**Exhibit 2**

AGREEMENT AND PLAN OF MERGER

Among

PILGRIM’S PRIDE CORPORATION, 

PPC ACQUISITION CORP. 

and 

WLR FOODS, INC.Dated September 27, 2000

**TABLE OF CONTENTS**

Section                                                                                                                                                         PageARTICLE I          THE MERGER ......................................................................................................................1           1.01.     The Merger .................................................................................................................................1           1.02.     Effective Time; Closing ................................................................................................................1           1.03.     Effect of the Merger .....................................................................................................................2           1.04.     Articles of Incorporation; Bylaws .................................................................................................2           1.05.     Directors and Officers ..................................................................................................................2ARTICLE II         CONVERSION OF SECURITIES;EXCHANGE OF CERTIFICATES ...............................2           2.01.     Conversion of Securities ...............................................................................................................2           2.02.     Employee Stock Options; Warrants ..............................................................................................3           2.03.     Surrender of Shares; Stock Transfer Books ..................................................................................3ARTICLE III        REPRESENTATIONS AND WARRANTIES OFTHE TARGET .........................................5           3.01.     Organization, Qualification and Corporate Power; Subsidiaries ......................................................5           3.02.     Articles of Incorporation and Bylaws ............................................................................................6           3.03.     Capitalization ...............................................................................................................................6           3.04.     Authority Relative to This Agreement ............................................................................................7           3.05.     No Conflict; Required Filings and Consents ..................................................................................7           3.06.     Permits; Compliance ....................................................................................................................8           3.07.     SEC Filings; Financial Statements .................................................................................................8           3.08.     Absence of Certain Changes or Events .........................................................................................9           3.09.     Absence of Litigation .................................................................................................................10           3.10.     Employee Benefit Plans; Agreements ..........................................................................................10           3.11.     Labor Matters ...........................................................................................................................12           3.12.     Taxes ........................................................................................................................................13           3.13.     Environmental Matters ...............................................................................................................13           3.14.     Opinion of Financial Advisor ......................................................................................................16           3.15.     Brokers .....................................................................................................................................16           3.16.     Tangible Property ......................................................................................................................17           3.17.     Real Property ............................................................................................................................17           3.18.     Intellectual Property ...................................................................................................................19           3.19.     Board Recommendation; State Takeover Statutes ......................................................................19           3.20.     Contracts ..................................................................................................................................19           3.21.     Inventory ...................................................................................................................................20           3.22.     Product Liability .........................................................................................................................20           3.23.     Customers .................................................................................................................................21           3.24.     Insurance ...................................................................................................................................21           3.25.     Proxy Statement .........................................................................................................................21           3.26.     Rights Agreement. ......................................................................................................................21           3.27.     Fees and Expenses of Transactions .............................................................................................22ARTICLE IV         REPRESENTATIONS AND WARRANTIESOF ACQUIROR AND ACQUIROR SUB .22           4.01.     Corporate Organization ..............................................................................................................22           4.02.     Authority Relative to This Agreement ..........................................................................................22           4.03.     No Conflict; Required Filings and Consents ................................................................................22           4.04.     Proxy Statement .........................................................................................................................23           4.05.     Acquiror and Acquiror Sub Holdings in Company Stock .............................................................23           4.06.     Financing ...................................................................................................................................23ARTICLE V          CONDUCT OF BUSINESSPENDING THE MERGER ...................................................24           5.01.     Conduct of Business by the Target Pending the Merger ..............................................................24ARTICLE VI         ADDITIONAL AGREEMENTS ........................................................................................25           6.01.     Stockholders’ Meeting ..............................................................................................................25           6.02.     Proxy Statement ........................................................................................................................26           6.03.     Appropriate Action; Consents; Filings ........................................................................................26           6.04.     Access to Information; Confidentiality ........................................................................................27           6.05.     No Solicitation of Transactions ..................................................................................................27           6.06.     Directors’ and Officers’ Indemnification .....................................................................................28           6.07.     Obligations of Acquiror Sub ......................................................................................................29           6.08.     Public Announcements ..............................................................................................................30           6.09.     Delivery of SEC Documents ......................................................................................................30           6.10.     Notification of Certain Matters ..................................................................................................30           6.11.     Further Action ..........................................................................................................................30           6.12.     Postponement of Annual Meeting ..............................................................................................30           6.13.     Letters of Accountants ..............................................................................................................30           6.14.     Continuation of Benefits ............................................................................................................31           6.15.     Severance Policy and Other Agreements ...................................................................................31           6.16.     Grower Relations ......................................................................................................................31           6.17.     Environmental Assessments .......................................................................................................31ARTICLE VII        CONDITIONS TO THE MERGER ..................................................................................32           7.01.     Conditions to the Obligations of Each Party ...............................................................................32           7.02.     Conditions to the Obligations of Acquiror and Acquiror Sub ......................................................33           7.03.     Conditions to the Obligations of the Target ................................................................................34ARTICLE VIII       TERMINATION, AMENDMENT AND WAIVER ..........................................................34           8.01.     Termination ..............................................................................................................................34           8.02.     Fees and Expenses ...................................................................................................................36           8.03.     Amendment ..............................................................................................................................37           8.04.     Waiver .....................................................................................................................................37ARTICLE IX          GENERAL PROVISIONS ...............................................................................................38           9.01.     Non-Survival of Representations, Warranties and Agreements ...................................................38           9.02.     Notices ....................................................................................................................................38           9.03.     Certain Definitions ....................................................................................................................39           9.04.     Severability ..............................................................................................................................40           9.05.     Assignment; Binding Effect; Benefit ...........................................................................................40           9.06.     Incorporation of Schedules .......................................................................................................40           9.07.     Specific Performance ...............................................................................................................40           9.08.     Governing Law ........................................................................................................................40           9.09.     Headings .................................................................................................................................41           9.10.     Counterparts ...........................................................................................................................41           9.11.     Waiver of Jury Trial .................................................................................................................41           9.12.     Entire Agreement .....................................................................................................................41

**DEFINED TERMS**

Term                                                                                                     LocationAcquiror                                                                                               Introductory paragraphAcquiror Expenses                                                                                8.02Acquiror Sub                                                                                        Introductory paragraphaffiliate                                                                                                  9.03Agreement                                                                                            Introductory paragraphAlternative Proposal Fee                                                                       8.02Articles of Merger                                                                                 1.02beneficial owner                                                                                    9.03Blue Sky Laws                                                                                     3.05Business Combination Transaction                                                         8.02business day                                                                                         9.03Certificates                                                                                           2.03Claim                                                                                                   3.09Cleanup                                                                                               3.13Closing                                                                                                1.02Code                                                                                                   3.10Company                                                                                             Introductory paragraphCompany Banker                                                                                 3.14Company Class B Common Stock                                                       3.03Company Common Stock                                                                    2.01Company Disclosure Schedule                                                              Article IIICompany Employment Contracts                                                          3.10Company Expenses                                                                              8.02Company Options                                                                                2.02Company Permits                                                                                 3.06Company Plans                                                                                    3.03Company Preferred Stock                                                                    3.03Company SEC Reports                                                                        3.07Company Shareholders’ Meeting                                                          6.01Company Subsidiary                                                                            3.01Company Warrants                                                                              3.03Confidentiality Agreement                                                                     6.04Corporation Commission                                                                      1.02Effective Time                                                                                      1.02Environment                                                                                         3.13Environment, Health and Safety Liabilities                                             3.13Environmental Law                                                                               3.13ERISA                                                                                                 3.10Exchange Act                                                                                       3.05Facility                                                                                                 3.13GAAP                                                                                                 3.07Governmental Authority                                                                        3.06Hazardous Activity                                                                               3.13Hazardous Material                                                                              3.13HSR Act                                                                                              3.05Indemnified Parties                                                                               6.06Intellectual Property                                                                              3.18IRS                                                                                                      3.10Laws                                                                                                    3.05Major Customers                                                                                 3.23Material Adverse Effect                                                                        3.01Material Contract                                                                                 3.19Merger                                                                                                RecitalsMerger Consideration                                                                          2.01Most Recent Balance Sheet                                                                 3.07Most Recent Financial Statements                                                        3.07Occupational Safety and Health Law                                                    3.13Order                                                                                                  3.09Paying Agent                                                                                       2.03person                                                                                                 9.03Phase I Assessment                                                                             6.17Phase II Assessment                                                                            6.17Plans                                                                                                   3.10Proxy Statement                                                                                  3.25Release                                                                                               3.13Rights Agreement                                                                                3.26SEC                                                                                                    2.03Securities Act                                                                                      3.07Security Interest                                                                                  3.17Shares                                                                                                2.01subsidiaries                                                                                         9.03subsidiary                                                                                           9.03Surviving Corporation                                                                         1.01Takeover Proposal                                                                             6.05Terminating Acquiror Breach                                                              8.01Terminating Company Breach                                                             8.01Third Party Provisions                                                                         9.05Transactions                                                                                       RecitalsVirginia Law                                                                                       Recitals

                   AGREEMENT AND PLAN OF MERGER, dated as of September 27, 2000 (this “Agreement”),by and among Pilgrim’s Pride Corporation, a Delaware corporation (“Acquiror”),PPC Acquisition Corp., a Virginia corporation and a direct, wholly owned subsidiary ofAcquiror (“Acquiror Sub”), and WLR Foods, Inc., a Virginia corporation(the “Company”). 

                   WHEREAS, Acquiror Sub, upon the terms and subject to the conditions of this Agreement andin accordance with the Stock Corporation Act of the Commonwealth of Virginia (“VirginiaLaw”), will merge with and into the Company (the “Merger”); 

                   WHEREAS, the Board of Directors of the Company has unanimously (i) determined that theMerger is in the best interests of the Company and its shareholders and approved andadopted this Agreement and the transactions contemplated hereby (the “Transactions”)and (ii) recommended approval and adoption of this Agreement and approval of the Mergerby, and directed that this Agreement and the Merger be submitted to a vote of, theshareholders of the Company; and 

                   WHEREAS, the Boards of Directors of Acquiror and Acquiror Sub have determined that theMerger is in the best interests of Acquiror, Acquiror Sub and their stockholders and haveapproved and adopted this Agreement and the Transactions. 

                   NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreementsherein contained, and intending to be legally bound hereby, Acquiror, Acquiror Sub and theCompany hereby agree as follows: 

**ARTICLE I**

**THE MERGER**

                   SECTION 1.01.  The Merger. Upon the terms and subject to the conditions setforth in this Agreement, and in accordance with Virginia Law, at the Effective Time (ashereinafter defined), Acquiror Sub shall be merged with and into the Company. As a resultof the Merger, the separate corporate existence of Acquiror Sub shall cease and theCompany shall continue as the surviving corporation of the Merger (the “SurvivingCorporation”). The name of the Surviving Corporation shall be Pilgrim’sPride Corporation of Virginia, Inc. 

                   SECTION 1.02.  Effective Time; Closing. As promptly as practicable and in noevent later than the twentieth business day following the satisfaction or waiver of theconditions set forth in Article VII (or such other date as may be agreed in writing byeach of the parties hereto), the parties hereto shall cause the Merger to be consummatedby filing articles of merger (the “Articles of Merger”) with the StateCorporation Commission of the Commonwealth of Virginia (the “CorporationCommission”) in such form as is required by, and executed in accordance with therelevant provisions of, Virginia Law. The term “Effective Time” means thedate and time of the approval of the Articles of Merger by the Corporation Commission (orsuch later time as may be agreed in writing by each of the parties hereto and specified inthe Articles of Merger). Immediately prior to the filing of the Articles of Merger, aclosing (the “Closing”) will be held at the offices of Baker &McKenzie in Dallas, Texas (or such other place and time as the parties may agree). 

                   SECTION 1.03.  Effect of the Merger. The effect of the Merger shall be asprovided in the applicable provisions of Virginia Law. 

                   SECTION 1.04.  Articles of Incorporation; Bylaws. (a) At the Effective Time,the Articles of Incorporation of the Company, as in effect immediately prior to theEffective Time, shall be amended as of the Effective Time by operation of this Agreementand by virtue of the Merger without any further action by the shareholders or directors ofthe Surviving Corporation to read the same in its entirety the Articles of Incorporationof Acquiror Sub, as in effect immediately prior to the Effective Time, except that Article1 thereof shall be amended to read in its entirety as follows: "1. The name of thecorporation is Pilgrim’s Pride Corporation of Virginia, Inc." 

                   (b)      At the Effective Time, the Bylaws of Acquiror Sub, as ineffect immediately prior to the Effective Time, shall be the Bylaws of the SurvivingCorporation until thereafter amended as provided by law, the Articles of Incorporation ofthe Surviving Corporation and such Bylaws. 

                   SECTION 1.05.  Directors and Officers. The directors of Acquiror Subimmediately prior to the Effective Time shall be the initial directors of the SurvivingCorporation, each to hold office in accordance with the Articles of Incorporation andBylaws of the Surviving Corporation until a successor is elected or appointed and hasqualified or until the earliest of such director’s death, resignation, removal ordisqualification, and the officers of the Company (other than the Chief Executive Officerand Chief Financial Officer) immediately prior to the Effective Time and the ChiefExecutive Officer and Chief Financial Officer of Acquiror Sub immediately prior to theEffective Time shall be the initial officers of the Surviving Corporation, in each caseuntil their respective successors are duly elected or appointed and qualified, or asotherwise provided in the Bylaws of the Surviving Corporation. 

**ARTICLE II**

**CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES**

                   SECTION 2.01.  Conversion of Securities. At the Effective Time, by virtue ofthe Merger and without any action on the part of Acquiror Sub, the Company or the holdersof any of the following shares of capital stock:

                   (a)      Each share of Class A Common Stock, no par value, of theCompany (“Company Common Stock”; shares of Company Common Stock beinghereinafter collectively referred to as the “Shares”) issued andoutstanding immediately prior to the Effective Time (other than any Shares to be canceledpursuant to Section 2.01(b)) shall be canceled and shall be converted automatically intothe right to receive an amount equal to $14.25 in cash (the “Merger Consideration”)payable, without interest, to the holder of such Share, upon surrender, in the mannerprovided in Section 2.03, of the certificate that formerly evidenced such Share, less anyrequired withholding taxes;

                   (b)      Each Share held in the treasury of the Company and each Shareowned by Acquiror Sub, Acquiror or any direct or indirect wholly owned subsidiary ofAcquiror or of the Company immediately prior to the Effective Time shall becanceled without any conversion thereof and no payment or distribution shall be made withrespect thereto; and

                   (c)      Each share of Common Stock of Acquiror Sub issued andoutstanding immediately prior to the Effective Time shall be converted into and exchangedfor one validly issued, fully paid and nonassessable share of Common Stock, no par value,of the Surviving Corporation.

                   SECTION 2.02.  Employee Stock Options; Warrants. (a) At the Effective Time,each outstanding option to purchase Shares (a “Company Option”) grantedunder Company’s 1998 Long Term Incentive Plan and 1988 Long Term Incentive Plan,whether or not then exercisable, shall be canceled by the Company, and each holder of acanceled Company Option shall be entitled to receive no later than the later of (x) theEffective Time and (y) 10 days after the receipt of a release and waiver from such holderas described in the final sentence of this subsection (a), from the Surviving Corporation,in consideration for the cancellation of such Company Option, an amount in cash equal tothe product of (i) the number of Shares previously subject to such Company Option and (ii)the excess, if any, of the Merger Consideration over the exercise price per Sharepreviously subject to such Company Option, less any required withholding taxes. TheCompany shall obtain from each person named in Section 2.02 of the Company DisclosureSchedule, and shall use its best efforts to obtain from each other holder of a CompanyOption, a release and waiver effective as of the Effective Time of each such person’srights under the terms of any Company Option. 

                   (b)      At the Effective Time, pursuant to the terms of eachoutstanding warrant granted to First Union National Bank and Harris Trust and Savings Bank(a “Company Warrant”), each holder of a Company Warrant shall be entitledto receive promptly upon exercise thereof subsequent to the Closing from the SurvivingCorporation an amount in cash equal to the product of (i) the number of Shares previouslysubject to such Company Warrant and (ii) the excess, if any, of the Merger Considerationover the exercise price per Share previously subject to such Company Warrant, less anyrequired withholding taxes.

