<PAGE>
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 13, 1995
To the Shareholders of Tyson Foods, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Tyson
Foods, Inc., a Delaware corporation (the "Company"), will be held at the
Walton Arts Center, 495 West Dickson Street, Fayetteville, Arkansas, on
Friday, January 13, 1995, at 10:00 a.m., local time, for the following
purposes:
1. To fix the number of directors for the ensuing year at ten and to
elect ten directors.
2. To approve the adoption of the Senior Executive Performance Bonus
Plan.
3. To approve amendments to the Amended and Restated Nonstatutory
Stock Option Plan.
4. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on November 21, 1994,
will be entitled to vote at the Annual Meeting and any adjournments
thereof. A list of shareholders entitled to vote at the Annual Meeting
will be maintained during the ten-day period preceding the meeting at the
office of the Company's General Counsel, 933 Tanglebriar, Fayetteville,
Arkansas 72701.
The Company's Proxy Statement is submitted herewith. The Annual Report for
the fiscal year ended October 1, 1994, is being mailed to shareholders
together with this Notice and Proxy Statement.
By Order of the Board of Directors
Mary Rush
Secretary
Springdale, Arkansas
December 6, 1994
YOUR VOTE IS IMPORTANT
You are cordially invited to attend the meeting. HOWEVER, WHETHER OR NOT
YOU PLAN TO ATTEND, YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR
PROXY SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND
IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH
PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT LATER OR VOTE YOUR SHARES IN
PERSON IN THE EVENT YOU SHOULD ATTEND THE MEETING.
<PAGE>
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
On January 13, 1995 and any Adjournments
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
Tyson Foods, Inc. (the "Company"). It is for use only at the Annual Meeting
of Shareholders to be held at the Walton Arts Center, 495 West Dickson
Street, Fayetteville, Arkansas, on Friday, January 13, 1995, at 10:00 a.m.,
local time, and any adjournments thereof.
Any shareholder executing a proxy retains the right to revoke it at any
time prior to exercise at the Annual Meeting. A proxy may be revoked by
delivery of written notice of revocation to the Secretary of the Company,
by execution and delivery of a later proxy or by voting the shares in
person at the Annual Meeting. If not revoked, all shares represented by
properly executed proxies will be voted as specified therein.
This proxy material is first being mailed to shareholders on or about
December 6, 1994.
OUTSTANDING STOCK AND VOTING RIGHTS
As of October 1, 1994, the outstanding shares of the Company's capital
stock consisted of 76,745,002 shares of Class A Common Stock and 68,455,438
shares of Class B Common Stock. The holders of record of the shares of
Class A Common Stock and Class B Common Stock outstanding on November 21,
1994, will vote together as a single class on all matters hereby submitted
to shareholders and such other matters as may properly come before the
Annual Meeting and any adjournments thereof. Each share of Class A Common
Stock will entitle the holder to one vote and each share of Class B Common
Stock will entitle the holder to ten votes on all such matters. The stock
transfer books of the Company will not be closed.
The enclosed form of proxy provides a method for shareholders to withhold
authority to vote for any one or more of the nominees for director while
granting authority to vote for the remaining nominees. The names of all
nominees are listed on the proxy card. If you wish to grant authority to
vote for all nominees, check the box marked "FOR." If you wish to withhold
authority to vote for all nominees, check the box marked "WITHHOLD." If
you wish your shares to be voted for some nominees and not for one or more
of the others, check the box marked "FOR" and indicate the name(s) of the
nominee(s) for whom you are withholding the authority to vote by listing
the name(s) of such nominee(s) in the space provided. If you checked the
box marked "WITHHOLD" your vote will be treated as an abstention and
accordingly your shares will neither be voted for nor against a director
but will be counted for quorum purposes. Broker "non-votes" are not
relevant to the determination of whether the proposal to elect directors
has been approved, however they will be counted for quorum purposes.
