors
the written disclosures and the letter from the independent auditors required
by
the Independence Standards Board.
The
committee discussed with the Company's internal and independent auditors the
overall scope and plans for their respective audits. The committee meets with
the internal and independent auditors, with and without management present,
to
discuss the results of their examinations, their evaluations of the Company's
internal controls and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the committee
recommended to the Board of Directors that the audited financial statements
be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2006 for filing with the Securities and Exchange Commission.
The
committee has also recommended the selection of the Company's independent
registered public accounting firm.
The
members of the Audit Committee are independent as within the meaning of the
New
York Stock Exchange's listing standards and the Audit Committee otherwise meets
the audit committee composition requirements of the New York Stock Exchange's
listing standards.
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Audit
Committee
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Vance
C. Miller, Sr.
Linda
Chavez
Keith
Hughes
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Independent
Auditor Fee Information
Audit
Fees
Fees
for
audit services totaled approximately $1,876,000 in fiscal 2006 and approximately
$2,118,000 in fiscal 2005, including fees associated with the annual audit,
the
audit of internal controls over financial reporting (i.e., the Sec. 404 Audit),
the reviews of the Company's quarterly reports on Form 10-Q, statutory audits
required in Mexico and assistance with registration statements and accounting
consultations.
Audit-Related
Fees
Fees
for
audit-related services totaled approximately $148,000 in fiscal 2006 and
approximately $355,000 in fiscal 2005. Audit-related services principally
include transaction assistance, Sarbanes-Oxley 404 assistance and employee
benefit plan audits.
Tax
Fees
Fees
for
tax services, including tax compliance, tax advice and tax planning, totaled
approximately $380,000 in fiscal 2006 and approximately $394,000 in fiscal
2005.
All
Other Fees
Fees
for
all other services not included above totaled approximately $9,000 in fiscal
2006 and approximately $6,000 in fiscal 2005, for certain other services,
principally litigation related.
The
Audit
Committee has pre-approved all audit and non-audit fees of the independent
auditor during fiscal 2006.
Pre-Approval
Policies and Procedures
In
accordance with the Audit Committee Charter, the Audit Committee has established
policies and procedures by which it approves in advance any audit and
permissible non-audit services to be provided by the Company's independent
auditors. Under these procedures, prior
to
the engagement of the independent auditor for pre-approved services,
8
requests
or applications for the auditors to provide services must be submitted to the
Company's chief financial officer or his designee and the Audit Committee and
must include a detailed description of the services to be rendered. The chief
financial officer or his designee and the independent auditors must ensure
that
the independent auditors are not engaged to perform the proposed services unless
those services are within the list of services that have received the Audit
Committee's pre-approval and must cause the Audit Committee to be informed
in a
timely manner of all services rendered by the independent auditors and the
related fees.
Requests
or applications for the independent auditors to provide services that require
additions or revisions to the fiscal 2007 pre-approval will be submitted to
the
Audit Committee (or any Audit Committee members who have been delegated
pre-approval authority) by the chief financial officer or his designee. Each
request or application must include:
• a
recommendation by the chief financial officer (or designee) as to whether the
Audit Committee should approve the request or application; and
• a
joint
statement of the chief financial officer (or designee) and the auditors as
to
whether, in their view, the request or application is consistent with the
Securities and Exchange Commission's regulations and the requirements for
auditor independence of the Public
Company Accounting Oversight Board ("PCAOB").
The
Audit
Committee also will not permit the auditors' engagement to provide any services
to the extent that the Securities and Exchange Commission has prohibited the
provision of those services by independent auditors.
The
Audit
Committee delegated authority to the Chairman of the Audit Committee to:
• pre-approve
any services proposed to be provided by the independent auditors and not already
pre-approved or prohibited by this policy;
• increase
any authorized fee limit for pre-approved services (but not by more than 30%
of
the initial amount that was pre-approved) before the Company or its subsidiaries
engage the auditors to perform services for any amount in excess of the fee
limit; and
• investigate
further the scope, necessity or advisability of any services as to which
pre-approval is sought.
The
Chairman is required to report any pre-approval or fee increase decisions to
the
Audit Committee at the next committee meeting. The Audit Committee did not
delegate to management any of the Audit Committee's authority or
responsibilities concerning the auditors' services.
Compensation
Committee Interlocks and Insider Participation
During
fiscal 2006, the members of the Company's Compensation Committee were Lonnie
"Bo" Pilgrim, Chairman of the Board of the Company, Vance C. Miller, Sr., Lonnie
Ken Pilgrim, Executive Vice President, Assistant to Chairman of the Company,
James G. Vetter, Jr., and Blake D. Lovette.
The Company has been and continues to be a party to certain transactions with
Lonnie "Bo" Pilgrim and his children and a law firm affiliated with James G.
Vetter, Jr. These transactions, along with all other transactions between the
Company and affiliated persons, require the prior approval of the Audit
Committee of the Board of Directors.
Set
forth
below is a summary of these transactions:
From
time
to time the Company enters into a risk transfer transaction with Lonnie "Bo"
Pilgrim whereby Mr. Pilgrim purchases certain amounts of our live chickens
and
hens, feed inventory and veterinary and technical services during the grow-out
process and then contracts with us to resell the birds at maturity. Chicks,
feed
and services are purchased from us for their fair market value, and we purchase
the mature chickens from Mr. Pilgrim at a market-based formula price subject
to
a ceiling price calculated at Mr. Pilgrim's
cost plus
9
2
percent. Additionally, we process the payroll for certain employees of Mr.
Pilgrim and Pilgrim Poultry G.P. ("PPGP") as well as perform certain
administrative bookkeeping services for Mr. Pilgrim's personal businesses.
During fiscal 2006, we paid Mr. Pilgrim, doing business as PPGP, $790,101
for
chickens produced in his grow-out operations, and PPGP paid us $1,166,611
for
chicks, feed and services, including the payroll services described above.
Lonnie "Bo" Pilgrim is the sole proprietor of PPGP.
PPGP
also
rents facilities to us for the production of eggs. On December 29, 2000, we
entered into an agreement with PPGP to rent its egg production facilities for
a
monthly amount of $62,500. During fiscal year 2006, we paid rental on the
facilities of $750,000 to PPGP. Our management believes that the terms of this
agreement with PPGP are substantially similar to, and contain terms not less
favorable to us than, agreements obtainable from unaffiliated
parties.
We
also
maintain depository accounts with a financial institution of which Lonnie "Bo"
Pilgrim is a major stockholder. Fees paid to this bank in fiscal 2006 are
insignificant, and as of September 30, 2006, we had bank balances at this
financial institution of approximately $1.7 million.
Since
1985, we have leased an airplane from Lonnie "Bo" Pilgrim under a lease
agreement which provides for monthly lease payments of $33,000 plus operating
expenses, which terms our management believes to be substantially similar to
those obtainable from unaffiliated parties. During fiscal 2006 we had lease
expenses of $396,000 and operating expenses of $96,480 associated with the
use
of this airplane.