                   SECTION 2.03.  Surrender of Shares; Stock Transfer Books. (a) Prior to theEffective Time, Acquiror Sub shall designate a bank or trust company reasonablysatisfactory to the Company to act as agent (the “Paying Agent”) for theholders of Shares in connection with the Merger to receive the funds to which holders ofShares shall become entitled pursuant to Section 2.01(a). At the Effective Time, Acquirorshall cause the Surviving Corporation to have sufficient funds to deposit, and shall causethe Surviving Corporation to deposit in trust with the Paying Agent, cash in the aggregateamount equal to the product of (i) the number of Shares outstanding immediately prior tothe Effective Time (other than Shares owned by Acquiror or Acquiror Sub) and (ii) theMerger Consideration. Such funds shall be invested by the Paying Agent as directed by theSurviving Corporation, provided that such investments shall be in obligations of orguaranteed by the United States of America or of any agency thereof and backed by the fullfaith and credit of the United States of America, in commercial paper obligations ratedA-1 or P-1 or better by Moody’s Investors Services, Inc. or Standard &Poor’s Corporation, respectively, or in deposit accounts, certificates of deposit orbanker’s acceptances of, repurchase or reverse repurchase agreements with, orEurodollar time deposits purchased from, commercial banks with capital, surplus andundivided profits aggregating in excess of $100 million (based on the most recentfinancial statements of such bank which are then publicly available at the Securities andExchange Commission (the “SEC”) or otherwise); provided, however,that no loss on any investment made pursuant to this Section 2.03 shall relieve Acquiroror the Surviving Corporation of its obligation to pay the Merger Consideration for eachShare outstanding immediately prior to the Effective Time.

                   (b)      Promptly after the Effective Time, Acquiror shall cause theSurviving Corporation to mail to each person who was, at the Effective Time, a holder ofrecord of Shares entitled to receive the Merger Consideration pursuant to Section 2.01(a)a form of letter of transmittal (which shall specify that delivery shall be effected, andrisk of loss and title to the certificates evidencing such Shares (the “Certificates”)shall pass, only upon proper delivery of the Certificates to the Paying Agent) andinstructions for use in effecting the surrender of the Certificates pursuant to suchletter of transmittal. Upon surrender to the Paying Agent of a Certificate, together withsuch letter of transmittal, duly completed and validly executed in accordance with theinstructions thereto, and such other documents as may be required pursuant to suchinstructions, the holder of such Certificate shall be entitled to receive in exchangetherefor, subject to any required withholding taxes, the Merger Consideration for eachShare formerly evidenced by such Certificate, and such Certificate shall then be canceled.No interest shall accrue or be paid on the Merger Consideration payable upon the surrenderof any Certificate for the benefit of the holder of such Certificate. If payment of theMerger Consideration is to be made to a person other than the person in whose name thesurrendered Certificate is registered on the stock transfer books of the Company, it shallbe a condition of payment that the Certificate so surrendered shall be endorsed properlyor otherwise be in proper form for transfer and that the person requesting such paymentshall have paid all transfer and other taxes required by reason of the payment of theMerger Consideration to a person other than the registered holder of the Certificatesurrendered or shall have established to the satisfaction of the Surviving Corporationthat such taxes either have been paid or are not applicable. If a mutilated Certificate issurrendered to the Paying Agent or the holder of a Certificate submits an affidavit to thePaying Agent stating that the Certificate has been lost, destroyed or wrongfully taken,then such holder shall, if required by the Surviving Corporation, furnish an indemnitybond sufficient in the reasonable judgment of the Surviving Corporation to protectAcquiror, the Surviving Corporation and the Paying Agent from any loss that any of themmay suffer. The Surviving Corporation shall pay all charges and expenses, including thoseof the Paying Agent, in connection with the distribution of the Merger Consideration.

                   (c)      At any time following the sixth month after the EffectiveTime, the Surviving Corporation shall be entitled to require the Paying Agent to deliverto it any funds which had been made available to the Paying Agent and not disbursed toholders of Shares (including, without limitation, all interest and other income receivedby the Paying Agent in respect of all funds made available to it) and, thereafter, suchholders shall be entitled to look to the Surviving Corporation (subject to abandonedproperty, escheat and other similar laws) only as general creditors thereof with respectto any Merger Consideration that may be payable upon due surrender of the Certificatesheld by them. Notwithstanding the foregoing, neither the Surviving Corporation nor thePaying Agent shall be liable to any holder of a Share for any Merger Considerationproperly delivered in respect of such Share to a public official pursuant to any abandonedproperty, escheat or other similar law.

                   (d)      At the Effective Time, the stock transfer books of theCompany shall be closed and, thereafter, there shall be no further registration oftransfers of Shares on the records of the Company. From and after the Effective Time, theholders of Shares outstanding immediately prior to the Effective Time shall cease to haveany rights with respect to such Shares except as otherwise provided herein or byapplicable law.

**ARTICLE III**

**REPRESENTATIONS AND WARRANTIES OF THE COMPANY**

                   Except as set forth in the Disclosure Schedule delivered by the Company and signed by theCompany and Acquiror for identification prior to the execution and delivery of thisAgreement (the “Company Disclosure Schedule”), which shall be numbered insuch a way as to correspond with the section references below and the disclosure madeshall relate only to the representations and warranties made within the relevant section,the Company hereby represents and warrants to Acquiror and Acquiror Sub that: 

                   SECTION 3.01.  Organization, Qualification and Corporate Power; Subsidiaries.The Company is a corporation, and each subsidiary of the Company (a “CompanySubsidiary”) is a corporation or partnership, in each case duly organized,validly existing and in good standing under the laws of the jurisdiction of itsorganization and has the requisite corporate or partnership power and authority to own,lease and operate its properties and to carry on its business as it is now beingconducted. The Company and each Company Subsidiary are duly qualified or licensed as aforeign corporation or partnership to do business, and are in good standing, in eachjurisdiction where the character of the properties owned, leased or operated by them orthe nature of their business makes such qualification or licensing necessary, except forsuch failures to be so qualified or licensed and in good standing that could notreasonably be expected to have a Material Adverse Effect on the Company. As used in thisAgreement, the term “Material Adverse Effect” means with respect to anyperson, any change or effect that, individually or when taken together with all such otherchanges or effects, is materially adverse to the condition (financial or other), business,operations, properties, assets, liabilities or results of operations of such person andits subsidiaries, taken as a whole, or to the transactions contemplated by this Agreement.A true and correct list of all Company Subsidiaries, together with the jurisdiction oforganization of each Company Subsidiary and the percentage of the outstanding capitalstock or other equity interests of each Company Subsidiary owned by the Company and eachother Company Subsidiary, is set forth in Section 3.01 of the Company Disclosure Schedule.Except as disclosed in Section 3.01 of the Company Disclosure Schedule, the Company doesnot directly or indirectly own any equity or similar interest in, or any interestconvertible into or exchangeable or exercisable for any equity or similar interest in, anycorporation, partnership, joint venture or other business association or entity. 

                   SECTION 3.02.  Articles of Incorporation and Bylaws. The Company hasheretofore furnished to Acquiror a complete and correct copy of the Articles ofIncorporation and Bylaws or equivalent organizational documents, each as amended to date,of the Company and each Company Subsidiary. Neither the Company nor any Company Subsidiaryis in violation of any provision of its Articles of Incorporation, Bylaws or equivalentorganizational documents. 

                   SECTION 3.03.  Capitalization. The authorized capital stock of the Companyconsists of 100,000,000 shares of Company Common Stock, 100,000,000 shares of Class BCommon Stock, no par value (“Company Class B Common Stock”), and50,000,000 shares of preferred stock, no par value (“Company Preferred Stock”).As of September 26, 2000, (a) 16,203,403 shares of Company Common Stock were issued andoutstanding, all of which are validly issued, fully paid and nonassessable and not subjectto preemptive rights, (b) 700,750 shares of Company Common Stock were issuable pursuant tooutstanding Company Options and (c) 320,364 shares of Company Common Stock were issuablepursuant to outstanding Company Warrants. The number of Company Options and CompanyWarrants, and the exercise prices thereof, as of September 26, 2000, are set forth inSection 3.03 of the Company Disclosure Schedule. No shares of Company Class B Common Stockor Company Preferred Stock are issued and outstanding. Except as set forth in Section 3.03of the Company Disclosure Schedule, there are no options, warrants or other rights,agreements, arrangements or commitments of any character (including, without limitation,stock appreciation rights) relating to the issued or unissued capital stock of, or otherequity interests in, the Company or any Company Subsidiary obligating the Company or anyCompany Subsidiary to issue or sell any shares of capital stock of, or other equityinterests in, the Company or any Company Subsidiary or pay any amounts of money as aresult thereof. Between September 26, 2000 and the date of this Agreement, no shares ofCompany Common Stock have been issued by the Company, except shares issued pursuant to theCompany Plans (as defined below) and shares issued pursuant to the exercise of the CompanyOptions and Company Warrants, in each case in accordance with their respective terms as ineffect on the date hereof, and no Company Options have been granted. There are nooutstanding contractual obligations of the Company or any Company Subsidiary torepurchase, redeem or otherwise acquire any shares of Company Common Stock or any capitalstock of, or any equity interest in, any Company Subsidiary. No shareholder of the Companyor any Company Subsidiary will have any dissenter’s rights, rights of appraisal orsimilar rights under Virginia Law in connection with the Merger or the Transactions.Except as described in Section 3.03 of the Company Disclosure Schedule, each outstandingshare of capital stock of, or other equity interest in, each Company Subsidiary is dulyauthorized, validly issued, fully paid and nonassessable. The Company’s PoultryProducer Stock Purchase Plan, Amended and Restated Employee Stock Purchase Plan, DividendReinvestment and Stock Purchase Plan and Plan to Issue Stock for Director Compensation(collectively, the “Company Plans”) have been suspended, and no stockwill be issued under any such plan except as reflected in this Section 3.03. As of theEffective Time, the sum of the number of shares of Company Common Stock then outstandingplus the maximum number of shares of Company Common Stock then issuable (assumingacceleration of any vesting provisions) upon the exercise of Company Options and CompanyWarrants, shall not exceed 17,155,317, and no shares of Company Common Stock will beissuable pursuant to any of the Company Plans. The maximum amount payable by the Companypursuant to Sections 2.01 and 2.02 is $239,628,752. 

                   SECTION 3.04.  Authority Relative to This Agreement. The Company has allnecessary corporate power and authority to execute and deliver this Agreement and, withrespect to the Merger, upon the approval and adoption of this Agreement and the Merger bythe Company’s shareholders in accordance with this Agreement and Virginia Law, toperform its obligations hereunder and to consummate the Transactions. The execution anddelivery of this Agreement by the Company and the consummation by the Company of theTransactions have been duly and validly authorized by all necessary corporate action andno other corporate proceedings on the part of the Company are necessary to authorize thisAgreement or to consummate the Transactions (other than, with respect to the Merger, theapproval and adoption of this Agreement and the Merger by the holders of two thirds of thethen outstanding shares of Company Common Stock and the filing and recordation ofappropriate Articles of Merger with the Corporation Commission as required by VirginiaLaw). This Agreement has been duly and validly executed and delivered by the Company and,assuming the due authorization, execution and delivery of this Agreement by Acquiror andAcquiror Sub, constitutes a legal, valid and binding obligation of the Company,enforceable against the Company in accordance with its terms. 

                   SECTION 3.05.  No Conflict; Required Filings and Consents. (a) The executionand delivery of this Agreement by the Company do not, and the performance of thisAgreement by the Company will not, nor will the transfer of any assets by the Company orany Company Subsidiary, subject to (x) with respect to the Merger, obtaining the requisiteapproval and adoption of this Agreement and the Merger by the Company’s shareholdersin accordance with this Agreement and Virginia Law, and (y) obtaining the consents,approvals, authorizations and permits and making the filings described in Section 3.05(b)and Section 3.05(b) of the Company Disclosure Schedule, (i) conflict with or violate theArticles of Incorporation, Bylaws or equivalent organizational documents of the Company orany Company Subsidiary, (ii) conflict with or violate any domestic (federal, state orlocal) or foreign law, rule, regulation, order, judgment or decree (collectively, “Laws”)applicable to the Company or any Company Subsidiary or by which any property or asset ofthe Company or any Company Subsidiary is bound or affected, or (iii) except as specifiedin Section 3.05(a)(iii) of the Company Disclosure Schedule, result in any breach of orconstitute a default (or an event which with notice or lapse of time or both would becomea default) under, or give to others any right of termination, unilateral amendment,acceleration or cancellation of, or result in the creation of a lien or other encumbranceon any property or asset of the Company or any Company Subsidiary, or result in thepayment of any amounts as a result of such transactions, or require the consent of anythird party pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,license, permit, franchise or other instrument or obligation to which the Company or anyCompany Subsidiary is a party or by which the Company or any Company Subsidiary or anyproperty or asset of the Company or any Company Subsidiary is bound or affected, exceptfor such conflicts, violations, breaches, defaults, rights, liens and consents which couldnot reasonably be expected to have a Material Adverse Effect on the Company. 

                   (b)      The execution and delivery of this Agreement by the Companydo not, and the performance of this Agreement by the Company will not, require anyconsent, approval, authorization or permit of, or filing with or notification to, anygovernmental or regulatory authority, domestic or foreign, except (i) pursuant to theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), statesecurities or “blue sky” laws (“Blue Sky Laws”), theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”)and the rules and regulations promulgated thereunder, and filing and recordation ofappropriate Articles of Merger with the Corporation Commission as required by VirginiaLaw, (ii) as specified in Section 3.05(b) of the Company Disclosure Schedule and (iii)where failure to obtain such consents, approvals, authorizations or permits, or to makesuch filings or notifications, could not prevent or delay consummation of the Merger, orotherwise prevent the Company from performing its obligations under this Agreement. 

                   SECTION 3.06.  Permits; Compliance. Except as disclosed in Section 3.06 of theCompany Disclosure Schedule, each of the Company and the Company Subsidiaries is inpossession of all franchises, grants, authorizations, licenses, permits, easements,variances, exceptions, consents, certificates, approvals and orders of any United States(federal, state or local) or foreign government, or governmental, regulatory oradministrative authority, agency or commission or court of competent jurisdiction (“GovernmentalAuthority”) necessary for the Company or any Company Subsidiary to own, lease andoperate its properties or to carry on its business as it is now being conducted, exceptfor those which the failure to possess could not reasonably be expected to have a MaterialAdverse Effect on the Company (the “Company Permits”), and no suspensionor cancellation of any of the Company Permits is pending or, to the knowledge of theCompany, threatened. Except as disclosed in Section 3.06 of the Company DisclosureSchedule, the Company and each Company Subsidiary are in compliance in all materialrespects with all applicable Laws and Company Permits. 

                   SECTION 3.07.  SEC Filings; Financial Statements. (a) Except as set forth inSection 3.07(a) of the Company Disclosure Schedule, the Company has timely filed allforms, reports and documents required to be filed by it with the SEC since July 1, 1995(collectively, the “Company SEC Reports”). The Company SEC Reports (i)were prepared in all material respects in accordance with the requirements of theSecurities Act of 1933, as amended (the “Securities Act”), and theExchange Act, as the case may be, and the rules and regulations thereunder and (ii) didnot, at the time they were filed (or at the effective date thereof in the case ofregistration statements), contain any untrue statement of a material fact or omit to statea material fact required to be stated therein or necessary in order to make the statementsmade therein, in the light of the circumstances under which they were made, notmisleading. No Company Subsidiary is currently required to file any form, report or otherdocument with the SEC. 

                   (b)      The Company has delivered to Acquiror true and correct copiesof its audited financial statements as of and for the fiscal year ended July 1, 2000 (the“Most Recent Financial Statements”). Each of the Most Recent FinancialStatements and the financial statements (including, in each case, any notes thereto)contained in the Company SEC Reports was prepared in accordance with United Statesgenerally accepted accounting principles applied on a consistent basis (“GAAP”)throughout the periods indicated (except as may be indicated in the notes thereto andexcept that financial statements included with interim reports do not contain all GAAPnotes to such financial statements) and each fairly presented in all material respects thefinancial position, results of operations and changes in shareholders’ equity andcash flows of the Company as at the respective dates thereof and for the respectiveperiods indicated therein (subject, in the case of unaudited statements, to normal andrecurring year-end adjustments which were not and could not reasonably be expected to havea Material Adverse Effect on the Company). 