The enclosed form of proxy also provides a method for shareholders to
abstain from voting with respect to the proposals to approve the adoption
of the Senior Executive Performance Bonus Plan and amend the Amended and
Restated Nonstatutory Stock Option Plan (the "Plan Proposals"). By
<PAGE>
abstaining, shares would not be voted either for or against the Plan
Proposals but would be counted for quorum purposes. While there may be
instances in which a shareholder will wish to abstain, the Board of
Directors encourages all shareholders to vote their shares in their best
judgment and to participate in the voting process to the fullest extent
possible. Broker "non-votes" are not relevant to the determination of
whether the Plan Proposals have been approved, but will be counted for
quorum purposes.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of October 1, 1994,
regarding the only persons known by the Company to own, directly or
indirectly, more than 5% of either of its two classes of Common Stock:
<TABLE>
<CAPTION>
==========================================================================
Name and Address of Number of Shares Percent
Beneficial Owner Title of Class Beneficially Owned of Class
==========================================================================
<S> <C> <C> <C>
Don Tyson and Class B Common Stock 68,399,040(1) 99.9
Tyson Limited Partnership
2210 W. Oaklawn Drive
Springdale, AR 72762-6999
</TABLE>
(1) Includes 300,000 shares of Class B Common Stock owned of record by Don
Tyson, Chairman of the Board of the Company, and 68,099,040 shares of Class
B Common Stock owned of record by the Tyson Limited Partnership, a Delaware
limited partnership (the "Partnership"). Don Tyson has a 54.4464 combined
percentage interest as a general and limited partner in the Partnership and
the Estate of Randal Tyson has a 44.9297 percentage interest as a limited
partner in the Partnership. Barbara Tyson has limited dispositive power
with respect to, and is the principal income beneficiary of, the Estate of
Randal Tyson. Don Tyson's adult children, including John H. Tyson, are
contingent beneficiaries of such estate. The managing general partner of
the Partnership is Don Tyson. The other general partners are Leland E.
Tollett, Director, Vice Chairman of the Board, Chief Executive Officer and
President of the Company; Joe Fred Starr, Director and Vice President of
the Company; John H. Tyson, Director and President of the Beef and Pork
Division of the Company; James B. Blair, General Counsel to the Company;
and Harry C. Erwin, Jr. Don Tyson, as managing general partner, has the
exclusive right, subject to certain restrictions, to do all things on
behalf of the Partnership necessary to manage, conduct, control and operate
the Partnership's business, including the right to vote all shares or other
securities held by the Partnership, as well as the right to mortgage,
pledge, or grant security interests in any assets of the Partnership. The
Partnership terminates December 31, 2040. Additionally, the Partnership may
be dissolved upon the occurrence of certain events, including (i) a written
determination by the managing general partner that the projected future
revenues of the Partnership will be insufficient to enable payment of costs
and expenses, or that such future revenues will be such that continued
operation of the Partnership will not be in the best interest of the
partners, (ii) an election to dissolve the Partnership by the managing
general partner that is approved by the affirmative vote of a majority in
percentage interest of all general partners and (iii) the sale of all or
substantially all of the Partnership's assets and properties. The
withdrawal of the managing general partner or any other general partner
2
<PAGE>
(unless such partner is a sole remaining general partner) will not cause a
dissolution of the Partnership. Upon dissolution of the Partnership, each
partner, including all limited partners, will receive in cash or otherwise,
after payment of creditors, loans from any partner, and return of capital
account balances, their respective percentage interests in the Partnership
assets. In addition to the above-listed shares of Class B Common Stock,
the Partnership also is the record owner of 600,000 shares of Class A
Common Stock of the Company.
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
The following table sets forth information with respect to the beneficial
ownership of the Company's two classes of Common Stock, as of October 1,
1994, by its directors, nominees for election as directors, named executive
officers and by all directors and executive officers as a group:
<CAPTION>
===========================================================================
Shares of Percent of Shares of Percent of
Class A Outstanding Class B Outstanding
Common Stock Class A Common Stock Class B
Beneficially Common Beneficially Common
Name of Beneficial Owner Owned(1) Stock Owned(1) Stock
===========================================================================
<S> <C> <C> <C> <C>
Don Tyson 1,001,527(2) 1.3 68,399,040(3) 99.9
Leland Tollett(4) 2,069,666 2.7
Joe F. Starr(4) 1,423,760(5) 1.9
Neely Cassady 817,908 1.1
John H. Tyson(4)(6) 196,217(7) *
Barbara Tyson(6) 101,103 *
Fred S. Vorsanger 34,000 *
Shelby Massey 3,852 *
Lloyd V. Hackley 5,800 *
Donald Wray 487,676 *
Gerald Johnston 599,444(7) *
David Purtle 53,790 *
All Directors and Executive
Officers as a group 7,218,139 9.4 68,399,040 99.9
(21 persons)
</TABLE>
*Indicates ownership of less than 1% of the indicated class of the
Company's common stock.