Historically,
much of our debt has been guaranteed by our major stockholders. In consideration
of such guarantees, we have paid such stockholders a quarterly fee equal to
.25%
of the average aggregate outstanding balance of such guaranteed debt. During
fiscal 2006, we paid $1,676,243 to Pilgrim Interests, Ltd., an affiliate of
Lonnie "Bo" Pilgrim.
Certain
members of the family of Lonnie "Bo" Pilgrim are employed by us, including
his
son, Lonnie Ken Pilgrim, a Director and our Executive Vice President, Assistant
to Chairman, his son, Pat Pilgrim and his daughter, Greta Pilgrim-Owens, who
received total compensation for fiscal 2006 of $312,887, $215,551 and $215,302,
respectively. In addition they were each paid $340,610 in bonuses that related
to fiscal 2005. There will be no bonuses paid to them in fiscal 2006. Pat
Pilgrim also provided hauling and pumping services to the Company for which
he
was paid $396,923. He also paid the Company $21,834 in fiscal 2006 for land
he
leases from the Company. These transactions have terms substantially the same
as
contracts entered into by the Company with unaffiliated parties.
On
November 30, 2005, the Audit Committee pre-approved the Company entering into
three contracts with Pat Pilgrim and purchasing a substantially unused aerator
from Pat Pilgrim for a purchase price of $8,000. The aerator was purchased
by
Pat Pilgrim in May 2005 for $9,500. The contracts pre-approved by the Audit
Committee include a general services agreement, a transportation agreement
and a
lease of certain land from the Company providing for lease payments of
$23,263.50 per year. The general services agreement and the transportation
agreement are intended to document the services provided by Pat Pilgrim, which
for fiscal 2006, are described above. Management believes the terms of each
of
the contracts, the lease and the purchase of the aerator are substantially
similar to those obtainable from unaffiliated parties.
Godwin
Pappas Langley Ronquillo, LLP, represents us in connection with a variety of
legal matters. James
G.
Vetter, Jr., is of counsel to the Dallas law firm of Godwin Pappas Langley
Ronquillo, LLP.
We have entered into chicken grower contracts involving farms owned by certain
of our officers, providing the placement of Pilgrim's Pride-owned flocks on
their farms during the grow-out phase of production. These contracts are on
terms substantially the same as contracts entered into by the Company with
unaffiliated parties and can be terminated by either party upon completion
of
the grow-out of each flock. The aggregate amount paid by us to Lonnie "Bo"
Pilgrim under these grower contracts during fiscal 2006 was
$334,063.
10
EXECUTIVE
COMPENSATION
The
following table sets forth a summary of compensation paid to the Company's
Chief
Executive Officer and the other persons serving as executive officers during
fiscal 2006. See "Nominees for Director - Compensation Committee Interlocks
and
Insider Participation" above and "Certain Transactions" below for a discussion
of transactions between the Company and its Directors and executive officers
and
the Company's employment of certain of their children.
Summary
Compensation Table
|
Annual
Compensation
|
|||||
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
|
Bonus
|
Other
Annual
Compensation(1)
|
All
Other
Compensation(2)
|
|
Lonnie
"Bo" Pilgrim
|
2006
|
$1,370,622
|
$-0-
|
$164,348
|
$4,944
|
|
Chairman
of the Board
|
2005
|
1,124,902
|
1,917,862
|
116,531
|
4,921
|
|
2004
|
1,189,588
|
1,437,218
|
153,106
|
6,240
|
|
|
|
|||||
|
O.
B. Goolsby, Jr
|
2006
|
845,192
|
-0-
|
73,166
|
2,636
|
|
President
and Chief Executive Officer
|
2005
|
598,077
|
1,022,469
|
44,929
|
2,872
|
|
2004
|
492,115
|
648,978
|
39,315
|
2,354
|
|
|
Clifford
E. Butler
|
2006
|
422,064
|
-0-
|
10,762
|
3,202
|
|
Vice
Chairman of the Board
|
2005
|
409,808
|
698,687
|
10,244
|
3,007
|
|
2004
|
407,234
|
535,231
|
14,770
|
2,955
|
|
|
Richard
A. Cogdill
|
2006
|
647,115
|
-0-
|
37,487
|
953
|
|
Chief
Financial Officer,
|
2005
|
498,076
|
852,058
|
12,451
|
890
|
|
Secretary
and Treasurer
|
2004
|
394,604
|
520,263
|
18,613
|
670
|
|
J.
Clinton River
|
2006
|
647,115
|
-0-
|
24,155
|
1,183
|
|
Chief
Operating Officer
|
2005
|
497,115
|
852,058
|
9,521
|
919
|
|
2004
|
338,582
|
447,293
|
2,965
|
716
|
|
(1) Includes
the following items of compensation:
|
a.
|
Personal
use of corporate aircraft by the named individual: Lonnie "Bo"
Pilgrim,
$130,522 (2006), $74,687 (2005) and $82,099 (2004); and O.B. Goolsby,
Jr.,
$26,468 (2006), $13,755 (2005) $19,481 (2004). During fiscal years
2004,
2005 and 2006, the Company owned and operated airplanes to facilitate
business travel of certain of its employees in as safe a manner
as
possible with the best use of their time. Mr. Pilgrim and certain
other
named executive officers use the corporate aircraft for business
travel
and on a limited basis for personal travel. The value of personal
aircraft
usage reported above is based on the Company's direct operating
cost. The
methodology calculates our incremental cost based on the average
weighted
cost of fuel, aircraft maintenance, landing fees, trip-related
hanger and
parking costs, and smaller variable costs. Since the corporate
aircraft
are used primarily for business travel, the methodology excludes
fixed
costs which do not change based on usage, such as pilots' and other
employees' salaries, purchase cost of the aircraft and non-trip
related
hanger expenses. On certain occasions, an employee's spouse or
other
family member may accompany the employee on a flight. No additional
direct
operating cost is incurred in such situations under the foregoing
methodology.
|
|
b.
|
Personal
use of automobile by the named individual: Lonnie "Bo" Pilgrim,
$33,826
(2006), $41,844 (2005) and $71,007
(2004).
|
|
c.
|
Company's
contributions to the named individual under its Employee Stock
Purchase
Plan in the following amounts: Lonnie "Bo" Pilgrim, $0 (2006),
$0 (2005),
$0 (2004); O.B. Goolsby, Jr., $46,698 (2006), $31,174 (2005), $19,834
(2004); Clifford E. Butler, $10,762 (2006), $10,244 (2005), $14,770
(2004); Richard A. Cogdill, $37,487 (2006), $12,451 (2005), $18,613
(2004); and J. Clinton Rivers, $24,155 (2006), $9,521 (2005), $2,965
(2004).
|
(2) Includes
the following items of compensation:
|
a.
|
Company's
contributions to the named individual under its 401(k) Salary Deferral
Plan in the following amounts: Lonnie "Bo" Pilgrim, $0 (2006),
$0 (2005),
$0 (2004); O.B. Goolsby, Jr., $175 (2006), $182 (2005), $168 (2004);
Clifford E. Butler, $273 (2006), $182 (2005), $189 (2004); Richard
A.