                   (c)      Except (i) to the extent set forth on the balance sheet as ofJuly 1, 2000 included in the Most Recent Financial Statements (the “Most RecentBalance Sheet”) of the Company and the consolidated Company Subsidiaries, or (ii)as set forth in Section 3.07(c) of the Company Disclosure Schedule, neither the Companynor any Company Subsidiary has any liability or obligation of any nature (whether accrued,absolute, contingent or otherwise) which would be required to be reflected on a balancesheet, or in the notes thereto, prepared in accordance with GAAP, except for liabilitiesand obligations incurred in the ordinary course of business consistent with past practicesince July 1, 2000, which would not, individually or in the aggregate, be material inamount. As of September 25, 2000, the aggregate amount of indebtedness for borrowed moneyof the Company and the Company Subsidiaries is $53,387,749. Other than for working capitalborrowed in the ordinary course of business in accordance with past practice, noadditional indebtedness for borrowed money has been incurred between September 25, 2000and the date hereof. 

                   (d)      The Company has heretofore furnished to Acquiror complete andcorrect copies of all amendments and modifications (if any) that have not been filed bythe Company with the SEC to all agreements, documents and other instruments thatpreviously had been filed by the Company as exhibits to the Company SEC Reports and arecurrently in effect. 

                   (e)      The receivables of the Company and the Company Subsidiaries,either reflected on the Most Recent Balance Sheet or created subsequent to July 1, 2000are, to the extent not previously collected in full, true and valid receivables, createdin the ordinary course of the business of the Company and the Company Subsidiaries. SinceJuly 1, 2000, neither the Company nor any Company Subsidiary has (i) permitted or agreedto any extension in the time for payment of receivables other than in the ordinary courseof business and consistent with past practice or (ii) changed its collection practiceswith respect to the receivables, including, without limitation, granted discounts inreturn for the early collection thereof other than in the ordinary course of business andconsistent with past practice. 

                   SECTION 3.08.  Absence of Certain Changes or Events. Since July 1, 2000,except as expressly contemplated by this Agreement or as disclosed pursuant to Section3.08 of the Company Disclosure Schedule, the Company and the Company Subsidiaries haveconducted their business only in the ordinary course and in a manner consistent with pastpractice and, since July 1, 2000, there has not been (a) any event or events (whether ornot covered by insurance) that could reasonably be expected to have a Material AdverseEffect on the Company, (b) any material change by the Company in its accounting methods,principles or practices, (c) any entry by the Company or any Company Subsidiary into anycommitment or transaction material to the Company, except in the ordinary course ofbusiness and consistent with past practice, (d) any declaration, setting aside or paymentof any dividend or distribution in respect of any capital stock or equity interests of theCompany or the Company Subsidiaries or any redemption, purchase or other acquisition ofany of the Company’s or the Company Subsidiaries’ securities, (e) any increasein, amendment to or establishment of any bonus, insurance, severance, deferredcompensation, pension, retirement, profit sharing, stock option, stock purchase or otheremployee benefit plan, (f) any general increase in compensation, bonus, severance ortermination pay or other benefits payable to the employees of the Company or the CompanySubsidiaries or, except for increases in the ordinary course of business in connectionwith periodic reviews and in amounts consistent with past practice, any specific increasein the compensation, bonus or other benefits payable to such employees, (g) any payment bythe Company or any Company Subsidiary of a bonus to any employee of the Company or anyCompany Subsidiary, (h) any operation of the business of the Company and the CompanySubsidiaries other than in the ordinary course, consistent with past practice; (i) anyincurrence of indebtedness for borrowed money or assumption or guarantee of indebtednessfor borrowed money by the Company or any Company Subsidiary (other than loans from theCompany to any wholly owned Company Subsidiary or from any wholly owned Company Subsidiaryto the Company or any other wholly owned Company Subsidiary), or the grant of any lien onthe assets of the Company or the Company Subsidiaries to secure indebtedness for borrowedmoney, (j) any sale or transfer of any assets of the Company or the Company Subsidiariesother than in the ordinary course of business and consistent with past practice, or (k)any loan, advance or capital contribution to or investment in any person in an aggregateamount in excess of $100,000 by the Company or any Company Subsidiary (excluding any loan,advance or capital contribution to, or investment in, the Company or any wholly ownedCompany Subsidiary). 

                   SECTION 3.09.  Absence of Litigation. Except as disclosed in Section 3.09(a)of the Company Disclosure Schedule, there is no claim, action, suit, proceeding orinvestigation (“Claim”) pending or, to the best knowledge of the Company,threatened against the Company or any Company Subsidiary, by, on behalf of or before anyarbitrator or Governmental Authority which (a) could reasonably be expected to have aMaterial Adverse Effect on the Company or (b) seeks to and is reasonably likely tosignificantly delay or prevent the consummation of the Merger. Except as disclosed inSection 3.09(b) of the Company Disclosure Schedule, there is no Claim pending or, to thebest knowledge of the Company, threatened against the Company or any Company Subsidiary,by, on behalf of or before any arbitrator or Governmental Authority. The Most RecentBalance Sheet included reasonable loss reserves with respect to each Claim disclosed inSection 3.09 of the Company Disclosure Schedule. Neither the Company or any CompanySubsidiary nor any property or asset of the Company or any Company Subsidiary is subjectto or in violation of any order, executive order, writ, stay, decree, judgment,determination, award or injunction (each an “Order”) that couldreasonably be expected to have a Material Adverse Effect on the Company.

                   SECTION 3.10.  Employee Benefit Plans; Agreements. (a) Section 3.10 of theCompany Disclosure Schedule lists all plans, programs and arrangements providing benefitsand maintained for the benefit of any current or former employee, officer or director ofthe Company or any Company Subsidiary, whether or not such plan, program or arrangement issubject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)(the “Plans”). The Company has given or made available to Acquiror a trueand complete copy of each Plan document, each material document prepared in connectionwith each Plan, including any applicable trust agreement, insurance contract or otherfunding medium, all amendments with respect to such Plan documents, the most recentsummary plan description, actuarial report, and determination letter issued by theInternal Revenue Service (“IRS”), Form 5500 with all related schedulesfiled for the prior three (3) years in respect of each such Plan subject to the annualreporting requirements of ERISA, and each Company Employment Contract (as defined herein).Neither the Company nor any Company Subsidiary presently (nor have they at any time in thepast) maintains, contributes to or has any liability (including current or potentialwithdrawal liability) with respect to any multi-employer plan within the meaning of ERISA.None of the Plans, other than those as described in Section 3.10(a) of the CompanyDisclosure Schedule, promises or provides retiree medical or life insurance benefits toany person other than continued medical coverage required under the Consolidated OmnibusBudget Reconciliation Act of 1985, as amended, the costs for which are borne by the formeremployee or beneficiary. Neither the Company nor any Company Subsidiary is a participatingemployer in any Plan to which more than one employer makes contributions. 

                   (b)      Each Plan complies, in both form and operation, in allmaterial respects, with its written terms, and, as applicable with ERISA, the InternalRevenue Code of 1986, as amended (the “Code”), and other applicable Law,and no condition exists or event has occurred with respect to any such Plan which wouldresult in any material liability, fine or penalty for the Company or any CompanySubsidiary. Each Plan is legally valid and binding and in full force and effect. Each Planthat is intended to be qualified under Section 401(a) of the Code has received a favorabledetermination letter from the IRS to the effect that it is so qualified and nothing hasoccurred since the date of such letter to affect the qualified status of such Plan. TheCompany has not incurred any direct or indirect material liability under, arising out ofor by operation of Title IV of ERISA in connection with the termination of, or withdrawalfrom, any Plan or other retirement plan or arrangement and, as of the date hereof, no factexists or event has occurred that could reasonably be expected to give rise to any suchliability. No Plan is or has been covered by Title IV of ERISA or Section 412 of the Code.No Plan is being audited or investigated by any government agency or subject to anypending or threatened Claim. Neither the Company nor any fiduciary of any Plan has engagedin a non-exempt prohibited transaction within the meaning of Section 406 of ERISA orSection 4975 of the Code. No event has occurred with respect to which the Company or anyCompany Subsidiary could be liable for a tax imposed by any of Sections 4972, 4976, 4977,4979, 4980 or 4980B of the Code, or for a civil penalty under Section 502(d) of ERISA. 

                   (c)      The Company and the Company Subsidiaries have complied in allmaterial respects with all Laws pertaining to employment practices, including wage andhour laws, the Americans with Disabilities Act, discrimination laws and the WorkerAdjustment Retraining Notification Act, and, except as disclosed in Section 3.10(c) of theCompany Disclosure Schedule, no fact or event exists that could give rise to liabilityunder such Laws, except for such occurrences, noncompliances and liabilities as could notreasonably be expected to have a Material Adverse Effect on the Company. 

                   (d)      Section 3.10 of the Company Disclosure Schedule sets forththe name of each officer or employee of the Company or any Company Subsidiary with anannual base compensation greater than $75,000, the annual base compensation applicable toeach such officer or employee and a complete and accurate list of each (the itemsdescribed in subsections (i) through (iv) below, collectively, the “CompanyEmployment Contracts”): 

                             (i)      employment, severance, or collective bargaining agreement notterminable without liability or obligation on 60 days' or less notice; 

                             (ii)     agreement with any director, affiliate, executive officer, orother key employee (or any member of the immediate family of any of the foregoing), agent,or contractor of the Company or any subsidiary of the Company, the benefits of which arecontingent, or the terms of which are materially altered, on the occurrence of atransaction involving the Company or any Company Subsidiary of the Company of the natureof any of the transactions contemplated by this Agreement or relating to an actual orpotential change in control of the Company or any Company Subsidiary, or providing anyterm of employment or other compensation guarantee or extending severance benefits orother benefits after termination not comparable to benefits available to employees,agents, or contractors generally; 

                             (iii)    agreement, plan, or arrangement under which any person may receivepayments that may be subject to the tax imposed by Section 4999 of the Code or included inthe determination of such person's “parachute payment” under Section 280G of theCode; and 

                             (iv)    agreement or plan, including any stock option plan, stock appreciationright plan, restricted stock plan, or stock purchase plan, any of the benefits of whichwill be increased, or the vesting of the benefits of which will be accelerated, by theoccurrence of any of the transactions contemplated by this Agreement or the value of anyof the benefits of which will be calculated on the basis of any of the transactionscontemplated by this Agreement. 

                   SECTION 3.11.  Labor Matters. Neither the Company nor any Company Subsidiaryis a party to any collective bargaining agreement or other labor union contract applicableto persons employed by the Company or any Company Subsidiary. Neither the Company nor anyCompany Subsidiary is the subject of any Claim which is pending, or to the Company’sknowledge, threatened, asserting that the Company or any Company Subsidiary has committedan unfair labor practice (within the meaning of the National Labor Relations Act orapplicable state statutes) or seeking to compel the Company or any Company Subsidiary tobargain with any labor organization as to wages or conditions of employment. No strike orother labor dispute involving the Company or any Company Subsidiary is pending or, to theCompany’s knowledge, threatened. To the Company’s knowledge, there is noactivity involving any employees of the Company or any Company Subsidiary seeking tocertify a collective bargaining unit or engaging in any other organizational activity. Tothe Company’s knowledge, as of the date hereof and except as described in Section3.11 of the Company Disclosure Schedule, no executive, key employee, or group of employeeshas any plans to terminate employment with the Company or any Company Subsidiary. 

                   SECTION 3.12.  Taxes. The Company and each of the Company Subsidiaries have(i) filed all federal, state, local and foreign tax returns required to be filed by themprior to the date of this Agreement (taking into account extensions), (ii) paid or accruedall taxes shown to be due on such returns and paid all applicable ad valorem and valueadded taxes as are due and (iii) paid or accrued all taxes for which a notice ofassessment or collection has been received (other than amounts being contested in goodfaith by appropriate proceedings), except in the case of clause (i), (ii) or (iii) for anysuch filings, payments or accruals which could not reasonably be expected to have aMaterial Adverse Effect on the Company. Except as set forth in Section 3.12 of the CompanyDisclosure Schedule, neither the IRS nor any other federal, state, local or foreign taxingauthority has asserted any Claim for taxes, or to the best knowledge of the Company, isthreatening to assert any Claims for taxes, which Claims could reasonably be expected tohave a Material Adverse Effect on the Company. The Company has open years for federal,state and foreign income tax returns only as set forth in Section 3.12 of the CompanyDisclosure Schedule. The Company and each Company Subsidiary have withheld or collectedand paid over to the appropriate governmental authorities (or are properly holding forsuch payment) all taxes required by law to be withheld or collected, except for amountswhich could not reasonably be expected to have a Material Adverse Effect on the Company.There are no liens for taxes upon the assets of the Company or any Company Subsidiary(other than liens for taxes that are not yet due or that are being contested in good faithby appropriate proceedings), except for liens which could not reasonably be expected tohave a Material Adverse Effect on the Company. 

                   SECTION 3.13.  Environmental Matters. (a) For purposes of this Agreement, thefollowing terms shall have the following meanings: (i) “Cleanup” meansany investigative, monitoring, cleanup, removal, containment or other remedial or responseaction required by any Environmental Law or Occupational Safety and Health Law, and theterms “removal,” “remedial” and “response action” includethe types of activities covered by the United States Comprehensive Environmental Response,Compensation, and Liability Act; (ii) “Environment” means soil, landsurface or subsurface strata, surface waters (including navigable water and ocean waters),groundwaters, drinking water supply, stream sediments, ambient air (including indoor air),plant and animal life and any other similar medium or natural resource; (iii) “Environmental,Health and Safety Liabilities” means any cost, damages, expense, liability,obligation or other responsibility (whether known or unknown, whether absolute, accrued,contingent, choate, inchoate or otherwise, whether due or to become due, and whether ornot required to be reflected on a balance sheet prepared in accordance with GAAP) arisingfrom or under Environmental Law or Occupational Safety and Health Law, including thoseconsisting of or relating to (1) any environmental, health or safety matter or condition(including on-site or off-site contamination, occupational safety and health andregulation of any chemical substance or product), (2) any fine, penalty, judgment, award,settlement, Claim, damages, loss, demand and response, investigative, monitoring, remedialor inspection cost or expense arising under Environmental Law or Occupational Safety andHealth Law, (3) financial responsibility under any Environmental Law or OccupationalSafety and Health Law for Cleanup costs or corrective action, (whether or not such Cleanuphas been required or requested by any Governmental Authority or other person) and for anynatural resource damage, or (4) any other compliance, corrective or remedial measuresrequired under any Environmental Law or Occupational Safety and Health Law; (iv) “EnvironmentalLaw” means the United States Comprehensive Environmental Response, Compensation,and Liability Act and any other Law that requires or relates to (1) advising appropriateGovernmental Authorities, employees or the public of intended or actual Releases ofHazardous Materials, violations of discharge or emission limits or other prohibitions andthe commencement of activities, such as resource extraction or construction, that couldhave significant impact on the Environment, (2) preventing or reducing to acceptablelevels the Release of Hazardous Materials into the Environment, (3) reducing thequantities, preventing the Release or minimizing the hazardous characteristics of wastesthat are generated, (4) assuring that products are designed, formulated, packaged and usedso that they do not present unreasonable risks to human health or the Environment whenused or disposed of, (5) protecting resources, species or ecological amenities, (6)reducing to acceptable levels the risks inherent in the transportation of HazardousMaterials or other potentially harmful substances, (7) Cleanup of Hazardous Materials thathave been Released, preventing the threat of Release or paying the costs of such Cleanupor prevention, or (8) making responsible parties pay private parties, or groups of them,for damages done to their health or the Environment, or permitting self-appointedrepresentatives of the public interest to recover for injuries done to public assets; (v)“Facility” means any real property (including all parcels and tracts ofland in which the Company and each Company Subsidiary have a fee simple estate or aleasehold estate, and all improvements, easements and appurtenances thereto) or tangiblepersonal property interest owned or operated by the Company and each Company Subsidiary,including such real property and tangible personal property used or operated by theCompany and each Company Subsidiary at the locations listed in Section 3.17(b) or (c) ofthe Company Disclosure Schedule, and, for purposes of this Section 3.13 and the definitionof “Hazardous Activity,” the term also includes any Real Property or tangiblepersonal property interest formerly owned or operated by the Company and each CompanySubsidiary or any predecessor person; (vi) “Hazardous Activity” means thedistribution, generation, handling, importing, management, manufacturing, processing,production, refinement, Release, storage, transfer, transportation, treatment or use(including any withdrawal or other use of groundwater) of Hazardous Materials in, on,under, about or from any of the Facilities or any part thereof into the Environment, andany other act, business, operation or thing that increases the danger, or risk of danger,or poses an unreasonable risk of harm to individuals or property on or off the Facilities,or that may affect the value of any of the Facilities or the assets of the Company and theCompany Subsidiaries; (vii) “Hazardous Material” means any waste or othersubstance that is listed, defined, designated, or classified as, or otherwise determinedto be, hazardous, radioactive, toxic, a pollutant or a contaminant under or pursuant toany Environmental Law, including any admixture or solution thereof, and specificallyincluding petroleum and all derivatives thereof or synthetic substitutes therefor andasbestos or asbestos-containing materials; (viii) “Occupational Safety and HealthLaw” means any Law designed to provide safe and healthful working conditions andto reduce occupational safety and health hazards, and any program, whether governmental orprivate (such as those promulgated or sponsored by industry associations and insurancecompanies), designed to provide safe and healthful working conditions; and (ix) “Release”means any spilling, leaking, emitting, discharging, depositing, escaping, leaching,dumping or other releasing into the Environment, whether intentional or unintentional. 

