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Item 5.01 |
Changes in Control of Registrant. |
On the Effective Date, pursuant to the SPA, JBS USA was issued shares of New Common Stock constituting 64% of the total outstanding shares on that date, which resulted in a change in control of the Company as of the Effective Date. Prior to the Effective Date, Lonnie "Bo" Pilgrim, Patricia R. Pilgrim, his wife, and Lonnie
Ken Pilgrim, his son, controlled the direction and management of the Company through two limited partnerships and related trusts and voting agreements. At the Effective Date, JBS USA used cash on hand to fund the $800 million purchase price of the New Common Stock issued to it.
Pursuant to the Consulting Agreement dated September 16, 2009 between the Company and the Founder Director (the "Consulting Agreement"), the Reorganized Company is required to appoint the Founder Director to the Board and, for a five-year period beginning on the Effective Date, nominate the Founder Director for subsequent terms on the
Board. If the Founder Director is unable to serve on the Board, for health reasons or otherwise, the Consulting Agreement requires the Company to cause Lonnie Ken Pilgrim to be appointed to the Board and to be nominated for subsequent terms until the fifth anniversary of the Effective Date.
The information provided in Items 1.01, 3.02 and 5.03 of this Current Report on Form 8-K regarding the transactions effected pursuant to the SPA, the Stockholders Agreement, the cancellation of Old Common Stock and issuance of New Common Stock, the Restated Certificate of Incorporation and the Restated Bylaws, and the information provided
in Item 5.02 of the Current Report on Form 8-K of the Company filed with the SEC on September 18, 2009 regarding the Consulting Agreement, is incorporated by reference into this Item 5.01.
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Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The Reorganized Company adopted the Restated Certificate of Incorporation and Restated Bylaws in connection with its emergence from Chapter 11, effective as of the Effective Date. The following sets forth a description of the key provisions of the Restated Certificate of Incorporation and the Restated Bylaws.
Authorized Capital Stock. The total number of shares of all classes of stock that the Reorganized Company is authorized to issue is 850,000,000 shares, consisting of 800,000,000 shares of New Common Stock and 50,000,000 shares of Preferred Stock, par value $.01 per share
("Preferred Stock").
Dividends. Subject to applicable law, any contractual restrictions and the rights of the holders of any outstanding series of Preferred Stock, if any, holders of New Common Stock are entitled to receive ratably such dividends and other distributions that the Board, in
its discretion, declares from time to time. The Stockholders Agreement prohibits the Reorganized Company from declaring or distributing any non-pro rata dividends to holders of New Common Stock until the completion of the Mandatory Exchange Transaction.
Quorum at Meetings of Stockholders. The holders of a majority of the combined voting power of the capital stock issued and outstanding and entitled to vote thereat, represented in person or by proxy, are required and constitute a quorum at all meetings of stockholders
of the Reorganized Company for the transaction of business except as otherwise required by law, the Restated Certificate of Incorporation or the Restated Bylaws.
Stockholder Voting. All shares of New Common Stock have identical rights and privileges. Holders of New Common Stock are
entitled to one vote for each outstanding share of New
Common Stock held of record by such stockholder on all matters properly submitted for the vote of the Reorganized Company's stockholders. Each director will be elected by the vote of
a
plurality of the votes cast at any meeting of stockholders at which directors are elected. Except as provided by the Restated
Certificate of Incorporation, the Restated Bylaws or applicable law, all other elections and questions presented to the stockholders shall be decided by the affirmative vote of the holders of a majority in voting power of the shares present in person or by proxy and entitled to vote thereon. Holders of New Common Stock are
not entitled to cumulative voting rights.
Liquidation Rights. In the event of a liquidation, dissolution or winding up of the Reorganized Company, after the payment in full of all amounts owed to the Reorganized Company's creditors and holders of any outstanding shares of Preferred Stock, the remaining assets
of the Reorganized Company will be distributed ratably to the holders of shares of New Common Stock. The rights, preferences and privileges of holders of shares of New Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of Preferred Stock that the Reorganized Company may designate and issue in the future without stockholder approval.
Assessments and Liability. Holders of New Common Stock are not subject to further calls or assessments as a result of their holding shares of the New Common Stock. No personal liability will attach to holders of New Common Stock under the laws of the State
of Delaware (the Reorganized Company's state of incorporation).