(1) Includes beneficial ownership of shares with respect to which voting
or investment power may be deemed to be directly or indirectly controlled.
Accordingly, the shares shown in the foregoing table include shares owned
directly, shares held in such person's accounts under the Company's
employee stock purchase plan, shares owned by certain of the individual's
family members and shares held by the individual as a trustee or in a
fiduciary or other similar capacity, unless otherwise disclaimed and/or
described below. Also includes shares subject to presently exercisable
options held by certain named individuals.
(2) Includes 600,000 shares of Class A Common Stock owned of record by the
Tyson Limited Partnership.
(3) Includes all shares of Class B Common Stock owned of record by the
Tyson Limited Partnership as described in Footnote 1 to the Principal
Shareholders table.
3
<PAGE>
(4) Does not include any shares of Class A and Class B Common Stock owned
of record by the Tyson Limited Partnership of which Leland Tollett, Joe F.
Starr and John H. Tyson have a general partnership interest. See Footnote 1
to the Principal Shareholders table.
(5) Does not include 493,000 shares of Class A Common Stock held by the
Tyson Foundation, a nonprofit charitable organization. Mr. Starr is a
trustee of the Foundation and disclaims beneficial ownership of all such
shares.
(6) Does not include Class B Common Stock owned of record by the Tyson
Limited Partnership nor 469,646 shares of Class A Common Stock owned by the
Estate of Randal Tyson.
(7) Does not include 1,500,000 shares of Class A Common Stock held by a
trust established for the Company's profit sharing plan for which John H.
Tyson, an executive officer and a director of the Company, and Gerald
Johnston, an executive officer of the Company, serve as trustees. Each
trustee disclaims beneficial ownership of such shares.
ELECTION OF DIRECTORS
The Company's Board of Directors for the ensuing year will consist of ten
members who are to be elected for a term of one year or until their
successors are duly elected and qualified. The following slate of ten
nominees has been chosen by the Board of Directors, and the Board
recommends that each be elected.
Don Tyson, Age 64; Chairman of the Board of Directors of the Company. Mr.
Tyson has been a director of the Company since 1952. He served as Chief
Executive Officer of the Company until March 1991.
Joe F. Starr, Age 61; Vice President of the Company and member of the Board
of Directors of the Company. Mr. Starr was a member of the Board of
Directors of Worthen National Bank of Northwest Arkansas, Fayetteville,
Arkansas, from 1980 to 1991. Mr. Starr has served the Company as a
director since 1969.
John H. Tyson, Age 41; President, Beef and Pork Division and Director of
Governmental, Media and Public Relations. Mr. Tyson has also served the
Company as Vice President and Director of Engineering/Environmental/Capital
Spending, as Vice President, Marketing/Corporate Accounts and as Special
Projects Manager. Mr. Tyson has been a director of the Company since 1984.
Leland E. Tollett, Age 57; Vice Chairman, Chief Executive Officer and
President of the Company. He is also a member of the Board of Directors of
Worthen Banking Corporation. Mr. Tollett has been President and Chief
Executive Officer of the Company since March 1991 and prior to that time
was President and Chief Operating Officer since 1981. He has been a
director of the Company since 1984.
Shelby Massey, Age 61; farmer and private investor. Mr. Massey served as
Senior Vice Chairman of the Board of Directors of the Company from 1985 to
1988. He has been a director of the Company since 1985.
Neely Cassady, Age 66; Chairman of the Board and Chief Executive Officer of
Sunmark and Chairman of the Board of Cassady Associates, Inc. and it's
affiliate, H.K. Brewer Electric in Little Rock, Arkansas. Mr. Cassady is
an Arkansas State Senator serving since January 1983. Mr. Cassady has been
a director of the Company since 1974.