                   (b)      Except as described in Section 3.13 of the Company DisclosureSchedule, the Company and each Company Subsidiary are, and at all times have been, incompliance with, and have not been and are not in violation of or liable under, anyEnvironmental Law or Occupational Safety and Health Law. Except as described in Section3.13 of the Company Disclosure Schedule, the Company does not have any basis to expect,nor has the Company and each Company Subsidiary or any other person for whose conduct anyof them is or may be held responsible received, any actual or threatened Order, notice orother communication from (i) any Governmental Authority or other person acting in thepublic interest or (ii) the current or prior owner or operator of any Facility, of anyactual or potential violation or failure to comply with any Environmental Law, or of anyactual or threatened obligation to undertake or bear the cost of any Environmental, Healthand Safety Liabilities with respect to any Facility or other property or asset (whetherreal, personal or mixed) in which the Company or any Company Subsidiary has had aninterest, or with respect to any property or Facility at or to which Hazardous Materialswere generated, manufactured, refined, transferred, imported, used, or processed by theCompany or any Company Subsidiary or any other person for whose conduct it is or may beheld responsible, or from which Hazardous Materials have been transported, treated,stored, handled, transferred, disposed, recycled or received. 

                   (c)      Except as described in Section 3.13 of the Company DisclosureSchedule, there are no pending or, to the Company’s knowledge, threatened, Claims,charges, mortgages, liens, security interests or other restrictions of any nature,resulting from any Environmental, Health and Safety Liabilities or arising under orpursuant to any Environmental Law or Occupational Safety and Health Law, with respect toor affecting any Facilities or any other properties and assets (whether real, personal ormixed) in which the Company or any Company Subsidiary has or had an interest. 

                   (d)      Except as described in Section 3.13 of the Company DisclosureSchedule, the Company and each Company Subsidiary have no basis to expect, nor has it orany other person for whose conduct it is or may be held responsible, received, anycitation, directive, inquiry, notice, Order, summons, warning or other communication thatrelates to Hazardous Activity, Hazardous Materials or any actual, alleged, possible orpotential violation of or failure to comply with any Environmental Law or OccupationalSafety and Health Law, or of any actual, alleged, possible or potential obligation toundertake or bear the cost of any Environmental, Health and Safety Liabilities withrespect to any Facility or other property or asset (whether real, personal or mixed) inwhich the Company or any Company Subsidiary had an interest, or with respect to anyproperty or facility to or by which Hazardous Materials were generated, manufactured,refined, transferred, imported, used or processed by the Company or any Company Subsidiaryor any other person for whose conduct it is or may be held responsible, have beentransported, treated, stored, handled, transferred, disposed, recycled or received. 

                   (e)      Except as described in Section 3.13 of the Company DisclosureSchedule, neither the Company nor any Company Subsidiary nor any other person for whoseconduct it is or may be held responsible has any Environmental, Health and SafetyLiabilities with respect to any Facility or with respect to any other property or asset(whether real, personal or mixed) in which the Company or any Company Subsidiary (or anypredecessor), has or had an interest, or at any property geologically or hydrologicallyadjoining any Facility or any such other property or asset. 

                   (f)      Except as described in Section 3.13 of the Company DisclosureSchedule, no Hazardous Materials are present on or in the environment at any Facility orat any geologically or hydrologically adjoining property, including any HazardousMaterials contained in barrels, above or underground storage tanks, landfills, landdeposits, dumps, equipment (whether moveable or fixed) or other containers, eithertemporary or permanent, and deposited or located in land, water, sumps, or any other partof any Facility or such adjoining property, or incorporated into any structure therein orthereon. None of the Company, the Company Subsidiaries, each other person for whoseconduct any of them is or may be held responsible and to the Company’s knowledge anyother person, has permitted or conducted, or is aware of, any Hazardous Activity conductedwith respect to any Facility or other property or asset (whether real, personal or mixed)in which the Company or any Company Subsidiary has or had an interest. 

                   (g)      Except as described in Section 3.13 of the Company DisclosureSchedule, there has been no Release or, to the Company’s knowledge, threat ofRelease, of any Hazardous Materials at or from any Facility or at any other location whereany Hazardous Materials were generated, manufactured, refined, transferred, produced,imported, used or processed from or by any Facility, or from any other property or asset(whether real, personal or mixed) in which the Company or any Company Subsidiary has orhad an interest, or any geologically or hydrologically adjoining property, whether by theCompany, any Company Subsidiary or any other person. 

                   (h)      The Company and each Company Subsidiary have delivered ormade available to Acquiror true and complete copies and results of any reports, studies,analyses, tests or monitoring possessed or initiated by the Company and each CompanySubsidiary pertaining to Hazardous Materials or Hazardous Activities in, on, or under anyFacilities, or concerning compliance by the Company, any Company Subsidiary, or any otherperson for whose conduct they are or may be held responsible, with Environmental andOccupational Safety and Health Laws. 

                   SECTION 3.14.  Opinion of Financial Advisor. The Company has received thewritten opinion of BMO Nesbitt Burns Corp. (“Company Banker”) on the dateof this Agreement to the effect that the consideration to be paid by Acquiror in theMerger is fair from a financial point of view to the Company’s shareholders (otherthan Acquiror, Acquiror Sub and their affiliates) as of the date thereof. 

                   SECTION 3.15.  Brokers. No broker, finder or investment banker (other thanCompany Banker) is entitled to any brokerage, finder’s or other fee or commission inconnection with the Transactions based upon arrangements made by or on behalf of theCompany or any Company Subsidiary. The Company has heretofore furnished to Acquiror acorrect copy of all agreements between the Company and Company Banker pursuant to whichsuch firm would be entitled to any payment relating to the Transactions. 

                    SECTION 3.16.  Tangible Property. The Company and the Company Subsidiarieshave good and marketable title to all of their tangible properties and assets required toconduct their respective businesses, with only such exceptions as could not reasonably beexpected to have a Material Adverse Effect on the Company. All of the assets of theCompany and the Company Subsidiaries have been maintained and repaired for their continuedoperation and are in good operating condition, reasonable wear and tear excepted, andusable in the ordinary course of business, except where the failure to be in such repairor condition or so usable could reasonably be expected to have a Material Adverse Effecton the Company. 

                   SECTION 3.17.  Real Property. (a) For purposes of this Agreement, the term“Security Interest” means any mortgage, pledge, lien, encumbrance,charge, or other security interest, other than (A) mechanic's, materialmen's, and similarliens, (B) liens for taxes not yet due and payable or for taxes that the taxpayer iscontesting in good faith through appropriate proceedings and (C) purchase money liens andliens securing rental payments under capital lease arrangements. 

                   (b)      Section 3.17(b) of the Company Disclosure Schedule lists anddescribes briefly all real property that the Company or any Company Subsidiary owns orowned within the last three years. With respect to each such parcel of owned real propertythat the Company or any Company Subsidiary owns, except as disclosed in Section 3.17(b) ofthe Company Disclosure Schedule, (i) the identified owner has good and marketable title tothe parcel of real property, free and clear of any Security Interest, easement, covenant,or other restriction, except for installments of special assessments not yet delinquentand recorded easements, covenants, and other restrictions which do not impair the currentuse, occupancy, or value, or the marketability of title, of the property subject thereto;(ii) there are no pending or, to the knowledge of the Company, threatened specialassessments, condemnation proceedings, Claims or administrative actions relating to theproperty or other matters adversely affecting the current use, occupancy, or valuethereof; (iii) the legal description for the parcel contained in the deed thereofdescribes such parcel fully and adequately, the buildings and improvements are locatedwithin the boundary lines of the described parcels of land, are not in violation ofapplicable setback requirements, zoning laws, and ordinances (and none of the propertiesor buildings or improvements thereon are subject to "permitted non-conforminguse" or "permitted non-conforming structure" classifications), and do notencroach on any easement which may burden the land, and the land does not serve anyadjoining property for any purpose inconsistent with the use of the land, and the propertyis not located within any flood plain or subject to any similar type restriction for whichany permits or licenses necessary to the use thereof have not been obtained; (iv) allfacilities have received all approvals of Governmental Authorities (including licenses andpermits) required in connection with the ownership or operation thereof and have beenoperated and maintained in all material respects in accordance with applicable Laws; (v)there are no leases, subleases, licenses, concessions, or other agreements, written ororal, granting to any party or parties the right of use or occupancy of any portion of theparcel of real property; (vi) there are no outstanding options or rights of first refusalto purchase the parcel of real property, or any portion thereof or interest therein; (vii)there are no parties (other than the Company and each Company Subsidiary) in possession ofthe parcel of real property; (viii) all facilities located on the parcel of real propertyare supplied with utilities and other services necessary for the operation of suchfacilities, including gas, electricity, water, telephone, sanitary sewer, and storm sewer,all of which services are adequate in accordance with all applicable laws, ordinances,rules, and regulations and are provided via public roads or via permanent, irrevocable,appurtenant easements benefiting the parcel of real property; (ix) each parcel of realproperty abuts on and has direct vehicular access to a public road, or has access to apublic road via a permanent, irrevocable, appurtenant easement benefiting the parcel ofreal property, and access to the property is provided by paved public right-of-way withadequate curb cuts available; and (x) to the knowledge of the Company, all buildings,other improvements and facilities owned by the Company or any Company Subsidiary arestructurally sound, are in good operating condition and repair, and are free from materialdefects, and such buildings, other improvements and facilities are sufficient for thecontinued conduct of the business of the Company after the consummation of thistransaction in substantially the same manner as conducted before the consummation of thistransaction. 

                   (c)       Section 3.17(c) of the Disclosure Schedule lists anddescribes briefly all real property leased or subleased to the Company or any CompanySubsidiary. The Company has delivered to the Acquiror correct and complete copies of theleases and subleases listed in Section 3.17(c) of the Company Disclosure Schedule. Withrespect to each such lease and sublease, except as disclosed in Section 3.17(c) of theCompany Disclosure Schedule: (i) such lease or sublease is legal, valid, binding,enforceable, and in full force and effect; (ii) such lease or sublease will continue to belegal, valid, binding, enforceable, and in full force and effect on identical termsfollowing the consummation of the transactions contemplated hereby; (iii) no party to thelease or sublease is in breach or default, and no event has occurred which, with notice orlapse of time, would constitute a breach or default or permit termination, modification,or acceleration thereunder; (iv) no party to the lease or sublease has repudiated anyprovision thereof; (v) there are no disputes, oral agreements, or forbearance programs ineffect as to the lease or sublease; (vi) with respect to each sublease, therepresentations and warranties set forth in subsections (i) through (v) above are true andcorrect with respect to the underlying lease; (vii) neither the Company nor any CompanySubsidiary has assigned, transferred, conveyed, mortgaged, deeded in trust, or encumberedany interest in the leasehold or subleasehold; (viii) all facilities leased or subleasedthereunder have received all approvals of Governmental Authorities (including licenses andpermits) required in connection with the operation thereof and have been operated andmaintained in all material respects in accordance with applicable Laws; (ix) allfacilities leased or subleased thereunder are supplied with utilities and other servicesnecessary for the operation of said facilities; (x) the owner of the facility leased orsubleased has good and marketable title to the parcel of real property; and (xi) to theknowledge of the Company, all buildings, other improvements and facilities leased by theCompany or any Company Subsidiary are structurally sound, are in good operating conditionand repair, and are free from material defects, and such buildings, other improvements andfacilities are sufficient for the continued conduct of the business of the Company afterthe consummation of this transaction in substantially the same manner as conducted beforethe consummation of this transaction. 

                   SECTION 3.18.  Intellectual Property. The Company and the Company Subsidiariesown or have a valid license to use all inventories, patents, trademarks, service marks,trade names, copyrights, trade secrets, software, mailing lists and other intellectualproperty rights (collectively, the “Intellectual Property”) necessary tocarry on their respective businesses as currently conducted; and neither the Company norany Company Subsidiary has received any notice of infringement of or conflict with, and,to the Company’s knowledge, there are no infringements of or conflicts with, therights of others with respect to the use of any of the Intellectual Property that, ineither such case, has had or could reasonably be expected to have a Material AdverseEffect on the Company. 

                   SECTION 3.19. Board Recommendation; State Takeover Statutes. At a meeting dulycalled and held in compliance with Virginia Law, the Board of Directors of the Company hasunanimously adopted a resolution that, in accordance with the directors’ good faithbusines judgment of the best interests of the Company, (i) the Merger is approved and (ii)this Agreement and the Transactions are approved and recommending approval and adoption ofthis Agreement and the Transactions by the shareholders of the Company. Such approval issufficient to render inapplicable to the Merger and the other Transactions the provisionsof Section 13.1-728.1 of Virginia Law. No other state takeover statute or similar statuteor regulation applies or purports to apply to the Merger, this Agreement or anyTransaction, and no provision of the articles of incorporation, bylaws or other governinginstruments of the Company or any Company Subsidiary would, directly or indirectly,restrict or impair the ability of Acquiror to vote, or otherwise to exercise the rights ofa stockholder with respect to, shares of the Company and the Company Subsidiaries that maybe acquired or controlled by Acquiror. 

                   SECTION 3.20.  Contracts. (a) Section 3.20(a) of the Company DisclosureSchedule lists each contract to which the Company or any Company Subsidiary is a party(each such contract referred to in subsections (i) through (vi) below, a “MaterialContract”): (i) that is required by its terms or is currently expected to resultin the payment or receipt by the Company or any Company Subsidiary of more than $100,000;(ii) for the purchase or sale of raw materials, commodities, supplies, products, or otherpersonal property, or for the furnishing or receipt of services, the performance of whichwill extend over a period of more than one year, result in a material loss to the Companyor any Company Subsidiary, or involve consideration in excess of $100,000; (iii) underwhich the consequences of a default or termination could reasonably be expected to have aMaterial Adverse Effect on the Company (each of which is identified in Section3.20(a)(iii) of the Company Disclosure Schedule); (iv) all material agreements relating tojoint ventures, partnerships and equity or debt investments (each of which is identifiedin Section 3.20(a)(iv) of the Company Disclosure Schedule); (v) all noncompetitionagreements, limitations on the Company’s or any Company Subsidiary’s ability toprovide services or products to any customer or potential customer or similar restrictionson their respective businesses (each of which is identified in Section 3.20(a)(v) of theCompany Disclosure Schedule); and (vi) all agreements, notes, bonds, indentures or otherinstruments governing indebtedness for borrowed money, and any guarantee thereof or thepledge of any assets or other security therefor (each of which is identified in Section3.20(a)(vi) of the Company Disclosure Schedule). Each Material Contract is in full forceand effect and is enforceable against the parties thereto (other than the Company) inaccordance with its terms and no condition or state of facts exists that, with notice orthe passage of time, or both, would constitute a material default by the Company or, tothe knowledge of the Company, any third party under such Material Contracts. The Companyhas duly complied in all material respects with the provision of each Material Contract towhich it is a party. 