Conversion, Redemption and Preemptive Rights. Holders of New Common Stock have no conversion, redemption, sinking fund, preemptive, subscription or similar rights.
Special Meetings of Stockholders. Special meetings of stockholders of the Reorganized Company may be called only by the Chairman of the Board, the Chief Executive Officer, the President, the affirmative vote of a majority of the Whole Board (as defined in the Restated
Bylaws) or, under certain circumstances, the Equity Nominating Committee, but no stockholder or other person may call any such special meeting.
No Written Consent of Stockholders. Subject to the rights of the holders of any series of Preferred Stock, any action taken by stockholders of the Reorganized Company must be effected at a duly held meeting of stockholders and may not be effected by the written consent
of such stockholders.
Blank Check Preferred Stock. The Board is authorized, subject to any limitations prescribed by law, to provide for the issuance of shares of Preferred Stock in series and in such number and with such designation, voting rights, powers, preferences and rights, qualifications,
limitations or restrictions as the Board may determine. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the sum of the number of shares thereof then outstanding and the number of shares into which any preferred or other securities may be converted or for which they may be exchanged) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Reorganized Company entitled to vote
thereon, without a vote of the holders of the Preferred Stock, or of any series thereof, irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock. These additional shares may be used for a variety of corporate purposes, including, without limitation, future public offerings, to raise additional capital or to facilitate acquisitions.
Advance Notice of Stockholder Action at a Meeting. Stockholders seeking to nominate directors or to bring business before a stockholder meeting must comply with certain timing requirements and submit certain information to the Reorganized Company in advance of such meeting.
Board Size and Composition. Pursuant to the Restated Certificate of Incorporation, the initial Board consists of nine directors, with (i) six JBS Directors, (ii) two Equity Directors
and (iii) the Founder Director. The initial directors of the Board will serve from the Effective Date until the annual meeting of stockholders of the Reorganized Company to be held in 2011, subject to each such director's earlier death, resignation or removal. For the period commencing on the Effective Date and ending two years and 30 days thereafter at least two Equity Directors are required to be on the Board. Any vacancy on the Board will be filled only by the affirmative vote
of a majority of the remaining directors then in office; provided, however, that (a) a vacancy in the directorship of a JBS Director may be filled only through the affirmative vote of a majority of directors on the JBS Nominating Committee, or if no directors remain on the JBS Nominating Committee, by the stockholders and (b) a vacancy in the directorship of an Equity Director or a Founder Director may be filled only by the affirmative vote of a majority of directors on the Equity Nominating Committee, or if
no directors remain on the Equity Nominating Committee, by the stockholders. The term of office of any director elected to fill a vacancy expires at the next annual meeting of stockholders after his or her election, with each director to hold office until his or her successor shall have been duly elected and qualified or until the earlier of his or her death, resignation or removal. The Restated Certificate of Incorporation contains additional provisions providing for (x) increases or decreases
in the relative numbers of JBS Directors and Equity Directors on the Board, depending on the percentage of outstanding New Common Stock held by JBS USA relative to other stockholders, (y) the replacement of the Founder Director with an Equity Director in the event of a Founder Triggering Event (as defined in the Restated Certificate of Incorporation) and (z) an increase in the size of the Board by two additional JBS Directors if JBS USA and its affiliates hold greater than 50% of the New Common Stock and any
applicable law or Exchange listing rule requires a greater number or proportion of independent directors on the Board.
Special Nominating Committees. Pursuant to the Restated Certificate of Incorporation, the Board has established two committees, designated as the "JBS Nominating Committee" and the "Equity
Nominating Committee." The JBS Nominating Committee is required to consist solely of JBS Directors, and the Equity Nominating Committee is required to consist solely of all of the Equity Directors. The JBS Nominating Committee has the exclusive authority to nominate the JBS Directors, fill JBS Director vacancies and select the members of the JBS Nominating Committee; and the Equity Nominating Committee has the exclusive authority to nominate the Equity Directors, fill Equity Director vacancies,
select the members of the Equity Nominating Committee, and to call a special meeting of stockholders under certain circumstances. Any member or alternate member of the Equity Nominating Committee may be removed only by the approval of a majority of the members of the Equity Nominating Committee. For so long as JBS and its affiliates beneficially own 35% or more of the outstanding New Common Stock, no person may be nominated as an Equity Director by the Equity Nominating Committee if JBS
USA reasonably determines that such person (i) is unethical or lacks integrity or (ii) is a competitor or is affiliated with a competitor of the Reorganized Company. Two Equity Directors (or one if there is only one Equity Director on the Board) must satisfy the independence requirements of Rule 10A-3 under the Exchange Act, and be financially literate for purposes of the applicable listing standards of the Exchange on which the New Common Stock is then listed, or if the Common Stock is not then listed,
then for purposes of Section 303A.07 of The New York Stock Exchange Listed Company Manual (or any successor rule) ("financially literate"), and, for so long as there are two or more Equity Directors on the Board, at least one Equity Director must qualify as an "audit committee financial expert" as that term is used in Item 407 of Regulation S-K under the Exchange Act (or any successor rule). If JBS and its affiliates own at least 50% of the issued and outstanding New Common Stock, at least one JBS
Director is required (A) to be an independent director, (B) to satisfy the independence requirements of Rule 10A-3 under the Exchange Act and (C) to be financially literate.
