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EXHIBIT 1.1
AGREEMENT
THIS AGREEMENT, made as of the 17th day of April, 2001, by and among PF
Management, Inc., a North Carolina corporation with offices in Hickory, North
Carolina (the "Corporation"), and Xxxxx X. Xxxxxxxxxx, Xx. ("Xxxxxxxxxx"), Xxxxx
X. Xxxxx ("Xxxxx"), and Xxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), hereinafter referred
to collectively as the "Shareholders."
W I T N E S S E T H
WHEREAS, Xxxxxxxxxx and Xxxxx are the Chairman and Vice Chairman,
respectively, of Pierre Foods, Inc. ("Pierre") and, prior to April 17, 2001,
exercised substantial control over approximately 45% of the outstanding shares
of Pierre common stock ("Pierre Stock"); and
WHEREAS, Xxxxxxxxxx and Xxxxx formed the Corporation for the purposes
of (i) consolidating the ownership of Pierre Stock previously owned by them
directly and through (x) HERTH Management, Inc. ("HERTH"), which had owned
approximately 21.2% of Pierre Stock, and (y) Columbia Hill, LLC, which had owned
approximately 45% of the common stock of HERTH and approximately 0.8% of Pierre
Stock, and (ii) to acquire all of the outstanding shares of Pierre Stock held by
the public shareholders of Pierre; and
WHEREAS, the Shareholders are owners of all of the outstanding shares
of common stock of the Corporation (the "PFMI Shares"), as set forth in a
Shareholders' Agreement dated April 17, 2001; and
WHEREAS, as a result of the efforts of Xxxxxxxxxx and Xxxxx, on April
17, 2001 the Corporation acquired 3,630,212 shares of Pierre Stock, representing
62.8% of the outstanding shares of Pierre; and
WHEREAS, the Corporation has entered into an Agreement and Plan of
Share Exchange, dated as of April 26, 2001, with Pierre, Xxxxxxxxxx and Xxxxx,
pursuant to which the Corporation intends to acquire the remaining shares of
Pierre Stock; and
WHEREAS, simultaneously with the Corporation's acquiring shares of
Pierre Stock on April 17, 2001, the Corporation issued the PFMI Shares to the
Shareholders, and the Shareholders became directors of PFMI;
WHEREAS, prior to April 17, 2001, Xxxxxxxxx owned approximately 11% of
the outstanding shares of HERTH, an entity that was controlled by Xxxxxxxxxx and
Xxxxx through their majority ownership of the equity interests in Columbia Hill,
LLC and Xxxxxxxxxx'x direct ownership of common stock of HERTH; and
WHEREAS, Xxxxxxxxxx and Xxxxx offered Xxxxxxxxx an opportunity to
continue his indirect investment in Pierre Stock by accepting, in exchange for
his shares of stock of HERTH, PFMI Shares representing 11.875% of the
outstanding shares of common stock of the Corporation; and
WHEREAS, Xxxxxxxxx did not materially influence the acquisition by the
Corporation of the Pierre Stock which Xxxxxxxxxx and Xxxxx effected on April 17;
2001, and desires that Xxxxxxxxxx and Xxxxx continue to control the Corporation
and its investment in Pierre Stock.
NOW, THEREFORE, the parties agree as follows:
1. Voting of PFMI Shares. With respect to all matters that are
submitted to a vote of the Shareholders, Xxxxxxxxx shall not exercise voting
discretion with respect to his PFMI Shares but rather shall vote his PFMI shares
as requested by Xxxxxxxxxx and Xxxxx; provided, that if Xxxxxxxxx receives
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conflicting requests from Xxxxxxxxxx and Xxxxx, he shall vote 60% of his PFMI
Shares as requested by Xxxxxxxxxx and 40% of his PFMI Shares as requested by
Xxxxx.
2. Disposition of Pierre Stock. Xxxxxxxxxx and Xxxxx shall have
the sole investment power and authority with respect to the Pierre Stock now
owned by the Corporation or acquired by the Corporation in the future, and
Xxxxxxxxx shall not influence or attempt to influence the disposition of such
Pierre Stock.
3. Transfer of PFMI Shares. Nothing in this Agreement shall
affect Xxxxxxxxx'x ability to transfer or otherwise dispose of his PFMI Shares,
which transfer or disposition shall be governed by the terms and provisions of
the Shareholders' Agreement, dated April 17, 2001, among the Corporation and the
Shareholders.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
signed by its President, attested to by its Secretary and its corporate seal
affixed hereto, and the Shareholders have hereunto set their hand and seal, all
as of the day and year written above.
ATTEST: PF MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
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Secretary President
/s/ Xxxxxxxxx X. XxXxxx /s/ Xxxxx X. Xxxxxxxxxx, Xx.(SEAL)
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Witness Xxxxx X. Xxxxxxxxxx, Xx.
/s/ Xxxxxxxxx X. XxXxxx /s/ Xxxxx X. Xxxxx (SEAL)
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Witness Xxxxx X. Xxxxx
/s/ Xxxxxxxxx X. XxXxxx /s/ Xxxxx X. Xxxxxxxxx (SEAL)
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Witness Xxxxx X. Xxxxxxxxx