                   (b)      Except as set forth in Section 3.20(b) to the CompanyDisclosure Schedule, no shareholder that to the knowledge of the Company beneficially ownsin excess of 5% of the Company Common Stock, officer, director, employee or agent (or anymember of the immediate family of any of the foregoing) of the Company or any CompanySubsidiary or any affiliate of any officer or director of the Company or any CompanySubsidiary (i) has any interest in any assets or property (whether real or personal,tangible or intangible) of or used in the business of the Company or any CompanySubsidiary (other than as an owner of outstanding securities of the Company), (ii) isindebted or otherwise obligated to the Company (other than expense advances in theordinary course of business) or (iii) has any direct or indirect interest of any naturewhatsoever in any person or business which competes with, conducts any business similarto, has any arrangement or agreement (including arrangements regarding the shared use ofpersonnel or facilities) with (whether as a customer or supplier or otherwise), or isinvolved in any way with, the Company or any Company Subsidiary. The Company is notindebted or otherwise obligated to any such person described above, except for amounts dueunder normal arrangements applicable to all employees generally as to salary orreimbursement of ordinary business expenses not unusual in amount or significance. As ofthe date of this Agreement, to the knowledge of the Company, there are no losses, claims,damages, costs, expenses, liabilities or judgments which would entitle any director,officer or employee (or any member of the immediate family of any of the foregoing) of theCompany or any Company Subsidiary to indemnification by the Company or any CompanySubsidiary under applicable Law, the certificate of incorporation (or similar instrument)or bylaws (or similar instrument) of the Company or any Company Subsidiary or anyinsurance policy maintained by the Company or any Company Subsidiary. 

                   SECTION 3.21.  Inventory. The inventory of the Company and each CompanySubsidiary consists of raw materials and supplies, manufactured and purchased parts, goodsin process, and finished goods, all of which is merchantable and fit for the purpose forwhich it was procured or manufactured, and none of which is slow-moving, obsolete,damaged, or defective, subject only to the reserve for inventory writedown set forth onthe face of the Most Recent Balance Sheet (rather than in any notes thereto) as adjustedfor the passage of time through the Closing Date in accordance with the past custom andpractice of the Company. The inventory of the Company and each Company Subsidiary existingon the date of the Most Recent Balance Sheet was recorded on the Most Recent Balance Sheetat the lower of its cost or its market value. 

                   SECTION 3.22.  Product Liability. Except as disclosed in Section 3.22 of theCompany Disclosure Schedule, neither the Company nor any Company Subsidiary has anyliability (and, to the Company’s knowledge, there are no grounds for any present orfuture Claim or demand against any of them giving rise to any liability) arising out ofany injury to individuals or property as a result of the ownership, possession, use orconsumption of any product manufactured, sold or delivered by the Company or any CompanySubsidiary, that could reasonably be expected to have a Material Adverse Effect on theCompany. 

                   SECTION 3.23.  Customers. Section 3.23 of the Company Disclosure Schedulecontains a list of (a) for each of the Company’s three most recent fiscal years, theCompany’s and the Company Subsidiaries’ top 25 customers determined by each ofturkey product sales and chicken product sales during such year, plus all other customersto which sales during such year represented at least 1% of either the turkey product orchicken product sales of the Company and the Company Subsidiaries for such year (the“Major Customers”) and (b) the amount of revenues attributable to eachMajor Customer in such fiscal year. The Company has previously provided to Acquiror aschedule of each of the Company’s and the Company Subsidiaries’ long-termpricing commitments for the Major Customers for the fiscal year ending July 1, 2000, andno material reduction in any such commitment has occurred subsequent to July 1, 2000.Except as indicated on Section 3.23 of the Company Disclosure Schedule, none of the MajorCustomers has terminated or materially altered its relationship with the Company or anyCompany Subsidiary since July 1, 2000, or, to the Company’s knowledge, threatened todo so or otherwise notified the Company or any Company Subsidiary of its intention to doso, and there has been no material dispute with any of the Major Customers since July 1,2000. 

                   SECTION 3.24.  Insurance. The Company and each Company Subsidiary is insuredfor such amounts and upon such terms as required by any contractual or legal obligationbinding on any of them. Section 3.24 of the Company Disclosure Schedule contains acomplete listing of all insurance (and all self-insurance arrangements) maintained by theCompany and each Company Subsidiary as of the date hereof, or, if not currentlymaintained, that provides coverage for any current or contingent claim, indicating theform of coverage, name of carrier and broker, coverage limits and premium, expirationdates, deductibles, and all endorsements. 

                   SECTION 3.25.  Proxy Statement. The proxy statement to be sent to theshareholders of the Company in connection with the Company Shareholders’ Meeting (ashereinafter defined) (such proxy statement, as amended and supplemented, being referred toherein as the “Proxy Statement”), excluding any information supplied byAcquiror for inclusion therein, will not, on the date the Proxy Statement (or anyamendment or supplement thereto) is first mailed to shareholders of the Company, at thetime of the Company Shareholders’ Meeting and at the Closing, contain any statementwhich, at such time and in light of the circumstances under which it is made, is false ormisleading with respect to any material fact, or omits to state any material fact requiredto be stated therein or necessary in order to make the statements therein not false ormisleading or necessary to correct any statement in any earlier communication with respectto the solicitation of proxies for the Company Shareholders’ Meeting which shall havebecome false or misleading. 

                   SECTION 3.26.  Rights Agreement. The Company has provided Acquiror with acomplete and correct copy of that certain Shareholder Protection Rights Agreement dated asof February 4, 1994, by and between the Company and First Union National Bank of NorthCarolina (the “Rights Agreement”), including all amendments and exhibitsthereto. None of the execution or delivery of this Agreement or the consummation of theMerger or any Transaction will cause the occurrence of the Separation Time, a Flip-inDate, a Flip-over Transaction or Event or a Stock Acquisition Date (as each such term isdefined in the Rights Agreement) or will cause the Rights (as such term is defined in theRights Agreement) to become exercisable under the Rights Agreement, and no event orcircumstance described in this sentence has occurred. The Expiration Time (as such term isdefined in the Rights Agreement) shall occur at the Effective Time. 

                   SECTION 3.27.  Fees and Expenses of Transactions. The fees and expenses of theattorneys, accountants, brokers, investment bankers and advisors retained by the Companyor any Company Subsidiary in connection with the transactions contemplated by thisAgreement do not exceed the amount set forth in Section 3.27 of the Company DisclosureSchedule. 

**ARTICLE IV**

**REPRESENTATIONS AND WARRANTIES OF ACQUIROR****AND ACQUIROR SUB**

                   Acquiror and Acquiror Sub hereby, jointly and severally, represent and warrant to theCompany that:

                   SECTION 4.01.  Corporate Organization. Each of Acquiror and Acquiror Sub is acorporation duly organized, validly existing and in good standing under the laws of thejurisdiction of its incorporation and has the requisite corporate power and authority andall necessary governmental approvals to own, lease and operate its properties and to carryon its business as it is now being conducted, except where the failure to have such power,authority and governmental approvals could not, individually or in the aggregate,reasonably be expected to have a material adverse effect on the ability of Acquiror andAcquiror Sub to perform their obligations hereunder and to consummate the Transactions.

                  SECTION 4.02.  Authority Relative to This Agreement. Each of Acquiror andAcquiror Sub has all necessary corporate power and authority to execute and deliver thisAgreement, to perform its obligations hereunder and to consummate the Transactions. Theexecution and delivery of this Agreement by Acquiror and Acquiror Sub and the consummationby Acquiror and Acquiror Sub of the Transactions have been duly and validly authorized byall necessary corporate action and no other corporate proceedings on the part of Acquiroror Acquiror Sub are necessary to authorize this Agreement or to consummate theTransactions (other than with respect to the Merger, the filing and recordation ofappropriate Articles of Merger with the Corporation Commission, as required by VirginiaLaw). This Agreement has been duly and validly executed and delivered by Acquiror andAcquiror Sub and, assuming the due authorization, execution and delivery of this Agreementby the Company, constitutes a legal, valid and binding obligation of each of Acquiror andAcquiror Sub enforceable against each of Acquiror and Acquiror Sub in accordance with itsterms.

                   SECTION 4.03.  No Conflict; Required Filings and Consents. (a) The executionand delivery of this Agreement by Acquiror and Acquiror Sub do not, and the performance ofthis Agreement by Acquiror and Acquiror Sub will not, (i) conflict with or violate theArticles of Incorporation or Bylaws of either Acquiror or Acquiror Sub, (ii) conflict withor violate any Law applicable to Acquiror or Acquiror Sub or by which any property orasset of either of them is bound or affected, or (iii) result in any breach of orconstitute a default (or an event which with notice or lapse of time or both would becomea default) under, or give to others any rights of termination, amendment, acceleration orcancellation of, or result in the creation of a lien or other encumbrance on any propertyor asset of Acquiror or Acquiror Sub or require the consent of any third party pursuantto, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit,franchise or other instrument or obligation to which Acquiror or Acquiror Sub is a partyor by which Acquiror or Acquiror Sub or any property or asset of either of them is boundor affected, except for any such conflicts, violations, breaches, defaults or otheroccurrences which would not, individually or in the aggregate, prevent Acquiror andAcquiror Sub from performing their respective obligations under this Agreement andconsummating the Transactions.

                   (b)      The execution and delivery of this Agreement by Acquiror andAcquiror Sub do not, and the performance of this Agreement by Acquiror and Acquiror Subwill not, require any consent, approval, authorization or permit of, or filing with ornotification to, any governmental or regulatory authority, domestic or foreign, except (i)pursuant to the Exchange Act, Blue Sky Laws, the HSR Act and filing and recordation ofappropriate Articles of Merger with the Corporation Commission as required by Virginia Lawand (ii) where failure to obtain such consents, approvals, authorizations or permits, orto make such filings or notifications, could not reasonably be expected to prevent ordelay consummation of the Transactions or otherwise prevent Acquiror or Acquiror Sub fromperforming their respective obligations under this Agreement.

                   SECTION 4.04.  Proxy Statement. The information supplied by Acquiror forinclusion in the Proxy Statement will not, on the date the Proxy Statement (or anyamendment or supplement thereto) is first mailed to shareholders of the Company, at thetime of the Company Shareholders’ Meeting and at the Effective Time, contain anystatement which, at such time and in light of the circumstances under which it is made, isfalse or misleading with respect to any material fact, or omits to state any material factrequired to be stated therein or necessary in order to make the statements therein notfalse or misleading or necessary to correct any statement in any earlier communicationwith respect to the solicitation of proxies for the Company Shareholders’ Meetingwhich shall have become false or misleading. 

                   SECTION 4.05.  Acquiror and Acquiror Sub Holdings in Company Stock. Acquirorand Acquiror Sub, as of September 26, 2000 and the date hereof, own no shares of CompanyCommon Stock. 

                   SECTION 4.06.  Financing. Acquiror (a) has received fully executed writtencommitments, copies of which have been provided to the Company, to provide any fundsnecessary (together with other financing currently available to the Company) to satisfyall of Acquiror’s and Acquiror Sub’s obligations under this Agreement and inconnection with the transaction contemplated hereby, and (b) subject to the satisfactionof the conditions to Acquiror’s and Acquiror Sub’s obligations stated in ArticleVII, will have at the Closing the necessary financing to perform such obligations. 

**ARTICLE V**

**CONDUCT OF BUSINESS PENDING THE MERGER**

                   SECTION 5.01.  Conduct of Business by the Company Pending the Merger. TheCompany covenants and agrees that, between the date of this Agreement and the EffectiveTime, except as set forth in Section 5.01 of the Company Disclosure Schedule or asexpressly contemplated by any other provision of this Agreement, unless Acquiror shallotherwise agree in writing, (a) the business of the Company and the Company Subsidiariesshall be conducted only in, and the Company and the Company Subsidiaries shall not takeany action except in, the ordinary course of business and in a manner substantiallyconsistent with past practice, (b) the Company shall use all reasonable efforts topreserve substantially intact its business organization, to keep available the services ofthe current officers, employees and consultants of the Company and the CompanySubsidiaries and to preserve the current relationships of the Company and the CompanySubsidiaries with customers, suppliers and other persons with which the Company or anyCompany Subsidiary has significant business relations and (c) the Company shall not, andshall not permit any Company Subsidiary to: 

                             (i)      amend or otherwise change its articles of incorporation orbylaws or comparable organizational documents; 

                             (ii)     issue, sell, pledge, dispose of, grant, encumber, or authorize theissuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of capitalstock of the Company or any Company Subsidiary of any class, or any options, warrants,convertible securities or other rights of any kind to acquire any shares of such capitalstock, or any other ownership interest (including, without limitation, any phantominterest), of the Company (except for the issuance of up to 8,300 shares of Company CommonStock pursuant to the Company Plans, the issuance of rights pursuant to the RightsAgreement and the issuance of shares of capital stock pursuant to currently outstandingCompany Options, Company Warrants and rights pursuant to the Rights Agreement, in eachcase in accordance with the terms thereof as in effect on the date hereof) or any CompanySubsidiary, or (B) any of the Company’s or any Company Subsidiaries’ assetsexcept for sales in the ordinary course of business and in a manner consistent with pastpractice; 

                             (iii)    declare, set aside, make or pay any dividend or other distribution,payable in cash, stock, property or otherwise, with respect to any of its capital stock; 

                             (iv)    reclassify, combine, split, divide or redeem, purchase or otherwiseacquire, directly or indirectly, any of its capital stock; 

                             (v)     (A) acquire (including, without limitation, by merger,consolidation, or acquisition of stock or assets) any interest in any corporation,partnership, other business organization or any division thereof or any assets, other thanthe acquisition of assets in the ordinary course of business consistent with pastpractice; (B) incur any indebtedness for borrowed money or issue any debt securities orassume, guarantee or endorse, or otherwise as an accommodation become responsible for, theobligations of any person, or make any loans or advances, except for indebtedness incurredin the ordinary course of business and consistent with past practice (1) in a principalamount not, in the aggregate, in excess of $100,000 and repayable without premium orpenalty or (2) to fund the purchase of inventory and other working capital items; (C)enter into any contract or agreement material to the business, results of operations orfinancial condition of the Company other than in the ordinary course of business,consistent with past practice; (D) authorize any individual capital expenditure in excessof $100,000, or capital expenditures in the aggregate in excess of $1,000,000 in anymonth; or (E) enter into or amend any contract, agreement, commitment or arrangement withrespect to any matter set forth in this subsection (v); 

                             (vi)    increase the compensation payable or to become payable to any director,officer or other employee, or grant any bonus, to, or grant any severance or terminationpay to, or enter into any employment or severance agreement with any director, officer orother employee of the Company or any Company Subsidiary or enter into or amend anycollective bargaining agreement, or establish, adopt, enter into or amend any bonus,profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement,deferred compensation or other plan, trust or fund for the benefit of any director,officer or class of employees, except as contemplated by the last sentence of Section2.02(a); 

                             (vii)   settle or compromise any pending or threatened litigation which is materialor which relates to the transactions contemplated hereby, provided that nothing in thisSection 5.01(c)(vii) will prohibit the Company from settling or compromising any suchlitigation if, after consultation with counsel, the Company believes that such action isnecessary to comply with its fiduciary duties; or 

                             (viii) engage in any practice, take any action, or enter into any transaction of the sortdescribed in Section 3.08 above; or 

                             (ix)    otherwise take any action or willfully omit to take any commerciallyreasonable action that could reasonably be expected to make any representation or warrantyin Article III above untrue or incorrect in any material respect at any time, including asof the Effective Time, as if made as of such time. 

**ARTICLE VI**

**ADDITIONAL AGREEMENTS**

                   SECTION 6.01.  Shareholders’ Meeting. The Company shall, in accordancewith applicable law and the Company’s Articles of Incorporation and Bylaws, (i) dulycall, give notice of, convene and hold a special meeting of its shareholders as soon aspracticable following execution of this Agreement for the purpose of considering andtaking action on this Agreement and the Merger (the “Company Shareholders’Meeting”) and (ii) unless this Agreement has been terminated pursuant to Section8.01(d) hereof, include in the Proxy Statement the unanimous recommendation of the Boardof Directors of the Company that the shareholders of the Company approve and adopt thisAgreement and the Merger and use its reasonable best efforts to obtain such approval andadoption. 