Removal of Directors. The Restated Bylaws provide that, except as otherwise required by law, any director, or the entire Board, may be removed either for or without cause at any duly convened special
or annual meeting of stockholders by the affirmative vote of a majority of the combined voting power of the shares of the stockholders entitled to vote at an election of directors voting together as a single class.
Limitations on Directors' Liability. The Restated Certificate of Incorporation contains a provision eliminating the personal liability of directors to the Reorganized Company and its stockholders
to the fullest extent permitted by applicable law. The Restated Bylaws also contain provisions generally providing for indemnification and advancement of expenses to the Reorganized Company's directors and officers to the fullest extent permitted by applicable law.
Approval of Certain Matters. Under the Restated Certificate of Incorporation, the approval of any of the following matters requires, in addition to any approval required by law, (a) the affirmative
vote of a majority of the directors present at a meeting of the Board at which a quorum is present and (b) the affirmative vote of at least a majority of the Equity Directors and any Founder Director, as a group:
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the creation of any committee of the Board with, or the delegation to any committee of the Board of, any power or authority which, individually or taken as a whole with any other power and/or authority, would adversely affect, or could reasonably be expected to adversely affect, in any material respect, the rights of the Minority Investors; |
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any change in the size of the Board; |
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any action that would reasonably be expected to cause the Reorganized Company no longer to satisfy the listing requirements of any Exchange on which any shares of capital stock of the Reorganized Company are listed or quoted; |
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any amendment or repeal of certain specified provisions of the Restated Certificate of Incorporation or Restated Bylaws, or any other amendment to the Restated Certificate of Incorporation or Restated Bylaws that, individually or taken as a whole with any other amendments, would adversely affect, or could reasonably be expected to adversely affect, in
any material respect the rights of the Minority Investors, as a class (whether by merger, consolidation or otherwise); |
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any creation, authorization or issuance of any series of Preferred Stock that, individually or taken as a whole with any other issuances of Preferred Stock, would adversely affect, or could reasonably be expected to adversely affect, in any material respect the Minority Investors, as a class, in a disproportionately adverse manner relative to all holders
of Common Stock (whether by merger, consolidation or otherwise); or |
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agreeing to do any of the foregoing. |
In addition, while there is a Founder Director on the Board, the approval of the Founder Director will be required for the Board to validly approve and authorize any amendment (whether by merger, consolidation or otherwise) to certain specified sections of the Restated
Certificate of Incorporation that would adversely affect, or could reasonably be expected to adversely affect, in any material respect, the rights of the Founder Director in his role as a director of the Reorganized Company.
Restrictions on Transfer on JBS USA. Until January 27, 2012, no shares of capital stock of the Reorganized Company may be sold or otherwise transferred to JBS USA or any of its affiliates except by way of stock
splits and similar transactions or pursuant to the Mandatory Exchange Transaction (discussed below).