Cogdill, $273 (2006), $182 (2005), $273 (2004); and J. Clinton
Rivers,
$175 (2006), $182 (2005), $224
(2004).
|
|
b.
|
Section
79 income to the named individual due to group term life insurance
in
excess of $50,000 in the following amounts: Lonnie "Bo" Pilgrim,
$4,944
(2006), $4,921 (2005), $6,240 (2004); O.B. Goolsby, Jr., $2,461
(2006),
$2,690 (2005), $2,186 (2004); Clifford E. Butler, $2,929 (2006),
$2,825
(2005), $2,766 (2004); Richard A. Cogdill, $680 (2006), $708 (2005),
$397
(2004); and J. Clinton Rivers, $1,008 (2006), $737 (2005), $492
(2004).
|
11
Directors'
Fees
The
Company pays its Directors who are not employees of the Company $9,000
per
meeting attended in person, plus expenses, and Directors who are not employees
of the Company also receive $4,000 and $2,000 per telephonic meeting that
they
participate in that lasts at least 45 minutes or less than 45 minutes,
respectively. Additionally, the Company pays the members of the Audit Committee
$6,000 for each Audit Committee meeting attended in person, plus expenses,
and
$4,000 and $2,000 per telephonic Audit Committee meeting that they participate
in that lasts at least 45 minutes or less than 45 minutes,
respectively.
Report
of Compensation Committee
The
Compensation Committee establishes executive compensation and oversees
the
administration of the bonus plan for key members of management and the
Company's
employee benefit plans.
The
following is a report submitted by the Compensation Committee members in
their
capacity as the Board's Compensation Committee, addressing the Company's
compensation policy as it related to the named executive officers for fiscal
2006.
Performance
Measures
The
Compensation Committee's establishment of annual executive compensation
is a
subjective process in which the Committee considers many factors, including
the
Company's performance as measured by earnings for the year, each executive's
specific responsibilities, the contribution to the Company's profitability
by
each executive's specific areas of responsibility, the level of compensation
believed necessary to motivate and retain qualified executives and the
executive's length of time with the Company.
Fiscal
Compensation
For
fiscal 2006, the Company's executive compensation program consisted of
(a) base
salary, (b) the bonus plan described below, (c) Company contributions to
the
Company's 401(k) salary deferral plan which are made up of mandatory
contributions of one dollar per week and matching contributions of up to
five
dollars per week and additional matching contributions of up to four percent
of
an executive's compensation subject to an overall Company contribution
limit of
five percent of domestic income before taxes and (d) Company contributions
to
the Senior Executive Bonus Plan in an amount equal to 33 1/3% of the officers'
payroll deduction for purchases of the Company's common stock under the
plan,
which deductions are limited to 7 1/2% of the officer's base salary, overtime
pay and bonuses.
In
establishing the fiscal 2006 compensation for Lonnie "Bo" Pilgrim, the
Company's
Chairman of the Board, the Compensation Committee adjusted Mr. Pilgrim's
annual
base salary to $1,370,620 to reflect changes in the cost of living. There
was no
bonus awarded for 2006 pursuant to the bonus plan discussed below.
In
establishing the fiscal 2006 compensation for O.B. Goolsby, Jr., the Company's
President and Chief Executive Officer, the Compensation Committee adjusted
Mr.
Goolsby's annual base salary to $845,192 based on the factors described
above
and to reflect changes in the cost of living. There was no bonus awarded
for
2006 pursuant to the bonus plan discussed below.
The
Company's objective is to obtain financial performance that achieves increased
return on equity, sales volume, earnings per share and net income. The
Compensation Committee believes that linking executive compensation to
corporate
performance results in a better alignment of compensation with corporate
goals
and stockholder interests.
The Company's Senior Executive Performance Bonus Plan (the "Plan") provides
for
five percent of the Company's U.S. income before income taxes to be allocated
among certain key members of management. Such amount is allocated among
all plan
participants based upon the ratio of each participant's eligible salary
to the
aggregate salaries of all
12
participants
and the number of months of the fiscal year the participant was approved
for
participation. The Plan also provides for a Subcommittee to administer
the plan
provisions dealing with certain designated Section 162(m) participants,
currently Mr. Lonnie "Bo" Pilgrim, Clifford E. Butler, O.B. Goolsby,
Jr.,
Richard A. Cogdill and J. Clinton Rivers. The Compensation Committee
retains the
right, in its sole discretion, to reduce, increase or eliminate, prior
to
payment thereof, the amount of any bonus that would otherwise be due
under the
Plan to non-Section 162(m) participants, and the Compensation Subcommittee
retains these same rights, except for the right to increase bonus amounts,
for
designated Section 162(m) participants. Participants may generally be
added or
removed from the plan at the discretion of the Compensation Committee.
Participants must continue to be employed by the Company on January 1
following
the end of a fiscal year in order to be paid a bonus with respect to
that year.
Bonuses are typically paid during the January following the fiscal year
with
respect to which the bonus has been granted.
|
Compensation
Committee
|
|
|
Lonnie
"Bo" Pilgrim
Vance
C. Miller, Sr.
Lonnie
Ken Pilgrim
James
G. Vetter, Jr.
Blake
D. Lovette
|
|
|
Compensation
Subcommittee
|
|
|
Charles
L. Black
Vance
C. Miller, Sr.
|
The
Report of the Compensation Committee, the Report of the Audit Committee,
references to the independence of directors, and the Stock Performance Graph
are
not deemed to be "soliciting material" or "filed " with the Securities and
Exchange Commission, are not subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall
not
be deemed incorporated by reference into any of the filings previously made
or
made in the future by our Company under the Exchange Act or the Securities
Act
of 1933, as amended (except to the extent our Company specifically incorporates
any such information into a document that is filed).
13
COMPANY
PERFORMANCE
The
following graphs compare the performance of the Company with that of the Russell
2000 composite index and a peer group of companies with the investment weighted
on market capitalization. The total cumulative return on investment (change
in
the year-end stock price plus reinvested dividends) for each of the periods
for
the Company, the Russell 2000 composite index and the peer group is based on
the
stock price or composite index at the end of fiscal 2001.
The
first
graph covers the period from September 29, 2001 through November 20, 2003,
the
last date on which the Company's Class A and Class B shares traded on the New
York Stock Exchange prior to reclassification into a single new class of shares
of common stock. The second graph covers the period from November 21, 2003
through September 30, 2006 and shows the performance of the Company's single
class of common stock.