                   SECTION 6.02.  Proxy Statement. As promptly as practicable after the executionof this Agreement, the Company shall file the Proxy Statement with the SEC under theExchange Act, and shall use its reasonable best efforts to have the Proxy Statementcleared by the SEC. Acquiror, Acquiror Sub and the Company shall cooperate with each otherin the preparation of the Proxy Statement, and the Company shall notify Acquiror of thereceipt of any comments of the SEC with respect to the Proxy Statement and of any requestsby the SEC for any amendment or supplement thereto or for additional information and shallprovide to Acquiror promptly copies of all correspondence between the Company or anyrepresentative of the Company and the SEC. The Company shall give Acquiror and its counselthe opportunity to review the Proxy Statement prior to its being filed with the SEC andshall give Acquiror and its counsel the opportunity to review all amendments andsupplements to the Proxy Statement and all responses to requests for additionalinformation and replies to comments prior to their being filed with, or sent to, the SEC.Each of the Company, Acquiror and Acquiror Sub agrees to use its reasonable best efforts,after consultation with the other parties hereto, to respond promptly to all such commentsof and requests by the SEC and to cause the Proxy Statement and all required amendmentsand supplements thereto to be mailed to the holders of Shares entitled to vote at theShareholders Meeting at the earliest practicable time. 

                   SECTION 6.03.  Appropriate Action; Consents; Filings. (a) The Company,Acquiror and Acquiror Sub shall use their best efforts to (i) take, or cause to be taken,all appropriate action, and do, or cause to be done, all things necessary, proper oradvisable under applicable Law or required to be taken by any Governmental Authority orotherwise to consummate and make effective the Transactions as promptly as practicable,(ii) obtain from any Governmental Authorities any consents, licenses, permits, waivers,approvals, authorizations or orders required to be obtained or made by Acquiror or theCompany or any of their subsidiaries in connection with the authorization, execution anddelivery of this Agreement and the consummation of the Transactions, including, withoutlimitation, the Merger, and (iii) as promptly as practicable, make all necessary filings,and thereafter make any other required submissions, with respect to this Agreement and theMerger required under (A) the Exchange Act and any other applicable federal or statesecurities Laws, (B) Virginia Law, (C) the HSR Act and any related governmental requestthereunder, and (D) any other applicable Law; provided that Acquiror and theCompany shall cooperate with each other in connection with the making of all such filings,including providing copies of all such documents to the non-filing party and its advisorsprior to filing and, if requested, accepting all reasonable additions, deletions orchanges suggested in connection therewith. The Company and Acquiror shall use reasonablebest efforts to furnish to each other all information required for any application orother filing to be made pursuant to the rules and regulations of any applicable Law(including all information required to be included in the Proxy Statement) in connectionwith the transactions contemplated by this Agreement. 

                   (b)      Each of Acquiror and the Company shall give (or shall causetheir respective subsidiaries to give) any notices to third parties, and use, and causetheir respective subsidiaries to use, their commercially reasonable efforts to obtain anythird party consents, (A) necessary to consummate the Transactions, (B) disclosed orrequired to be disclosed in the Company Disclosure Schedule or (C) required to prevent anystate of events that could reasonably be expected to cause a Material Adverse Effect tooccur prior to or after the Effective Time. If Acquiror or the Company shall fail toobtain any third party consent described in the foregoing sentence, it shall use its bestefforts, and shall take any such actions reasonably requested by the other party, tominimize any adverse effect upon the Company and Acquiror, their respective subsidiaries,and their respective businesses resulting, or which could reasonably be expected to resultafter the Effective Time, from the failure to obtain such consent. 

                   (c)      From the date of this Agreement until the Effective Time,each party shall promptly notify the other party of any pending, or to the best knowledgeof the first party, threatened, action, proceeding or investigation by or before anyGovernmental Authority or any other person (i) challenging or seeking material damages inconnection with the Merger or the conversion of the Company Common Stock into cashpursuant to the Merger or (ii) seeking to restrain or prohibit the consummation of theMerger or otherwise limit the right of Acquiror or Acquiror Sub to own or operate all orany portion of the businesses or assets of the Company, which in either case couldreasonably be expected to have a Material Adverse Effect on the Company prior to theEffective Time, or a Material Adverse Effect on Acquiror and Acquiror Sub (including theSurviving Corporation) after the Effective Time. 

                   SECTION 6.04.  Access to Information; Confidentiality. Subject to theconfidentiality agreement, dated August 28, 2000, between the Company and Acquiror (the“Confidentiality Agreement”), from the date hereof to the Effective Time,the Company will provide to Acquiror, during normal business hours and upon reasonablenotice, access to all information and documents which Acquiror may reasonably requestregarding the business, assets, liabilities, employees and other aspects of the Company. 

                   SECTION 6.05.  No Solicitation of Transactions. (a) The Company shall not,directly or indirectly, and shall not permit any of its or the Company Subsidiaries’officers, directors, employees, agents or representatives (including, without limitation,investment bankers, attorneys and accountants) to, (i) solicit, initiate or encourage thesubmission of any proposal that either constitutes a Business Combination Transaction (assuch term is defined in Section 8.02) or may reasonably be expected to lead to a BusinessCombination Transaction with the Company, other than the Merger (a “TakeoverProposal”), or (ii) participate in any discussions or negotiations regarding, orfurnish to any other person any information with respect to, or otherwise cooperate in anyway with, or assist or participate in, facilitate or encourage, any effort or attempt byany other person to do or seek any of the foregoing; provided, however, thatnothing contained in this Section 6.05 shall prohibit the Company from furnishinginformation to, or entering into discussions or negotiations with, any person inconnection with a bona fide unsolicited written Takeover Proposal by such person thatinvolves consideration to the Company’s shareholders with a value that theCompany’s Board of Directors in good faith reasonably believes, after receivingadvice from the Company Banker, is superior to the consideration provided for in theMerger (after taking into consideration the liability in respect of the AlternativeProposal Fee) received by the Company after the date of this Agreement and prior toreceipt of shareholder approval of the Merger in accordance with Virginia Law, if, andonly to the extent that, (1) the Company’s Board of Directors, based on the advice ofindependent legal counsel of the Company and the Company Banker, determines in its goodfaith business judgment that such action is required in order for such Board of Directorsto satisfy its duties to the Company imposed by Virginia Law and (2) at least threebusiness days prior to furnishing such information to, or entering into discussions ornegotiations with, such person, the Company (A) gives Acquiror prior written notice (whichshall include a copy of such written Takeover Proposal) of the Company’s intention tofurnish such information or begin such discussions and (B) receives from such person anexecuted confidentiality agreement on terms no less favorable to the Company than thosecontained in the Confidentiality Agreement. The Company agrees not to release any thirdparty from, or waive any provision of, any confidentiality agreement to which the Companyis a party. The Company immediately shall cease and cause to be terminated all existingdiscussions or negotiations with any parties conducted heretofore with respect to any ofthe foregoing. 

                   (b)      Neither the Board of Directors of the Company nor anycommittee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in amanner adverse to Acquiror, the approval (including, without limitation, any resolutionproviding for such approval) or recommendation by such Board of Directors or suchcommittee of this Agreement or the Merger or (ii) approve or recommend, or propose toapprove or recommend, any Takeover Proposal, except, in either case, at or after thetermination of this Agreement pursuant to Section 8.01(d). 

                   (c)      Nothing contained in this Section 6.05 shall prohibit theCompany from taking and disclosing to its shareholders a position contemplated by Rule14e-2(a) under the Exchange Act with respect to any tender or exchange offer; provided,however, that neither the Company nor its Board of Directors nor any committee thereof,shall, except as permitted by Section 6.05(b), withdraw or modify, or propose to withdrawor modify, its approval or recommendation with respect to this Agreement or the Merger(including, without limitation, any resolution providing for such approval), or approve orrecommend, or propose to approve or recommend, any Takeover Proposal. 

                   SECTION 6.06.  Directors’ and Officers’ Indemnification. (a) TheArticles of Incorporation and Bylaws of the Surviving Corporation shall contain provisionsno less favorable with respect to indemnification than are set forth in the Articles ofIncorporation and Bylaws of the Company, which provisions shall not be amended, repealedor otherwise modified for a period of six (6) years from the Effective Time in any mannerthat would affect adversely the rights thereunder of individuals who at any time prior tothe Effective Time were directors or officers of the Company or any of the CompanySubsidiaries, unless such modification shall be required by Virginia Law. 

                    (b)      From and after the Effective Time, Acquiror shall indemnify,defend and hold harmless each person who is now, or has been at any time prior to the dateof this Agreement or who becomes prior to the Effective Time, an officer or director ofthe Company or any of the Company Subsidiaries (collectively, the “IndemnifiedParties”) against all losses, expenses (including reasonable attorneys’ fees),claims, damages, liabilities or amounts that are paid in settlement of, with the approvalof the Surviving Corporation (which approval shall not unreasonably be withheld), orotherwise in connection with, any threatened or actual Claim, based in whole or in part onor arising in whole or in part out of the fact that the Indemnified Party (or the Personcontrolled by the Indemnified Party) is or was a director or officer of the Company or anyof the Company Subsidiaries and pertaining to any matter existing or arising out ofactions or omissions occurring at or prior to the Effective Time (including, withoutlimitation, any Claim arising out of this Agreement or any of the transactionscontemplated hereby), whether asserted or claimed prior to, at or after the EffectiveTime, in each case to the fullest extent permitted under Law, and shall pay any expenses,as incurred, in advance of the final disposition of any such action or proceeding to eachIndemnified Party to the fullest extent permitted under Law. Without limiting theforegoing, in the event any such Claim is brought against any of the Indemnified Parties,(i) such Indemnified Parties may retain counsel (including local counsel) satisfactory tothem and which shall be reasonably satisfactory to Acquiror and Acquiror shall pay allreasonable fees and expenses of such counsel for such Indemnified Parties; and (ii) theSurviving Corporation shall use all reasonable efforts to assist in the defense of anysuch Claim, provided that Acquiror shall not be liable for any settlement effected withoutits written consent, which consent, however, shall not be unreasonably withheld. TheIndemnified Parties as a group shall retain only one law firm (plus appropriate localcounsel) to represent them with respect to each such Claim unless there is, as determinedby counsel to the Indemnified Parties, under applicable standards of professional conduct,a conflict or a reasonable likelihood of a conflict on any significant issue between thepositions of any two or more Indemnified Parties at the expense of Acquiror. 

                   (c)      For a period of six years after the Effective Time, Acquirorshall cause to be maintained in effect the Company’s current policy ofDirectors’ and Officers’ Liability Insurance (provided that Acquiror maysubstitute therefor one or more policies of at least the same coverage and amountscontaining terms and conditions which are no less advantageous in any material respect)with respect to claims arising from facts or events that occurred before the EffectiveTime to the extent available at an annual premium not in excess of 200% of the last annualpremium paid by the Company prior to the date hereof. If Acquiror is unable to obtain theinsurance required by this Section 6.06(c) at an annual premium not in excess of theforegoing amount, then it shall obtain the greatest amount of comparable insurance thenreasonably available to it for an annual premium not in excess of the foregoing amount. 

                   SECTION 6.07.  Obligations of Acquiror Sub. Acquiror shall take all actionnecessary to cause Acquiror Sub to perform its obligations under this Agreement and toconsummate the Merger on the terms and subject to conditions set forth in this Agreement. 

                   SECTION 6.08.  Public Announcements. Acquiror and the Company shall consultwith each other before issuing any press release or otherwise making any public statementswith respect to this Agreement or any Transaction and shall not issue any such pressrelease or make any such public statement prior to such consultation; provided, however,that the press release announcing this Agreement shall be in the form previously agreed toby Acquiror and the Company. Prior to the Effective Time, the Company will not issue anyother press release or otherwise make any public statements regarding its business, exceptto the extent that (i) such statement is not prohibited by Section 6.05 and (ii) theCompany’s Board of Directors determines in good faith, based upon the advice ofoutside legal counsel, that any such communication is required to satisfy its duties tothe Company. 

                   SECTION 6.09.  Delivery of SEC Documents. The Company shall promptly deliverto Acquiror true and correct copies of any report, statement or schedule filed with theSEC subsequent to the date of this Agreement. 

                    SECTION 6.10.  Notification of Certain Matters. The Company shall give promptnotice to Acquiror, and Acquiror shall give prompt notice to the Company, of (i) theoccurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of whichwould be likely to cause any representation or warranty contained in this Agreement to beuntrue or inaccurate and (ii) any failure of the Company, Acquiror or Acquiror Sub, as thecase may be, to comply with or satisfy any covenant, condition or agreement to be compliedwith or satisfied by it hereunder; provided, however, that the delivery of anynotice pursuant to this Section 6.10 shall not limit or otherwise affect the remediesavailable hereunder to the party receiving such notice. 

                   SECTION 6.11.  Further Action. At any time and from time to time, each partyto this Agreement agrees, subject to the terms and conditions of this Agreement, to takesuch actions and to execute and deliver such documents as may be necessary to effectuatethe purposes of this Agreement at the earliest practicable time. 

                   SECTION 6.12.  Postponement of Annual Meeting. The Company shall as soon aspossible after the date of this Agreement indefinitely postpone its annual meeting ofshareholders currently scheduled for October 28, 2000, and shall take no action unlesscompelled by legal process to reschedule such annual meeting or to call a special meetingof shareholders of the Company, except in accordance with this Agreement, unless and untilthis Agreement has been terminated in accordance with its terms. 

                    SECTION 6.13.  Letters of Accountants. The Company shall use its reasonablebest efforts to cause to be delivered to Acquiror “comfort” letters of KPMG LLP,the Company’s independent public accountants, dated and delivered on the date onwhich the Proxy Statement is mailed to the Company’s shareholders and on the date ofthe Closing, each addressed to Acquiror, in form and substance reasonably satisfactory toAcquiror and reasonably customary in scope and substance for letters delivered byindependent public accountants in connection with transactions such as those contemplatedby this Agreement. 

                   SECTION 6.14.  Continuation of Benefits. (a) Acquiror agrees that, during theperiod commencing at the Effective Time and ending on the first anniversary thereof, theemployees of the Company and the Company Subsidiaries will continue to be provided withbenefits under employee benefit plans that are no less favorable in the aggregate thanthose currently provided by Acquiror to its similarly situated employees. 

                   (b)      Employees of the Company (and, after the Merger, theSurviving Corporation) shall be given credit for all actual service with the Company andthe Company Subsidiaries under all employee benefit plans, programs and policies of theSurviving Corporation or Acquiror in which they become participants for all purposesthereunder, except to the extent that such crediting would produce duplication ofbenefits. 

                   (c)      From and after the Effective Time, Acquiror shall, to theextent permitted under the relevant plan and within Acquiror’s control, (i) cause anypre-existing condition or limitation and any eligibility waiting periods (to the extentsuch limitations or waiting periods did not apply to the employees of the Company underits plans in existence as of the date hereof) under any group health plans of Acquiror tobe waived with respect to employees of the Company and their eligible dependents and (ii)give each employee of the Company credit for the plan year in which the Effective Timeoccurs toward applicable deductions and annual out-of-pocket limits for health expensesincurred prior to the Effective Time (or such later date on which participation commences)during the applicable plan year. 

                   SECTION 6.15.  Severance Policy and Other Agreements. Acquiror shall honor orcause to be honored all severance and retention agreements and employment agreements withthe Company’s directors, officers and employees set forth in Section 6.15(a) of theCompany Disclosure Schedule. The Company represents and warrants that it has provided toAcquiror true and complete copies of such agreements. Except as set forth in Section6.15(b) of the Company Disclosure Schedule, the Company represents and warrants that ithas taken all necessary action to ensure that no payments or amounts due will be in excessof applicable tax deductibility limits or will give rise to any excise taxes. 

                   SECTION 6.16.  Grower Relations. Acquiror shall comply with the terms of allexisting grower contracts. 

