Zoom in tight on the large ellipse. Use the Pen Tool to draw a continuous series of zig-zags using the large ellipse for a guide as shown. The path needs to be closed. You'll know it's closed when you can apply a solid fill. If you want, you can marquee select the beard shape with the Shape Editor Tool and click the Smooth Join S button on the InfoBar (the one with the upside-down U). This will make the beard shape softer.