The
third
graph covers the five fiscal year period ending September 30, 2006 and shows
the
performance of the Company's Class A and Class B shares after giving effect
to
the reclassification into the Company's single class of common stock on November
21, 2003 based on a one to one exchange ratio.
14
15
|
(1)
|
On
November 21, 2003, each share of the Company's then outstanding Class
A
common stock and Class B common stock was reclassified into one share
of
new common stock, which is now the only authorized class of the Company's
common stock. The Company's common stock is listed on the New York
Stock
Exchange under the symbol "PPC."
|
|
(2)
|
Companies
in the peer group index include Hormel Foods Corporation, Smithfield
Foods, Inc., Tyson Foods, Inc., Sanderson Farms, Inc. and Cagle's,
Inc.
|
16
CERTAIN
TRANSACTIONS
The
Company has been and continues to be a party to certain transactions with Lonnie
"Bo" Pilgrim, its Chairman, Clifford E. Butler, its Vice Chairman, O.B. Goolsby,
its President and Chief Executive Officer, and a law firm affiliated with James
G. Vetter, Jr., one of its Directors. These transactions, along with all other
transactions between the Company and affiliated persons, require the prior
approval of the Audit Committee of the Board of Directors, and the Audit
Committee has approved each of these transactions.
The
Company has entered into chicken grower contracts involving farms owned by
certain of its officers, providing the placement of the Company's-owned flocks
on their farms during the grow-out phase of production. These contracts are
on
terms substantially the same as contracts entered into by the Company with
unaffiliated parties and can be terminated by either party upon completion
of
the grow-out of each flock. The aggregate amounts paid by the Company to its
current officers under these grower contacts during fiscal 2006 were as follows:
Lonnie "Bo" Pilgrim, $334,063 and Clifford E. Butler, $317,038.
The
Company also employs Clifford E. Butler's son, Shane Butler, our Vice President
Prepared Foods, Mt. Pleasant and Waco, who was paid total compensation of
$276,475 in fiscal 2006. In addition, we employ O.B. Goolsby's daughter, Melissa
Goolsby-Cooney, Sales Field Representative, who was paid total compensation
of
$45,914 in fiscal 2006, son-in-law Scott Cooney, Director HACCP/Regulatory
Compliance, who was paid total compensation of $79,680 in fiscal 2006 and
daughter Tennille Goolsby, Consumer Relations Supervisor, who was paid total
compensation of $34,703 in fiscal 2006, and purchased landscape services from
Mr. Goolsby's son, Greg Goolsby, who was paid a total amount of $3,745 in fiscal
2006.
See
"Nominees for Director -- Compensation Committee Interlocks and Insider
Participation," which is incorporated herein by reference, for a discussion
of
the Company's transactions with Lonnie "Bo" Pilgrim and James G. Vetter,
Jr.
17
SECURITY
OWNERSHIP
The
following table sets forth, as of December 5, 2006 (except as otherwise noted),
certain information with respect to the beneficial ownership of the Company's
common stock by (a) each stockholder beneficially owning more than 5% of the
Company's outstanding common stock; (b) each Director and Director nominee
of
the Company who is a stockholder of the Company; (c) each of the executive
officers listed in the executive compensation table who is a stockholder of
the
Company; and (d) all executive officers and Directors of the Company as a group.
|
Name
of Beneficial Owner
|
Amount
and
Nature
of
Beneficial
Ownership
of
Common
Stock
|
Percent
of
Outstanding
Common
Stock
|
Percent
of
Voting
Power
|
|
Pilgrim
Interests, Ltd.(a)
..............................................................................
4845
U.S. Highway 271 N.
Pittsburg,
Texas 75686
|
22,118,077
|
33.2%
|
62.3%
|
|
Lonnie
"Bo" Pilgrim(a)(b)(c)(d)
.....................................................................
4845
U.S. Highway 271 N.
Pittsburg,
Texas 75686
|
25,351,125
|
38.1%
|
62.3%
|
|
Lonnie
Ken Pilgrim(a)(b)(c)(d)(e)
....................................................................
4845
U.S. Highway 271 N.
Pittsburg,
Texas 75686
|
22,871,529
|
34.4%
|
62.3%
|
|
Prudential
PLC(f)
..........................................................................................
Laurence
Pountney Hill
London,
EC4ROHH-United Kingdom
|
5,450,000
|
8.2%
|
0.9%
|
|
Lazard
Asset Management LLC/USA(g)
.................................................
75
State Street
Boston,
Massachusetts 02109
|
3,367,000
|
5.1%
|
.6%
|
|
Clifford
E. Butler(d)
......................................................................................
|
118,766
|
(h)
|
(h)
|
|
O.B.
Goolsby, Jr.(d)
.....................................................................................
|
36,683
|
(h)
|
(h)
|
|
Richard
A. Cogdill(d)
..................................................................................
|
51,004
|
(h)
|
(h)
|
|
J.
Clinton Rivers(d)
......................................................................................
Charles
L. Black
..........................................................................................
|
11,086
500
|
(h)
|
(h)
|
|
Linda
Chavez
...............................................................................................
|
--
|
--
|
--
|
|
S.
Key Coker
................................................................................................
|
--
|
--
|
--
|
|
Keith
W. Hughes
........................................................................................
|
1,000
|
(h)
|
(h)
|
|
Blake
D. Lovette
.........................................................................................
|
--
|
--
|
--
|
|
Vance
C. Miller, Sr.
.....................................................................................
|
2,000
|
(h)
|
(h)
|
|
James
G. Vetter, Jr.
......................................................................................
|
3,425
|
(h)
|
(h)
|
|
Donald
L. Wass, Ph.D.
..............................................................................
|
450
|
(h)
|
(h)
|
|
All
executive officers and Directors
as
a group (14 persons)(a)
......................................................................
|
26,155,877
|
39.3%
|
63.0%
|
|
(a)
|
Pilgrim
Interests, Ltd., Lonnie "Bo" Pilgrim and Lonnie Ken Pilgrim own
or control
22,118,077 (33.2%), 25,351,125 (38.1%) and 22,871,529 (34.4%) shares
of
the Company's common stock, which represents 75.5%, 86.5% and 78.0%,
respectively, of the voting power of the Company's common stock.
However,
pursuant to a Voting Agreement, dated as of November 18, 2003,
by and
between Pilgrim Interests, Ltd., Pilgrim Family Trust I, Pilgrim
Family
Trust II, PFCP, Ltd., Lonnie Jaggers Pilgrim Minority Trust, Greta
Gail
Pilgrim Minority Trust, Lonnie A. Pilgrim, Patricia R. Pilgrim,
Lonnie K.