                   SECTION 6.17.  Environmental Assessments. On or before October 6, 2000, theCompany shall deliver to Acquiror a Phase I environmental assessment audit conducted afterSeptember 1, 2000 by Nova Consulting Group, Inc. or Patton, Harris, Rust and Associatesconducted in accordance with all applicable American Society for Testing and Materialsstandards (including ASTM E1527-00 Standard Practice for Environmental Site Assessments:Phase I Environmental Site Assessment Process) (a “Phase I Assessment”)on each parcel of real property identified as a “2000 Phase I” property onSection 6.17 of the Company Disclosure Schedule, which the Company represents and warrantsconstitute all parcels of real property identified on Section 3.17(b) or (c) of theCompany Disclosure Schedule that are or have been used for any purpose other than (i) idleland, (ii) growing crops, (iii) as a turkey breeder farm, (iv) growing out chickens and/orturkeys, (v) as a leased residential apartment or (vi) as the location of communicationtowers to the extent identified on Section 6.17 of the Company Disclosure Schedule.Acquiror shall determine no later than ten business days after receipt of all Phase IAssessments required above, whether any recommended or otherwise suggested Phase IIAssessments (as defined below) are waived with respect to the closing condition set forthin Section 7.02(f) below. Acquiror shall notify the Company in writing of itsdetermination no later than such tenth business day, and such notice shall identify thePhase II Assessments that should be obtained by the Company, or acknowledge that theclosing condition set forth in Section 7.02(f) is satisfied. As soon as possible afterreceipt of any such notice from Acquiror identifying any Phase II Assessments to beobtained, but in no event later than ten business days after receipt of such notice, theCompany shall deliver to Acquiror a Phase II environmental assessment audit conductedafter September 1, 2000 by Nova Consulting Group, Inc. or Patton, Harris, Rust andAssociates in accordance with all applicable American Society for Testing and Materialsstandards (including ASTM E1903-97 Standard Practice for Environmental Site Assessments:Phase II Environmental Site Assessment Process) (a “Phase II Assessment”),to the extent recommended or otherwise suggested by any of the Phase I Assessmentsreferred to above in this Section 6.17 and not waived by Acquiror. Acquiror shall notifythe Company in writing of its determination, no later than five business days afterreceipt of all such Phase II Assessments, as to whether the closing condition in Section7.02(f) is satisfied. All such Phase I and Phase II Assessments shall be performed for themutual benefit of Acquiror and the Company. All costs and expenses associated with thePhase I and Phase II Assessments shall be paid by the Company. If Acquiror is required bythis Section 6.17 to provide any notice but fails to do so, the Company shall promptlynotify Acquiror of such failure, and Acquiror shall provide the required notice withinthree business days of receipt of such notification by the Company. 

**ARTICLE VII**

**CONDITIONS TO THE MERGER**

                   SECTION 7.01.  Conditions to the Obligations of Each Party. The obligations ofthe Company, Acquiror and Acquiror Sub to consummate the Merger are subject to thesatisfaction of the following conditions: 

                             (a)      this Agreement and the Transactions contemplated hereby shallhave been approved and adopted by the affirmative vote of the shareholders of the Companyin accordance with Virginia Law and the Company’s Articles of Incorporation andBylaws and the rules of the National Association of Securities Dealers, Inc.; 

                             (b)      no Governmental Authority shall have enacted, issued,promulgated, enforced or entered any Order or statute, rule or regulation which is ineffect and which has the effect of making the Merger illegal or otherwise prohibitingconsummation of the Merger; and 

                             (c)      any applicable waiting period under the HSR Act relating tothe Merger shall have expired or been terminated. 

                   SECTION 7.02.  Conditions to the Obligations of Acquiror and Acquiror Sub. Theobligations of Acquiror and Acquiror Sub to consummate the Merger are subject to thesatisfaction of the following further conditions: 

                             (a)      the Company shall have performed or complied in all materialrespects with all agreements and covenants required by this Agreement to be performed orcomplied with by it at or prior to the Effective Time and each of the representations andwarranties of the Company contained in this Agreement shall be true and correct in allmaterial respects (except that where any statement in a representation or warrantyexpressly includes a standard of materiality, such statement shall be true and correct inall respects) as of the Effective Time as though made on and as of the Effective Time,except that those representations and warranties which address matters only as of aparticular date shall remain true and correct as of such date, and Acquiror shall havereceived a certificate of an executive officer of the Company to that effect; 

                             (b)      since the date of this Agreement, no material adverse changein the financial condition, results of operations or business of the Company and theCompany Subsidiaries, taken as a whole, shall have occurred, and neither the Company norany Company Subsidiary shall have suffered any damage, destruction or loss materiallyaffecting the business or properties of the Company and the Company Subsidiaries, taken asa whole; 

                             (c)      Acquiror shall have received the “comfort” letterscontemplated by Section 6.13 above; 

                             (d)      The Company shall have terminated its Poultry Producer StockPurchase Plan, Amended and Restated Employee Stock Purchase Plan, Dividend Reinvestmentand Stock Purchase Plan and Plan to Issue Stock for Director Compensation in accordancewith the terms of each such plan; 

                             (e)      The Company shall have obtained the consent of each otherperson and Governmental Authority (in a form reasonably satisfactory to Acquiror) whoseconsent shall be required in connection with the Merger under all agreements and Laws towhich the Company or any Company Subsidiary is a party or bound, other than consents thefailure of which to obtain could not reasonably be expected to have a Material AdverseEffect on the Surviving Corporation or Acquiror; and

                             (f)       The Company shall have delivered to Acquiror the PhaseI and Phase II Assessments within the time periods and as otherwise required by Section6.17 hereof, and all recognized environmental conditions or concerns identified in any ofsuch Phase I or Phase II Assessments shall not and could not reasonably be expected toresult in remediation costs, liabilities and/or necessary compliance expenditures in theaggregate (taking into consideration all other expected remediation costs, liabilitiesand/or necessary compliance expenditures identified in such Phase I or Phase IIAssessments) in excess of $1,000,000. 

                   SECTION 7.03.  Conditions to the Obligations of the Company. The obligationsof the Company to consummate the Merger are subject to the satisfaction of the followingfurther condition: Acquiror and Acquiror Sub shall have performed or complied in allmaterial respects with all agreements and covenants required by this Agreement to beperformed or complied with by them at or prior to the Effective Time and each of therepresentations and warranties of Acquiror and Acquiror Sub contained in this Agreementshall be true and correct in all material respects (except that where any statement in arepresentation or warranty expressly includes a standard of materiality, such statementshall be true and correct in all respects) as of the Effective Time, as though made on andas of the Effective Time, except that those representations and warranties which addressmatters only as of a particular date shall remain true and correct as of such date, andthe Company shall have received a certificate of an executive officer of Acquiror to thateffect. 

**ARTICLE VIII**

**TERMINATION, AMENDMENT AND WAIVER**

                   SECTION 8.01.  Termination. This Agreement may be terminated and the Mergerand the other Transactions may be abandoned at any time prior to the Effective Time,notwithstanding any requisite approval and adoption of this Agreement and theTransactions, as follows: 

                             (a)      by mutual written consent duly authorized by the Boards ofDirectors of each of Acquiror, Acquiror Sub and the Company; 

                             (b)      by either Acquiror or the Company, if either (i) theEffective Time shall not have occurred on or before March 30, 2001 (or such later date asshall be agreed to in writing by Acquiror and the Company); provided, however, thatthe right to terminate this Agreement under this Section 8.01(b) shall not be available toany party whose failure to fulfill any obligation under this Agreement has been the causeof, or resulted in, the failure of the Effective Time to occur on or before such date; or(ii) there shall be any Order which is final and nonappealable preventing the consummationof the Merger, except if the party relying on such Order has not complied with itsobligations under Section 6.03(a); 

                             (c)      by Acquiror, if (i) the Board of Directors of the Companywithdraws, or modifies in any respect adverse to Acquiror, its approval or recommendationof this Agreement or the Merger or shall have resolved to do so, (ii) the Board ofDirectors of the Company shall have recommended to the shareholders of the Company anyTakeover Proposal or resolved to do so, or (iii) a tender offer or exchange offer for 20%or more of the outstanding shares of capital stock of the Company is announced orcommenced, and the Board of Directors of the Company fails, within ten business days, torecommend against the shareholders of the Company tendering their shares into such tenderoffer or exchange offer; 

                             (d)      by the Company, if the Company’s Board of Directorsdetermines in its good faith business judgment (subject to compliance with Section 6.05),after consultation with independent legal counsel, that such termination is required inorder for such Board of Directors to satisfy its duties to the Company imposed by VirginiaLaw by reason of a Takeover Proposal; provided that any termination of this Agreement bythe Company pursuant to this Section 8.01(d) shall not be effective until the Company hasmade payment of the full fee required by Section 8.02(a) hereof; 

                             (e)      by Acquiror or the Company, if the shareholders of theCompany shall have failed to approve and adopt this Agreement and the Merger at a meeting(including any adjournment or postponements) duly convened therefor; 

                             (f)      by Acquiror, upon a breach of any representation, warranty,covenant or agreement on the part of the Company set forth in this Agreement, or if anyrepresentation or warranty of the Company shall have become untrue, in either case suchthat the conditions set forth in Section 7.02(a) would not be satisfied (a “TerminatingCompany Breach”); provided, however, that, if such Terminating CompanyBreach is curable by the Company through the exercise of its best efforts and for so longas the Company continues to exercise such best efforts, Acquiror may not terminate thisAgreement under this Section 8.01(f); 

                             (g)      by Acquiror, (i) if on or before October 6, 2000 the Companyfails to deliver to Acquiror any Phase I Assessment as required by Section 6.17 hereof,Acquiror provides notice of such failure and the Company fails to deliver all such Phase IAssessments within three business days after such notice, (ii) if on or before the tenthbusiness day following a notice from Acquiror with respect thereto as required by Section6.17 hereof, the Company fails to deliver to Acquiror any Phase II Assessment as requiredby Section 6.17 hereof, Acquiror provides notice of such failure and the Company fails todeliver all such Phase II Assessments within three business days after such notice, or(iii) at any time prior to the fifth business day following the delivery of all Phase IIAssessments required by Section 6.17 hereof (or, if no such Phase II Assessments are sorequired, the tenth business day following the delivery of all Phase I Assessmentsrequired by Section 6.17 hereof), if any Phase I or Phase II Assessments identify anyrecognized environmental conditions or concerns that would or could reasonably be expectedto result in remediation costs, liabilities and/or necessary compliance expenditures inthe aggregate (taking into consideration all other expected remediation costs, liabilitiesand/or necessary compliance expenditures identified in the Phase I or Phase IIAssessments) in excess of $1,000,000; or 

                             (h)      by the Company, upon breach of any representations, warranty,covenant or agreement on the part of Acquiror set forth in this Agreement, or if anyrepresentation or warranty of Acquiror shall have become untrue, in either case such thatthe conditions set forth in Section 7.03 would not be satisfied (“TerminatingAcquiror Breach”); provided, however, that, if such Terminating AcquirorBreach is curable by Acquiror through best efforts and for so long as Acquiror continuesto exercise such best efforts, the Company may not terminate this Agreement under thisSection 8.01(h). Acquiror’s agreement to deliver written notices as required bySection 6.17 shall not be considered curable, except as provided in the last sentence ofSection 6.17. 

                   SECTION 8.02.  Fees and Expenses. (a) The Company shall pay Acquiror a fee (an“Alternative Proposal Fee”) equal to the sum of $10,000,000, less anyAcquiror Expenses previously paid by the Company, if: 

                   (i)      this Agreement is terminated pursuant to Section 8.01(c) or(d); or 

                   (ii)     this Agreement is terminated pursuant to Section 8.01(e), and anyBusiness Combination Transaction is thereafter consummated (or an agreement with respectthereto is entered into) within 12 months of such termination. 

As used herein, the term “Business Combination Transaction” shall meanany of the following involving the Company: (1) any merger, consolidation, share exchange,business combination or other similar transaction (other than the Transactions); (2) anysale, lease, exchange, transfer or other disposition (other than a pledge or mortgage) of20% or more of the assets of the Company in a single transaction or series of relatedtransactions; (3) the acquisition by a person or entity or any “group” (as suchterm is defined under Section 13(d) of the Exchange Act and the rules and regulationsthereunder) of beneficial ownership of 20% or more of the shares of Company Common Stock,whether by tender offer, exchange offer or otherwise; (4) the adoption by the Company of aplan of liquidation or the declaration or payment of an extraordinary dividend; or (5) therepurchase by the Company or any Company Subsidiary of 20% or more of the Shares. 

                             (b)      Acquiror shall be entitled to receive the Acquiror Expensesin immediately available funds in the event that this Agreement is terminated by Acquirorpursuant to Section 8.01(b)(i) (subject to the proviso thereof), Section 8.01(e) orSection 8.01(g). The Company shall be entitled to receive the Company Expenses inimmediately available funds in the event that this Agreement is terminated by the Companypursuant to Section 8.01(b)(i) (subject to the proviso thereof) or Section 8.01(h) due toa failure by Acquiror to obtain the financing necessary to consummate the Transactions,unless at the time of such termination Acquiror would have been entitled to terminate thisAgreement pursuant to Section 8.01(g). 

                             (c)      In the event of termination of this Agreement and theabandonment of the Merger pursuant to Section 8.01, all obligations of the parties heretoshall terminate except the obligations of the parties pursuant to this Section 8.02 andSections 8.03, 8.04, 9.02, 9.03, 9.04, 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11 and 9.12and pursuant to the Confidentiality Agreement. No termination of this Agreement pursuantto Section 8.01(f) or 8.01(h) shall prejudice the ability of a non-breaching party fromseeking damages from any other party for any breach of this Agreement, including, withoutlimitation, attorneys’ fees and the right to pursue any remedy at law or in equity.Notwithstanding the foregoing, if either party is required to file suit to seek theAlternative Proposal Fee, Acquiror Expenses or Company Expenses, and it ultimatelysucceeds on the merits, it shall be entitled to all expenses, including attorneys’fees, which it has incurred in enforcing its rights under this Section 8.02. 

                             (d)      As used herein, “Acquiror Expenses” meansall out-of-pocket expenses and fees actually incurred or accrued by Acquiror or AcquirorSub or on their respective behalf in connection with the Transactions prior to thetermination of this Agreement (including, without limitation, all fees and expenses ofcounsel, financial advisors, banks or other entities providing financing to Acquiror(including financing, commitment and other fees payable thereto), accountants,environmental and other experts and consultants to Acquiror and its affiliates, and allprinting and advertising expenses) and in connection with the negotiation, preparation,execution, performance and termination of this Agreement, the structuring of theTransactions, any agreements relating thereto and any filings to be made in connectiontherewith. 

                             (e)      As used herein, “Company Expenses” means allout-of-pocket expenses and fees actually incurred or accrued by the Company or on itsbehalf in connection with the Transactions prior to the termination of this Agreement(including, without limitation, all fees and expenses of counsel, financial advisors,accountants, environmental and other experts and consultants to the Company and itsaffiliates, and all printing and advertising expenses) and in connection with thenegotiation, preparation, execution, performance and termination of this Agreement, thestructuring of the Transactions, any agreements relating thereto and any filings to bemade in connection therewith. 

                             (f)      Except as set forth in this Section or elsewhere in thisAgreement and except that the Company shall reimburse Acquiror for one-half of the HSR Actfiling fee, all costs and expenses incurred in connection with this Agreement and theTransactions shall be paid by the party incurring such expenses, whether or not anyTransaction is consummated. 

                   SECTION 8.03.  Amendment. This Agreement may be amended by the parties heretoby action taken by or on behalf of their respective Boards of Directors at any time priorto the Effective Time; provided, however, that, after the approval and adoption ofthis Agreement by the shareholders of the Company, no amendment may be made which wouldviolate Virginia Law. This Agreement may not be amended except by an instrument in writingsigned by the parties hereto. 

                   SECTION 8.04.  Waiver. At any time prior to the Effective Time, any partyhereto may (a) extend the time for the performance of any obligation or other act of anyother party hereto, (b) waive any inaccuracy in the representations and warrantiescontained herein or in any document delivered pursuant hereto and (c) waive compliancewith any agreement or condition contained herein. Any such extension or waiver shall bevalid only if set forth in an instrument in writing signed by the party or parties to bebound thereby. 

**ARTICLE IX**

**GENERAL PROVISIONS**

                   SECTION 9.01.  Non-Survival of Representations, Warranties and Agreements. Therepresentations, warranties and agreements in this Agreement and any certificate deliveredpursuant hereto by any person shall terminate at the Effective Time, except that theagreements set forth in Articles I and II and Section 6.06 shall survive the EffectiveTime indefinitely. 

