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PIERRE FOODS, INC.
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD , 2001
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To Our Shareholders:
Notice is hereby given that a special meeting of shareholders of Pierre
Foods, Inc. will be held on , , 2001 at 10:00 a.m., local time,
at the offices of Foley & Lardner, 150 West Jefferson Avenue, Suite 1000,
Detroit, MI 48226-4416, for the following purposes:
- to consider and vote on a proposal to adopt and approve the plan of share
exchange included in an Agreement and Plan of Share Exchange, dated as of
April 26, 2001, under which PF Management, Inc., a newly-formed company
majority-owned and controlled by James C. Richardson, Jr. and David R.
Clark, Pierre Foods' Chairman and Vice-Chairman, respectively, will
become the owner of all of the outstanding shares of Pierre Foods common
stock and under which each Pierre Foods shareholder (other than PF
Management) will become entitled to receive $1.21 in cash for each
outstanding share of Pierre Foods common stock. A copy of this exchange
agreement is attached to the accompanying proxy statement as Appendix A
and is described in the proxy statement.
- to consider and act upon any other matters as may properly come before
the special meeting or any adjournment thereof, including any motion to
adjourn for the purpose of soliciting additional proxies.
The board of directors has determined that only holders of Pierre Foods
common stock of record at the close of business on , 2001 will be
entitled to notice of, and to vote at, the special meeting, including any
adjournment.
By Order of the Board of
Directors,
PAMELA M. WITTERS
Chief Financial Officer,
Secretary and Treasurer
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU CAN ATTEND THE SPECIAL MEETING, PLEASE DATE, SIGN AND
RETURN THE ACCOMPANYING PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PLEASE DO NOT SEND IN ANY
CERTIFICATES FOR YOUR SHARES OF COMMON STOCK AT THIS TIME. IF THE EXCHANGE IS
APPROVED, THEN INSTRUCTIONS REGARDING THE EXCHANGE OF YOUR SHARES FOR THE CASH
EXCHANGE CONSIDERATION WILL FOLLOW.
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TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET.......................................... 1
AVAILABLE INFORMATION....................................... 5
WHO CAN HELP ANSWER YOUR QUESTIONS.......................... 5
THE SPECIAL MEETING......................................... 6
Time, Place and Date; Proxy Solicitation.................. 6
Record Date and Quorum Requirement........................ 6
Required Vote; Voting Procedures.......................... 6
Voting and Revocation of Proxies.......................... 6
Effective Time............................................ 7
Payment of Exchange Consideration and Surrender of Stock
Certificates........................................... 7
Dissenters' Rights of Appraisal........................... 7
Other Matters to be Considered at the Special Meeting..... 9
SPECIAL FACTORS............................................. 9
Background of the Exchange................................ 9
Recommendation of the Special Committee and the Board of
Directors.............................................. 20
Opinion of Pierre Foods' Financial Advisor................ 26
Projections............................................... 34
Valuation Analysis of PF Management's Financial Advisor... 34
Conflicts of Interest..................................... 39
Purpose and Reasons of the MBO Group for the Exchange..... 40
Position of the MBO Group as to Fairness of the
Exchange............................................... 41
EFFECTS OF THE EXCHANGE..................................... 42
THE EXCHANGE................................................ 42
Acquisition of Pierre Foods............................... 43
Conversion of Securities.................................. 43
Treatment of Options...................................... 43
Time of Closing........................................... 43
Transfer of Shares........................................ 43
Conditions................................................ 44
Financing of the Exchange................................. 44
Representations and Warranties............................ 45
Covenants................................................. 45
Nonsolicitation Covenant.................................. 45
Indemnification and Insurance............................. 46
Expenses.................................................. 46
Termination, Amendment and Waiver......................... 46
Termination Fee........................................... 47
Regulatory Approvals...................................... 47
Accounting Treatment...................................... 47
FEES AND EXPENSES........................................... 47
FEDERAL INCOME TAX CONSEQUENCES............................. 47
INFORMATION REGARDING PIERRE FOODS.......................... 48
Incorporation Of Documents By Reference................... 49
Management................................................ 50
Selected Consolidated Financial Data...................... 51
Stock Ownership........................................... 53
Market Prices of Common Stock; Dividends.................. 54
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PAGE
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INFORMATION REGARDING PF MANAGEMENT......................... 55
Recent Stock Purchases.................................... 55
Management................................................ 56
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS........ 56
INDEPENDENT AUDITORS........................................ 58
SHAREHOLDER PROPOSALS....................................... 58
OTHER MATTERS............................................... 59
APPENDICES
Agreement and Plan of Share Exchange...................... Appendix A
Opinion of Grant Thornton LLP............................. Appendix B
Pierre Foods' Annual Report on Form 10-K, as Amended and
Restated............................................... Appendix C
North Carolina Dissenters' Rights Statutes................ Appendix D
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