Pilgrim and Donna G. Pilgrim and the Company, whenever these stockholders
directly or indirectly own or control (of record or beneficially)
shares
of the Company's common stock that would provide for more than
62.25% of
the Company's Total Voting Power they will vote their shares in
excess of
that percentage of the Total Voting Power in the same proportion
as the
votes cast by all other holders of the Company's common stock.
Total
Voting Power means the total number of votes that may be cast in
the
election of directors in respect of the Company's common stock
at any
meeting of stockholders if all common stock of the Company entitled
to
vote thereat was represented and voted to the fullest extent possible
at
such meeting.
|
| (b) |
Includes
22,118,077 shares of common stock held of record by Pilgrim Interests,
Ltd., a limited partnership formed by Mr. Lonnie "Bo" Pilgrim's
family,
68,013 shares of common stock held of record by PFCP, Ltd., another
limited partnership formed by Mr. Lonnie "Bo" Pilgrim's family,
90,580
shares of common stock held of record by Pilgrim
|
18
Family Trust I, an irrevocable trust for the benefit of Lonnie "Bo" Pilgrim's
surviving spouse and children, of which Lonnie Ken Pilgrim, an officer and
Director of the Company and the son of Lonnie "Bo" Pilgrim, and Patty R.
Pilgrim, Lonnie "Bo" Pilgrim's wife, are co-trustees, and 90,579 shares of
common stock held of record by Pilgrim Family Trust II, an irrevocable trust
for
the benefit of Lonnie "Bo" Pilgrim and his children, of which Lonnie "Bo"
Pilgrim and Lonnie Ken Pilgrim are co-trustees. Pilgrim Interests, Ltd. is
a
limited partnership formed by Mr. Pilgrim's family of which the managing
general
partner is the Lonnie A. Pilgrim 1998 Revocable Trust and the other general
partner is Lonnie Ken Pilgrim and the limited partners are Lonnie "Bo" Pilgrim,
The Lonnie A. "Bo" Pilgrim Endowment Fund, The Lonnie Ken Pilgrim Issue Trust,
The Greta Pilgrim Owens Issue Trust and The Pat Pilgrim Issue Trust. PFCP,
Ltd.
is a limited partnership formed by Mr. Pilgrim's family of which the managing
general partner is the Lonnie A. Pilgrim 1998 Revocable Trust and the other
general partner is Lonnie Ken Pilgrim, the class A limited partners are Lonnie
"Bo" Pilgrim and Patty R. Pilgrim and the class B limited partners are Lonnie
"Bo" Pilgrim, Patty R. Pilgrim and Lonnie Ken Pilgrim. The agreement
establishing the Lonnie A. Pilgrim 1998 Revocable Trust provides that Lonnie
"Bo" Pilgrim is the sole trustee during his life and, after his death, the
trustee shall be a board of trustees currently comprised of Patty R. Pilgrim
and
Lonnie Ken Pilgrim and S. Key Coker, Charles Black and Donald Wass, all
directors of the Company. The agreement establishing the Lonnie A. Pilgrim
1998
Revocable Trust provides that Lonnie "Bo" Pilgrim as the sole trustee shall
have
sole voting and dispositive power over the shares of common stock and, after
his
death, most voting matters require a majority vote of the board of trustees
except the direct or indirect sale of the shares of common stock requires
a
unanimous vote of the board of trustees. Additionally, Pilgrim Interests,
Ltd.
and PFCP, Ltd. have entered into a Voting Agreement, which may be terminated
at
any time by the unanimous action of Lonnie "Bo" Pilgrim, acting in his
individual capacity and as trustee of the Lonnie A. Pilgrim 1998 Revocable
Trust
(acting as managing general partner of Pilgrim Interests, Ltd. and PFCP,
Ltd.),
Patty R. Pilgrim and Lonnie Ken Pilgrim which provides that Lonnie Ken Pilgrim,
Greta Pilgrim Owens, the daughter of Lonnie "Bo" Pilgrim, S. Key Coker, Charles
L. Black and Donald L. Wass (the "Voting Representatives") shall have the
sole
power to vote the shares of common stock owned by Pilgrim Interests, Ltd.
and
PFCP, Ltd. All voting decisions require a majority of the Voting Representatives
except that (i) the sale of substantially all of the assets of the Company,
(ii)
the sale or liquidation of the Company, or (iii) the merger of the Company
requires a unanimous vote of the Voting Representatives. All other decisions
regarding common stock held by Pilgrim Interests, Ltd. and PFCP, Ltd. will
be
made by the Lonnie A. Pilgrim 1998 Revocable Trust. Each of Lonnie "Bo" Pilgrim
and Lonnie Ken Pilgrim disclaim beneficial ownership of the Company's common
stock held, except to the extent of their actual pecuniary interest
therein.
|
(c)
|
Includes
22,118,077 shares of common stock held of record by Pilgrim Interests,
Ltd., a partnership formed by Mr. Pilgrim's family of which Lonnie
A.
Pilgrim and Lonnie Ken Pilgrim are managing partners. Also includes
90,580
shares of common stock held of record by Pilgrim Family Trust I,
an
irrevocable trust dated June 16, 1987, for the benefit of Lonnie
"Bo"
Pilgrim's surviving spouse and children, of which Lonnie Ken Pilgrim
and
Patty R. Pilgrim, Lonnie "Bo" Pilgrim's wife, are co-trustees,
and 90,579
shares of common stock held of record by Pilgrim Family Trust II,
an
irrevocable trust dated December 23, 1987, for the benefit of Lonnie
"Bo"
Pilgrim and his children, of which Lonnie "Bo" Pilgrim and Lonnie
Ken
Pilgrim are co-trustees. Each of Lonnie A. Pilgrim and Lonnie Ken
Pilgrim
disclaim beneficial ownership of the Company's common stock held
by
Pilgrim Interests, Ltd., except to the extent of their respective
pecuniary interest therein.
|
|
(d)
|
Includes
shares held in trust by the Company's 401(k) Salary Deferral
Plan.
|
|
(e)
|
Includes
13,697 shares of common stock held by his wife. Also includes 53,510
shares of common stock held in two irrevocable trusts dated December
15,
1994 and October 31, 1989, of which Lonnie Ken Pilgrim is a co-trustee
for
the benefit of his children. Lonnie Ken Pilgrim disclaims any beneficial
interest in the foregoing shares.
|
|
(f)
|
Based
on information provided to the Company as of December 1, 2006 by
Prudential PLC(“Prudential"). Prudential has the sole power to direct the
vote of 5,450,000 shares.
|
|
(g)
|
Based
on information provided to the Company as of December 1, 2006 by
Lazard
Asset Management LLC/USA(“Lazard"). Lazard has the sole power to direct
the vote of 3,367,000 shares.
|
| (h) | Less than 1% |
.