                   SECTION 9.02.  Notices. All notices, requests, claims, demands and othercommunications hereunder shall be in writing and shall be given (and shall be deemed tohave been duly given upon receipt) by delivery in person, by cable, facsimile, telegram ortelex or by registered or certified mail (postage prepaid, return receipt requested) tothe respective parties at the following addresses (or at such other address for a party asshall be specified in a notice given in accordance with this Section 9.02): 

                   if to Acquiror or Acquiror Sub: 

                   Pilgrim’s Pride Corporation                   110 South Texas                   Pittsburg, Texas 75686-0093                   Attention: Richard A. Cogdill                   Facsimile: (903) 855-4934 

                   with a copy to: 

                   Baker & McKenzie                   4500 Trammell Crow Center                   2001 Ross Avenue                   Dallas, Texas 75201                   Attention: Alan G. Harvey                   Facsimile: (214) 978-3099 

                   if to the Company: 

                   WLR Foods, Inc.                   P.O. Box 7000                   Broadway, Virginia 22815                   Attention: James L. Keeler                   Facsimile: (540) 896-0496 

                   with a copy to: 

                   Wharton Aldhizer & Weaver PLC                   100 South Mason Street                    P.O. Box 20028                    Harrisonburg, Virginia 22801-7528                    Attention: John W. Flora                   Facsimile: (540) 434-5502 

                   SECTION 9.03.  Certain Definitions. For purposes of this Agreement, the term: 

                   (a)      “affiliate” of a specified person means aperson who, directly or indirectly, through one or more intermediaries, controls, iscontrolled by, or is under common control with, such specified person; 

                   (b)      “beneficial owner” with respect to anyshares means a person who shall be deemed to be the beneficial owner of such shares (i)which such person or any of its affiliates or associates (as such term is defined in Rule12b-2 promulgated under the Exchange Act) beneficially owns, directly or indirectly, (ii)which such person or any of its affiliates or associates has, directly or indirectly, (A)the right to acquire (whether such right is exercisable immediately or subject only to thepassage of time), pursuant to any agreement, arrangement or understanding or upon theexercise of consideration rights, exchange rights, warrants or options, or otherwise, or(B) the right to vote pursuant to any agreement, arrangement or understanding, (iii) whichare beneficially owned, directly or indirectly, by any other persons with whom such personor any of its affiliates or associates or any person with whom such person or any of itsaffiliates or associates has any agreement, arrangement or understanding for the purposeof acquiring, holding, voting or disposing of any such shares, or (iv) pursuant to Section13(d) of the Exchange Act and any rules or regulations promulgated thereunder; 

                   (c)       “business day” means any day on whichthe principal offices of the SEC in Washington, D.C. are open to accept filings, or, inthe case of determining a date when any payment is due, any day on which banks are notrequired or authorized to close in New York, New York; 

                   (d)       “control” (including the terms “controlledby” and “under common control with”) means the possession,directly or indirectly or as trustee or executor, of the power to direct or cause thedirection of the management and policies of a person, whether through the ownership ofvoting securities, as trustee or executor, by contract or credit arrangement or otherwise;

                   (e)       “person” means an individual,corporation, partnership, limited partnership, syndicate, person (including, withoutlimitation, a “person” as defined in Section 13(d)(3) of the Exchange Act),trust, association or entity or government, political subdivision, agency orinstrumentality of a government; and 

                   (f)      “subsidiary” or “subsidiaries”of any person means any corporation, partnership, joint venture or other legal entity ofwhich such person (either alone or through or together with any other subsidiary), owns orhas rights to acquire, directly or indirectly, more than 50% of the stock or other equityinterests the holders of which are generally entitled to vote for the election of theboard of directors or other governing body of such corporation or other legal entity. 

                   SECTION 9.04.  Severability. If any term or other provision of this Agreementis invalid, illegal or incapable of being enforced by any rule of Law, or public policy,all other conditions and provisions of this Agreement shall nevertheless remain in fullforce and effect so long as the economic or legal substance of the Transactions is notaffected in any manner materially adverse to any party. Upon such determination that anyterm or other provision is invalid, illegal or incapable of being enforced, the partieshereto shall negotiate in good faith to modify this Agreement so as to effect the originalintent of the parties as closely as possible in a mutually acceptable manner in order thatthe Transactions be consummated as originally contemplated to the fullest extent possible.

                   SECTION 9.05.  Assignment; Binding Effect; Benefit. Neither this Agreement norany of the rights, interests or obligations hereunder shall be assigned by any of theparties hereto (whether by operation of law or otherwise) without the prior writtenconsent of the other parties. Subject to the preceding sentence, this Agreement shall bebinding upon and shall inure to the benefit of the parties hereto and their respectivesuccessors and assigns. Notwithstanding anything contained in this Agreement to thecontrary, except for the provisions of Article II and Section 6.06 (collectively, the“Third Party Provisions”), nothing in this Agreement, expressed orimplied, is intended to confer on any person other than the parties hereto or theirrespective successors and assigns any rights, remedies, obligations or liabilities underor by reason of this Agreement. 

                   SECTION 9.06.  Incorporation of Schedules. The Company Disclosure Schedulereferred to herein and signed for identification by the parties hereto is herebyincorporated herein and made a part hereof for all purposes as if fully set forth herein. 

                   SECTION 9.07.  Specific Performance. The parties hereto agree that irreparabledamage would occur in the event any provision of this Agreement was not performed inaccordance with the terms hereof and that the parties shall be entitled to specificperformance of the terms hereof, in addition to any other remedy at law or equity. 

                   SECTION 9.08.  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THERULES OF CONFLICTS OF LAW THEREOF. ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATINGTO THIS AGREEMENT SHALL BE HEARD AND DETERMINED IN ANY COURT SITTING IN THE STATE OFDELAWARE. 

                   SECTION 9.09.  Headings. The descriptive headings contained in this Agreementare included for convenience of reference only and shall not affect in any way the meaningor interpretation of this Agreement. 

                   SECTION 9.10.  Counterparts. This Agreement may be executed and delivered(including by facsimile transmission) in one or more counterparts, and by the differentparties hereto in separate counterparts, each of which when executed and delivered shallbe deemed to be an original but all of which taken together shall constitute one and thesame agreement. 

                   SECTION 9.11.  Waiver of Jury Trial. Each of Acquiror, the Company andAcquiror Sub hereby irrevocably waives all right to trial by jury in any action,proceeding or counterclaim (whether based on contract, tort or otherwise) arising out ofor relating to this Agreement or the actions of Acquiror, the Company or Acquiror Sub inthe negotiation, administration, performance and enforcement thereof. 

                   SECTION 9.12.  Entire Agreement. This Agreement, the Company DisclosureSchedule, the Confidentiality Agreement and any documents delivered by the parties inconnection herewith constitute the entire agreement among the parties with respect to thesubject matter hereof and supersede all prior agreements and understandings among theparties with respect thereto. No addition to or modification of any provision of thisAgreement shall be binding upon any party hereto unless made in writing and signed by allparties hereto. 

[Signature page follows.]

                   IN WITNESS WHEREOF, Acquiror, Acquiror Sub and the Company have caused this Agreement tobe executed as of the date first written above by their respective officers thereunto dulyauthorized. 

                                                                     PILGRIM’S PRIDE CORPORATION                                                                     By  /s/ Lonnie Bo Pilgram                                                                           Lonnie “Bo” Pilgrim                                                                           Chairman of the Board

                                                                     PPC ACQUISITION CORP.                                                                     By  /s/ Lonnie Bo Pilgram                                                                           Lonnie “Bo” Pilgrim                                                                           Chairman of the Board

                                                                     WLR FOODS, INC.                                                                     By  /s/ James L. Keeler                                                                     Name:  James L. Keeler                                                                      Title:  CEO and President 

**EXHIBIT A**

**ARTICLES OF INCORPORATIONOF THE SURVIVING CORPORATION**

**ARTICLE ONENAME**

The name of the Corporation is Pilgrim’s Pride Corporation ofVirginia, Inc.

**ARTICLE TWOCAPITAL STOCK**

          Section One. Authorized Shares.The Corporation shall have authority to issue Fifty Million (50,000,000) shares of CommonStock, par value of $0.00001 per share. 

          At each annual or specialmeeting of shareholders, each holder of Common Stock shall be entitled to one (1) vote inperson or by proxy for each share of Common Stock standing in his name on the stocktransfer records of the Corporation in connection with the election of directors and allother actions submitted to a vote of shareholders.Dividends may be declared and paid to the holders of the Common Stock in cash, property,or other securities of the Corporation out of any net profits or net assets of theCorporation legally available therefor.

          All calculations with respect topercentage ownership of issued and outstanding shares of Common Stock will be based uponthe numbers of issued and outstanding shares reported by the Corporation on the last filedof (A) the Corporation’s most recent annual report on Form 10-K, (B) its most recentQuarterly Report on Form 10-Q, or (C) if any, its most recent Current Report on Form 8-K.

          Upon any liquidation,dissolution or winding up of the Corporation, whether voluntary or involuntary, theremaining net assets of the Corporation shall be distributed pro rata to the holders ofthe Common Stock in accordance with their rights and interests.

          Section Two. Preemptive Rights.No holder of any shares of Common Stock of the Corporation shall have any right as suchholder (other than such right, if any, as the Board of Directors in its discretion maydetermine) to purchase, subscribe for or otherwise acquire any unissued shares, or anyoption rights, or securities having conversion or option rights, of the Corporation now orhereafter authorized.

**ARTICLE THREEREGISTERED AGENT**

          The name of theCorporation’s registered agent is Commonwealth Legal Services Corporation. Theregistered agent is a professional corporation of attorneys registered under Section54.1-3902 of the Code of Virginia. The registered office address, which is the businessoffice of the registered agent, is 4701 Cox Road, Suite 301, Glen Allen, Virginia23060-6802, in the county of Henrico.

**ARTICLE FOURBOARD OF DIRECTORS**

          Section One. Board of Directors.The Board of Directors shall have power to manage and administer the business and affairsof the Corporation. Except as expressly limited by law, all corporate powers of theCorporation shall be vested in and may be exercised by the Board of Directors.

          Section Two. Number. The Boardshall consist of three (3) directors. 

          Section Three. Removal.Shareholders may remove one or more directors only with cause, defined as willfulmisconduct or knowing violation of criminal law or of any federal or state securities law.However, shareholders may remove one or more directors with or without cause upon arecommendation for removal without cause from the Board of Directors passed by atwo-thirds vote of the Board of Directors. 

**ARTICLE FIVELIMITATION OF LIABILITY AND INDEMNIFICATION**

          Section One. Limitation orElimination of Liability. To the full extent that the Virginia Stock Corporation Act, asit exists on the date hereof or may hereafter be amended, permits the limitation orelimination of the liability of directors or officers, a director or officer of theCorporation shall not be liable to the Corporation or its shareholders for any monetarydamages in excess of one dollar.

          Section Two. Indemnification.The Corporation shall indemnify a director or officer of the Corporation who is or was aparty to any proceeding by reason of the fact that he is or was such a director or officeror is or was serving at the request of the Corporation as a director, officer, partner,trustee, employee or agent of another corporation, partnership, joint venture, trust,employee benefit plan or other enterprise against all liabilities and expenses incurred inthe proceeding except such liabilities and expenses as are incurred because of his willfulmisconduct or knowing violation of the criminal law.

          Section 3. Determination toIndemnify. Subject to the provisions of Section 7 of this Article, a determination toindemnify a director or officer under Section 2 of this Article shall be made, in thefirst instance, by a majority vote of a quorum of the Board of Directors, such quorumconsisting of disinterested directors. If a quorum of disinterested directors cannot beobtained, then the determination shall be made by a majority vote of a committeedesignated by the Board of Directors (in which designation interested directors mayparticipate), the committee to consist solely of two or more disinterested directors. Ifsuch a committee cannot be designated, the determination shall be made by special legalcounsel selected by a majority vote of a quorum consisting of disinterested directors, or,if the same cannot be obtained, by the committee described above. If neither a quorumconsisting of disinterested directors or the committee described above can be obtained,the selection of special legal counsel shall be made by majority vote of the Board ofDirectors (in which selection interested directors may participate). Notwithstanding anyother provision of the Article, in any instance, the determination to indemnify a directoror officer may be made by vote of the shareholders, except that any shares owned, or votedunder the control of, directors or officers who are parties to the proceeding may not bevoted.

          Section 4. Advances andReimbursements of Expenses. Once a determination to indemnify has been made pursuant tothe provisions of Section 3 of this Article, the Corporation shall make advances forexpenses of, and reimbursements for expenses incurred by, any director or officer in anyproceeding described in Section 2 of this Article, upon receipt of an undertaking from thedirector or officer to repay the same if it is ultimately determined that he is notentitled to indemnification. Such undertaking shall be an unlimited, unsecured generalobligation of the director or officer and shall be accepted without reference to hisability to make repayment. The director or officer also shall furnish the Corporation witha written statement of his good faith belief that he has met the standard of conductdescribed in Va. Code 13.1-697, as amended.

          Section 5. Indemnification ofAgents and Employees. The Board of Directors may cause the Corporation to indemnify andmake advances and reimbursements to any person not specified in Section 2 of this Articlewho was or is a party to any proceeding by reason of the fact that he is or was anemployee or agent of the Corporation, or is or was serving at the request of theCorporation as a director, officer, partner, trustee, employee or agent of anothercorporation, partnership, joint venture, trust, employee benefit plan or other enterprise,to the same extent as if such person were specified as one to whom indemnification isgranted in Section 2. The provisions of Section 2 through 4 of this Article shall beapplicable to any indemnification, determination, advancements and reimbursements providedpursuant to this Section.

          Section 6. IndemnificationInsurance. The Corporation may purchase and maintain insurance to indemnify it against thewhole or any portion of the liability assumed by it in accordance with this Article, andalso may procure insurance in such amounts as the Board of Directors may determine onbehalf of any person who is or was a director, officer, employee or agent of theCorporation, or is or was serving at the request of the Corporation as a director,officer, partner, trustee, employee or agent of another corporation, partnership, jointventure, trust, employee benefit plan or other enterprise, against liability assertedagainst or incurred by any such person in any such capacity or arising from his status assuch, whether or not the Corporation would have power to indemnify him against suchliability under the provisions of this Article.

          Section 7. Changes in the BoardComposition. In the event there has been a change in the composition of a majority of theBoard of Directors after the date of the alleged act or omission with respect to whichindemnification is claimed, any determination as to indemnification, advancement orreimbursement of expenses with respect to any claim for indemnification made pursuant toSections 2 or 5 of this Article shall be made by special legal counsel agreed upon by theBoard of Directors and the proposed indemnitee. If the Board of Directors and the proposedindemnitee are unable to agree upon such special legal counsel, the Board of Directors andthe proposed indemnitee each shall select a nominee, and the nominee shall select suchspecial legal counsel.

           Section 8. Applicabilityof this Article. The provisions of this Article shall be applicable to all actions,claims, suits or proceedings commenced after the adoption hereof, whether arising from anyaction taken or failure to act before or after such adoption. No amendment, modificationor repeal of this Article shall diminish the rights provided hereby or diminish the rightto indemnification with respect to any claim, issue or matter in any then pending orsubsequent proceeding that is based in any material respect on any alleged action orfailure to act prior to such amendment, modification or appeal. Reference herein todirectors, officers, employees or agents shall include former directors, officers,employees and agents and their respective heirs, executors and administrators. 

**ARTICLE SIXAMENDMENTS**

          Where a shareholder vote isrequired by Virginia law, the Articles of Incorporation of the Corporation shall beamended by approval of the holders of a majority of all votes entitled to be cast providedsuch amendment has been recommended for approval to the shareholders of the Corporation bya majority of the Board of Directors. Where no shareholder vote is required by Virginialaw, the Articles of Incorporation of the Corporation shall be amended by a vote of theCorporation’s Board of Directors without shareholder action. 

**ARTICLE SEVENAFFILIATED TRANSACTIONS**

          Pursuant to Virginia CodeSection 13.1-727, the Corporation expressly elects not to be governed by Title 13.1,Chapter 9, Article 14, Affiliated Transactions, as amended, of the Virginia Code. 

**ARTICLE EIGHTCONTROL SHARE ACQUISITIONS**

          Pursuant to Virginia CodeSection 13.1-728.2, the Corporation expressly elects not to be governed by Title 13.1,Chapter 9, Article 14.1, Control Share Acquisitions, as amended, of the Virginia Code withrespect to acquisitions of shares of the Corporation.