Mandatory Exchange. The Restated Certificate of Incorporation provides that, if JBS USA completes an initial public offering of common stock of JBS USA (the "JBS USA Common Stock") and the offered
shares are listed on a national securities exchange, then, at any time during an Exchange Window (as defined below) falling within the period commencing on the date of the closing of the offering and ending on January 27, 2012, JBS USA will have the right to deliver written notice of the mandatory exchange of the New Common Stock (the "Mandatory Exchange Transaction") to the Reorganized Company. Upon delivery to the Reorganized Company of notice of the Mandatory Exchange Transaction each share of New
Common Stock held by stockholders other than JBS USA (the "Exchanged Holders") will automatically, without any further action on behalf of the Reorganized Company or any of the Exchanged Holders, be transferred to JBS USA in exchange for a number of duly authorized, validly issued, fully paid and non-assessable shares of JBS USA Common Stock equal to the Exchange Offer Ratio (as defined below). The Mandatory Exchange Transaction is required to be effected in compliance with all applicable laws. Unless
subsequently amended, pursuant to the Restated Certificate of Incorporation, the Mandatory Exchange Transaction may not be effected with respect to shares of New Common Stock held by the Founder Group (as defined in the Restated Certificate of Incorporation) until six months and one day after the Effective Date. An "Exchange Window" is a period of time beginning on the 6th trading day after the first day on which both the Reorganized Company and JBS USA will have each made their respective annual or
quarterly reports or earnings releases relating to the immediately preceding fiscal quarter or year, as applicable, and ending on the last day of the fiscal quarter during which the first day of the Exchange Window fell.
The "Exchange Offer Ratio" is a fraction, the numerator of which is the average volume-weighted daily trading price per share on the principal national securities exchange for the New Common Stock, and the denominator of which is the average volume-weighted daily
trading price per share on the principal national securities exchange for the JBS USA Common Stock, in each case for the Measurement Period. The "Measurement Period" is a number of consecutive trading days which is equal to twice the number of consecutive trading days between (i) the first date on which JBS USA and the Reorganized Company shall have both made their respective annual or quarterly reports or earnings releases for the applicable fiscal year or quarter and (ii) the date on which JBS USA
delivers the Reorganized Company the notice of the Mandatory Exchange Transaction.
Related Party Transactions. The Restated Certificate of Incorporation prohibits the Reorganized Company from entering into any transaction required to be disclosed under Item 404 of Regulation S-K
under the Exchange Act unless the audit committee or another committee comprised solely of independent directors first evaluates and approves the transaction. In addition, the Reorganized Company may not sell, lease or otherwise dispose of any of its assets to, or for the benefit of, or purchase or lease any assets from, or for the benefit of, JBS USA or any of its affiliates, except on terms that are fair and reasonable to the Reorganized Company and reflect an arms'-length transaction. The
Reorganized Company is required to retain the proceeds of any sale or disposition of assets.
Fiscal Year. The Restated Bylaws provide that, after the Effective Date, the Reorganized Company's fiscal year will end on the last Sunday in December.
The foregoing description of the Restated Certificate of Incorporation and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the text of the Restated Certificate of Incorporation and Restated Bylaws, which are filed
as Exhibits 3.1 and 3.2 to the Reorganized Company's Form 8-A filed on December 28, 2009, respectively, and incorporated into this report by reference.
In connection with its emergence from Chapter 11, the Company submitted an application to list the New Common Stock on The New York Stock Exchange (the "NYSE"). The New Common Stock was authorized for listing on the NYSE. The NYSE has assigned
the Reorganized Company's historical ticker symbol, "PPC," as the trading symbol for the New Common Stock. Regular way trading is expected to commence on December 29, 2009.
On December 28, 2009, the Reorganized Company filed a Form 8-A Registration Statement to register the New Common Stock under Section 12(b) of the Exchange Act.
On December 28, 2009, the Company issued a press release to announce the consummation of the reorganization contemplated by the Plan and the Reorganized Company's emergence from Chapter 11 bankruptcy proceedings. A copy of the press release is attached
hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
Exhibit
Number Description
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4.1 |
Form of New Common Stock Certificate |
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10.1 |
Credit Agreement dated December 28, 2009 among Pilgrim's Pride Corporation, To-Ricos, Ltd. and To-Ricos Distribution, Ltd., CoBank, ACB, as administrative agent, and the lenders party thereto |
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99.1 |
Press release, dated December 28, 2009 |
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: December 29, 2009 By: /s/
Don Jackson
Don Jackson
Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
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4.1 |
Form of New Common Stock Certificate |
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10.1 |
Credit Agreement dated December 28, 2009 among Pilgrim's Pride Corporation, To-Ricos, Ltd. and To-Ricos Distribution, Ltd., CoBank, ACB, as administrative agent, and the lenders party thereto |
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99.1 |
Press release, dated December 28, 2009 |