19
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company's officers and Directors,
and
persons who own more than ten percent of the Company's common stock, to file
reports of ownership and changes in ownership with the SEC and the New York
Stock Exchange. Officers, Directors and greater than ten-percent stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based on its review of the copies of such
forms
received by it, the Company believes that all filing requirements applicable
to
its officers, Directors and greater than ten-percent stockholders for fiscal
2006 were complied with.
20
ITEM
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The
Board
of Directors recommends the ratification of the appointment of Ernst & Young
LLP as the Company's independent registered public accounting firm for the
2007
fiscal year. This independent registered public accounting firm has audited
the
Company pursuant to annual appointment since 1969 except for 1982 and 1983.
If
the stockholders fail to ratify the appointment, the Audit Committee will
reconsider its selection.
Representatives
of Ernst & Young LLP are expected to be present at the Meeting and to be
available to respond to appropriate questions. They will be given the
opportunity to make a statement if they wish to do so.
The
Board of Directors recommends a vote FOR the ratification of the appointment
of
Ernst & Young LLP as the Company's independent registered public accounting
firm for
fiscal year 2007.
Financial
Statements Available
Financial
statements for the Company are included in the Annual Report to Stockholders
for
the fiscal year 2006. Additional copies of these statements, as well as
financial statements for prior years and the Annual Report to the Securities
and
Exchange Commission on Form 10-K, may be obtained upon written request without
charge from the Secretary of the Company, 4845 U.S. Highway 271 N., Pittsburg,
Texas 75686. Financial statements are also on file with the Securities and
Exchange Commission, Washington, D.C. 20549, and the New York Stock
Exchange.
OTHER
BUSINESS
The
Board
of Directors is not aware of, and it is not anticipated that there will be
presented to the Meeting, any business other than the election of the Directors
and the proposal to ratify the appointment of Ernst & Young LLP as the
Company's independent registered
public accounting firm
described above. If other matters properly come before the Meeting, the persons
named on the accompanying proxy card will vote the returned proxies as the
Board
of Directors recommends.
Please
date, sign and return the proxy at your earliest convenience. A prompt return
of
your proxy will be appreciated as it will save the expense of further
mailings.
|
By order of the Board of Directors,
|
||
|
RICHARD A. COGDILL
|
||
|
Pittsburg,
Texas
|
Chief Financial Officer,
|
|
|
December
27, 2006
|
Secretary and Treasurer
|
21
Annex
A
Voting
Provisions
General.
On
November 20, 2003, the stockholders of Pilgrim's Pride Corporation (the
"Company" or the "Corporation") approved an amendment (the "Amendment") to
the
Company's Certificate of Incorporation which reclassified each share of the
Company's Class A common stock and each share of the Company's Class B common
stock into one share of new common stock, par value $.01 per share (the "Common
Stock"). The Company filed a Certificate of Amendment to its Certificate
of
Incorporation with the Secretary of State of Delaware affecting the Amendment
on
November 21, 2003, and the reclassification contemplated thereby (the
"Reclassification") became effective on such date. Set forth below is a summary
of the voting provisions of the Common Stock.
Record
Stockholders.
In
general, shares registered in the name of any person that are represented
by
certificates dated on or prior to November 21, 2003, the date of the
Reclassification, are presumed to have 20 votes per share, and all other
shares
are presumed to have one vote per share. However, the Company's Certificate
of
Incorporation (the relevant provisions of which are reproduced below) sets
forth
a list of circumstances in which the foregoing presumption may be refuted.
If
you believe that the voting information set forth on your proxy card is
incorrect or a presumption made with respect to your shares should not apply,
please send a letter to the Secretary of the Company, at 4845 U.S. Highway
271
N., Pittsburg, Texas 75686, briefly describing the reasons for your belief.
Merely marking the proxy card will not be sufficient notification to the
Company
that you believe the voting information thereon is incorrect.
Beneficial
Stockholders.
All
shares held in "street" or "nominee" name or by a broker, clearing agency,
voting trustee, bank, trust company or other nominee (including shares so
held
at the time of the Reclassification) are presumed to have one vote per share.
The Company's Certificate of Incorporation sets forth a list of circumstances
in
which the presumption may be refuted by the person who has held since the
Reclassification all of the attributes of beneficial ownership referred to
in
Section (2)(b) reproduced below. If you believe some or all of your shares
are
entitled to 20 votes, you may follow one of two procedures. First, you may
write
a letter to the Secretary of the Company, at 4845 U.S. Highway 271 N.,
Pittsburg, Texas 75686, describing the reasons for your belief. The letter
should contain your name, the name of the brokerage firm, bank or other nominee
holding your shares, your account number with such nominee and the number
of
shares you have beneficially owned continuously since the Reclassification.
Alternatively, you may ask your broker, bank or other nominee to write a
letter
to the Secretary of the Company on your behalf stating your account number
and
indicating the number of shares that you have beneficially owned continuously
since the Reclassification. In either case, your letter should indicate how
you
wish to have your shares voted.
Other.
The
Company will consider all letters received prior to the date of the Annual
Meeting and, when a return address is provided in the letter, will advise
the
party furnishing such letter of its decision, although in many cases the
Company
will not have time to inform an owner or nominee of its decision prior to
the
time the shares are voted. The Company may also require additional information
before a determination will be made. If you have any questions about the
Company's voting procedures, please call the Company at (903)
434-1000.
A-1
Excerpts
from the Company's Certificate of Incorporation
Paragraphs
1, 2 and 3 of Section II.A. of Article Fourth of the Company's Certificate
of
Incorporation provide as follows:
A. Common
Stock
(1) Reclassification
of Existing Class A and Class B Common Stock.
(a) Upon
the
filing of this Certificate of Amendment of Certificate of Incorporation,
each
share of Class A Common Stock, par value $.01 per share, of the Corporation
either issued and outstanding or held by the Corporation as treasury
stock,
shall be and is automatically reclassified and changed (without any further
act)
into one share of Common Stock (such reclassification being the "Class
A
Reclassification").
(b)
Upon
the
filing of this Certificate of Amendment of Certificate of Incorporation,
each
share of Class B Common Stock, par value $.01 per share, of the Corporation
either issued and outstanding or held by the Corporation as treasury
stock,
shall be and is automatically reclassified and changed (without any further
act)
into one share of Common Stock (such reclassification being the "Class
B
Reclassification").
(2) Voting
Rights of the Common Stock.
(a)
The
holders of record of Common Stock shall be entitled to one vote per share
for
all purposes, except that a holder of record of a share of Common Stock
shall be
entitled to twenty votes per share on each matter submitted to a vote
by the
stockholders at a meeting of stockholders for each such share held of
record by
such holder on the record date for such meeting if, with respect to such
share:
(i)
each
and every beneficial owner of such share was the beneficial owner thereof
at the
effective time of the Class A Reclassification or the Class B Reclassification;
and
(ii)
there has been no change in the beneficial ownership of the share at
any time
after the filing of this Certificate of Amendment of Certificate of
Incorporation.
(b) A
change
in beneficial ownership of an outstanding share of Common Stock shall
be deemed
to have occurred whenever a change occurs in any person or group of persons
who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares (i) voting power, which includes
the
power to vote or to direct the voting of such share of Common Stock,
(ii)
investment power, which includes the power to direct the sale or other
disposition of such share of Common Stock, (iii) the right to receive
or retain
the proceeds of any sale or other disposition of such share of Common
Stock, or
(iv) the right to receive any distributions, including cash dividends,
in
respect of such share of Common Stock.
(A) In
the
absence of proof to the contrary provided in accordance with the procedures
referred to in subparagraph (d) of this paragraph (2), a change in the
beneficial ownership shall be deemed to have occurred whenever a share
of Common
Stock is transferred of record into the name of any other person.
(B) The
beneficial owner of an outstanding share of Common Stock held of record
on a
record date for determining the holders entitled to vote on any matter
submitted
to a vote by the shareholders (a "Record Date") in "street" or "nominee"
name or
by a broker, clearing agency, voting trustee, bank, trust company or
other
nominee (including any share so held on at the time of filing of this
Certificate of Amendment of Certificate of Incorporation) shall
A-2
be
presumed to have acquired the beneficial ownership of such share subsequent
to
the filing of this Certificate of Amendment of Certificate of Incorporation.
Such presumption shall be rebuttable by showing that beneficial ownership
of
such share with respect to each and every beneficial owner thereof complies
with
subparagraph (a) of this paragraph (2).
(C) In
the
case of a share of Common Stock held of record in the name of any person
as a
trustee, agent, guardian or custodian under the Uniform Transfers to Minors
Act
in effect in any state, a change in the beneficial ownership shall be deemed
to
have occurred whenever there is a change in the beneficiary of such trust,
the
principal of such agent, the ward of such guardian or the minor for whom
such
custodian is acting or in such trustee, agent, guardian or
custodian.
(c) Notwithstanding
anything in this paragraph (2) to the contrary, no change in beneficial
ownership shall be deemed to have occurred for purposes of clause (i) and
(ii)
of subparagraph (a) of this paragraph (2) solely as a result of:
(i) any
event
that occurred prior to the filing of this Certificate of Amendment of
Certificate of Incorporation pursuant to the terms of any contract (other
than a
contract for the purchase and sale of shares of Common Stock contemplating
prompt settlement), including contracts providing for options, rights of
first
refusal and similar arrangements in existence at the time of such filing
to
which any holder of shares of Common Stock is a party;
(ii) any
transfer of any interest in a share of Common Stock pursuant to a bequest
or
inheritance by operation of law upon the death of any individual, or by any
other transfer to or primarily for the benefit of family member(s) of the
transferor or any trust, partnership or other entity primarily for the benefit
of one or more of such family member(s), or pursuant to an appointment of
a
successor trustee, general partner or similar fiduciary or the grant of a
proxy
or other voting rights to one or more individuals with respect to any such
trust, partnership or other entity, including a gift;
(iii) any
change in the beneficiary of any trust or any distribution of a share of
Common
Stock from trust, by reason of the birth, death, marriage or divorce of any
natural person, the adoption of any natural person prior to age 18 or the
passage of a given period of time or the attainment by any natural person
of a
specific age, or the creation or termination of any guardianship or custodial
arrangement;
(iv) any
transfer of any interest in a share of Common Stock from one spouse to another
by reason of separation or divorce or under or pursuant to community property
laws or other similar laws of any jurisdiction;
(v) any
appointment of a successor trustee, agent, guardian, custodian or similar
fiduciary with respect to a share of Common Stock if neither such successor
has
nor its predecessor had the power to vote or to dispose of such share of
Common
Stock without further instructions from others;
A-3
(vi) any
change in the person to whom dividends or other distributions in respect
of a
share of Common Stock are to be paid pursuant to the issuance or modification
of
a revocable dividend payment order;
(vii) any
transfer of the beneficial ownership of a share of Common Stock from one
employee benefit plan of the Corporation to another employee benefit plan
of the
Corporation;
(viii) the
grant
by any person of the right to vote any shares of which such person is the
beneficial owner, provided the agreement, arrangement or understanding
to vote
such shares arises solely from a revocable proxy or consent given in response
to
a proxy or consent solicitation made to 10 or more persons; or
(ix) any
event
occurring under the Share Voting Agreement, dated as of June 7, 2003, among
Lonnie "Bo" Pilgrim, Lonnie Ken Pilgrim and certain affiliated entities
and
ConAgra Foods, Inc. or any voting agreement to which any such persons or
entities are parties entered into in connection with the New York Stock
Exchange's consent to the Class A Reclassification and Class B
Reclassification.
As
used
in paragraph 2(c)(ii) above, "family member" of a transferor means the
transferor's spouse, ancestors, lineal descendants, siblings and their
descendants, aunts and uncles, mother-in-law, father-in-law, sons-in-law,
daughters-in-law, brothers-in-law, sisters-in-law and first cousins; and
a
legally adopted child of an individual shall be treated as a child of such
individual by blood.
(d) For
purposes of this paragraph (2), all determinations concerning changes in
beneficial ownership, or the absence of any such change, shall be made
by the
Corporation or, at any time when a transfer agent is acting with respect
to the
share of Common Stock, by such transfer agent on the Corporation's behalf.
Written procedures designed to facilitate such determinations shall be
established by the Corporation and refined from time to time. Such procedures
shall provide, among other things, the manner of proof of facts that will
be
accepted and the frequency with which such proof may be required to be
renewed.
The Corporation and any transfer agent shall be entitled to rely on all
information concerning beneficial ownership of the shares of Common Stock
coming
to their attention from any source and in any manner reasonably deemed
by them
to be reliable, but neither the Corporation nor any transfer agent shall
be
charged with any other knowledge concerning the beneficial ownership of
the
shares of Common Stock.
(e)
A
beneficial owner of any share of Common Stock acquired as a direct result
of a
stock split, stock dividend, reclassification, rights offering or other
distribution of shares or rights by the Corporation with respect to existing
shares ("dividend shares") will be deemed to have been the continuous beneficial
owner of such share from the date on which the original shares, with respect
to
which the dividend shares were issued, were acquired.
(f) The
number of authorized shares of Common Stock may be increased or decreased
(but
not below the number of shares thereof then outstanding) by the affirmative
vote
of the holders of a majority of the voting power of the Common
Stock.
(g) No
holder
of Common Stock shall be entitled to preemptive or subscription rights.
(3) Identical
Rights.
Each
share of Common Stock, whether at any particular time the holder thereof
is
entitled to exercise twenty
votes or
one, shall be identical to all other shares of Common Stock in all respects,
and
together the shares of Common Stock shall constitute a single class of
shares of
the Corporation.
A-4
Annex
B
Independence
Standards
A
director shall be independent if the director meets each of the following
standards and otherwise has no material relationship with the company,
either
directly, or as a partner, stockholder, or officer of an organization
that has a
relationship with the company. For purposes of these standards, "company"
means
Pilgrim's Pride Corporation and its consolidated subsidiaries,
collectively.
|
1.
|
the
director is not, and in the past three years has not been,
an employee of
the company;
|
|
2.
|
an
immediate family member of the director is not, and in the
past three
years has not been, employed as an executive officer of the
company;
|
|
3.
|
neither
the director nor an immediate family member of the director
is a current
partner of a firm that is the company's internal or external
auditor
("affiliated auditing firm");
|
|
4.
|
the
director is not a current employee of an affiliated auditing
firm;
|
|
5.
|
the
director does not have an immediate family member who is a
current
employee of an affiliated auditing firm and who participates
in the firm's
audit, assurance or tax compliance
practice;
|
|
6.
|
neither
the director nor an immediate family member of the director
has within the
last three years been a partner or employee of an affiliated
auditing firm
and personally worked on the company's audit within that
time;
|
|
7.
|
neither
the director nor an immediate family member of the director
is, or in the
past three years has been, part of an interlocking directorate
in which a
current executive officer of the company served on the compensation
committee of another public company where the director or the
director's
immediate family member served as an executive
officer;
|
|
8.
|
neither
the director nor an immediate family member of the director
receives or
has in the past three years received any direct compensation
payments from
the company in excess of $100,000 per year, other than compensation
for
board service, compensation received by the director's immediate
family
member for service as a non-executive employee of the company,
and pension
or other forms of deferred compensation for prior
service;
|
|
9.
|
the
director is not a current employee, and no immediate family
member of the
director is a current executive officer, of another company
that makes
payments to or receives payments from the company, or during
any of the
last three fiscal years has made payments to or received payments
from the
company, for property or services in an amount that, in any
single fiscal
year, exceeded the greater of $1 million or 2% of the other
company's
consolidated gross revenues;
|
|
10.
|
the
director is not an executive officer of a tax exempt organization
to which
the company makes or in the past three years has made, contributions
that,
in any single fiscal year, exceeded the greater of $.5 million
or 1% of
the tax exempt organization's consolidated gross revenues;
or
|
| 11. | the director is not, and during the last fiscal year has not been, a partner in, or a controlling shareholder or executive officer of, a business corporation, non-profit, or other entity to which the company was indebted at the end of the company's last full fiscal year in an aggregate amount in excess of the lesser $5 million or .5% of the company's total consolidated assets at the end of such fiscal year. |
B-1
The
board
may determine that a director or nominee is "independent" even if the director
or nominee does not meet each of the standards set forth in paragraphs (7)
and
(8) above as long as the board determines that such person is independent
of
management and free from any relationship that in the judgment of the board
would interfere with such person's independent judgment as a member of the
board
and the basis for such determination is disclosed in the company's annual
proxy
statement.
In
addition, a director is not considered independent for purposes of serving
on
the audit committee, and may not serve on that committee, if the director:
(1)
receives, either directly or indirectly, any consulting, advisory or other
compensatory fee from the company or any of its subsidiaries other than:
(a)
fees for service as a director, and (b) fixed amounts of compensation under
a
retirement plan (including deferred compensation) for prior service with
the
company; or (2) is "an affiliated person" of the company or any of its
subsidiaries; each as determined in accordance with Securities and Exchange
Commission regulations.
For
purposes of this Annex B, the following definitions apply:
(a) "immediate
family member" means a person's spouse, parents, children, siblings, mother
and
father-in-law, sons and daughters-in-law, brothers and sisters-in-law, and
anyone (other than domestic employees) who shares such person's
home.
(b) "executive
officer" of a company means the company's chairman, vice chairman, chief
executive officer, president, chief operating officer, principal financial
officer, principal accounting officer (or, if there is no such accounting
officer, the controller), any vice-president of the company in charge of
a
principal business unit, division or function (such as sales, administration
or
finance), any other officer who performs a policy-making function, or any
other
person who performs similar policy-making functions for the company. Executive
officers of the company's parent(s) or subsidiaries will be deemed executive
officers of the company if they perform policy-making functions for the
company.
B-2
Proxy
- Pilgrim’s Pride Corporation
4845
US Highway 271 North
Pittsburg,
Texas 75686
This
Proxy is Solicited on Behalf of the Board of Directors.
The
undersigned hereby appoints Lonnie “Bo” Pilgrim and Clifford E. Butler, and each
of them, as proxies, each with the power to appoint his substitute, and hereby
authorizes them, and each of them, to represent and to vote, as designated
on
the reverse side, all the shares of common stock of Pilgrim’s Pride Corporation
held of record by the undersigned on December 5, 2006, at the Annual Meeting
of
Stockholders to be held on Wednesday, January 31, 2007 or any adjournment
thereof.
PLEASE
EXECUTE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED SELF-ADDRESSED STAMPED
ENVELOPE.
(Continued
and to be signed on reverse side.)
Annual
Meeting Proxy Card
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Election
of Directors
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To
withhold authority to vote for any individual
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nominees(s),
mark “For All Except” and write
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1.
The Board of Directors Recommends a Vote “FOR” the listed
nominees.
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the
number(s) of the nominee(s) on the line below
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01
- Lonnie “Bo” Pilgrim
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02
- Clifford E. Butler
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03
- O. B. Goolsby, Jr.
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04
- Richard A. Cogdill
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05
- Lonnie Ken Pilgrim
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06
- James G. Vetter, Jr.
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07
- S. Key Coker
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08
- Vance C. Miller, Sr.
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09
- Donald L. Wass, Ph.D.
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10
- Charles L. Black
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11
- Blake D. Lovette
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12
- Linda Chavez
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13
- Keith W. Hughes
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The
Board of Directors recommends a Vote “FOR” the following proposals.
2.
The
ratification of the appointment of Ernst & Young LLP as independent
registered
public
accounting firm for the Company for the fiscal year ending September 29,
2007.
3.
In
their discretion such other business as may properly come before the Annual
Meeting.
Authorized
Signatures - Sign Here - This section must be completed for your instructions
to
be executed.
UNLESS
OTHERWISE SPECIFIED ON THIS PROXY, THE SHARES REPRESENTED BY THIS PROXY
WILL BE
VOTED “FOR” THE ELECTION OF ALL OF MANAGEMENT’S NOMINEES FOR DIRECTORS AND “FOR”
PROPOSAL 2 ABOVE. DISCRETION WILL BE USED WITH RESPECT TO SUCH OTHER
MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
Please
date this proxy and sign your name exactly as it appears hereon. Persons
signing
in a representative capacity should indicate their capacity.
A
proxy
for shares held in joint ownership should be signed by each owner.
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