4
<PAGE>
Fred S. Vorsanger, Age 66; private business consultant, Walton Arena
Manager and Vice President (Emeritus) of the University of Arkansas. He is
a director of McIlroy Bank & Trust Co. of Fayetteville and has served as
Mayor and director of the City of Fayetteville, Arkansas. Mr. Vorsanger
served as a Vice President of the University of Arkansas from 1968 until
1988. He has been a director of the Company since 1977.
Barbara Tyson, Age 45; Vice President of the Company. Ms. Tyson has served
in related capacities for the last five years and was previously a Regional
Sales Manager in the Food Service Division. Ms. Tyson has been a director
of the Company since 1988.
Lloyd V. Hackley, Age 53; Chancellor and Tenured Professor of Political
Science at the Fayetteville State University, Fayetteville, North Carolina,
since January 1988. Mr. Hackley has been a director of the Company since
1992 after serving one year as a nonvoting advisory director.
Donald E. Wray, 57; Chief Operating Officer of the Company. Mr. Wray was
appointed Chief Operating Officer in 1991 after serving as Senior Vice
President, Sales and Marketing Division since 1985, Senior Vice President
of Processing, Sales and Marketing Division since 1983 and Executive Vice
President of Sales and Marketing since 1981. Mr. Wray has been a director
of the Company since January 1994.
Each of the foregoing nominees is currently serving as a director of the
Company. Except for Mr. Donald E. Wray, each was elected at the last Annual
Meeting of Shareholders. Mr. Wray was elected by the Board subsequent to
the Annual Meeting. John Tyson is the son of Don Tyson. Barbara Tyson is
the widow of Randal Tyson, who was the brother of Don Tyson and uncle of
John Tyson. There are no other family relationships among the foregoing
nominees. By reason of their beneficial ownership of the Company's common
stock, Don Tyson and the Tyson Limited Partnership are deemed to be
controlling persons of the Company. None of the companies or organizations
listed above is a parent, subsidiary or affiliate of the Company.
Unless otherwise designated, the enclosed proxy will be voted for the
election of the foregoing ten nominees as directors. To be elected as a
director, each nominee must receive the favorable vote of a majority of the
votes cast at the meeting. Shareholders are not entitled to cumulate voting
with respect to the election of directors. The Board of Directors does not
contemplate that any of the nominees will be unable to stand for election,
but should any nominee become unavailable for election, all proxies will be
voted for the election of a substitute nominated by the Board of Directors.
The Board of Directors does not have a standing nominating committee. The
Board nominates persons to be nominees for director and will consider
suggestions by shareholders for names of possible future nominees delivered
in writing to the Secretary of the Company on or before September 30 in any
year. The Board has a compensation committee whose primary function is to
oversee the administration of the Company's employee benefit plans and
establish the Company's compensation policies. See "Report of Compensation
Committee" contained herein. This committee, comprised of Shelby Massey,
Fred Vorsanger and Neely Cassady met two times and held one special
telephonic meeting during fiscal 1994. On November 18, 1994, the
Compensation Committee established a special subcommittee thereof comprised
of Neely Cassady and Fred Vorsanger for the purpose of adopting and/or
administering one or more performance-based plans in accordance with the
5
<PAGE>
Omnibus Budget Reconciliation Act of 1993. The special subcommittee met
one time during fiscal 1994. See "Proposal to Approve the Adoption of the
Senior Executive Performance Bonus Plan" below. The Board has an audit
committee to assist it in fulfilling its fiduciary responsibilities for the
financial reporting of the Company. Members of the audit committee are Fred
Vorsanger, Neely Cassady and John Tyson. The audit committee met four times
during fiscal 1994.
The Board of Directors held four regularly scheduled meetings and one
telephonic meeting in fiscal 1994. All current directors attended at least
75% of the meetings.
PROPOSAL TO APPROVE THE ADOPTION OF THE SENIOR EXECUTIVE
PERFORMANCE BONUS PLAN
In August 1993 Congress adopted the Omnibus Budget Reconciliation Act of
1993 ("OBRA"), which provides that, among other things, publicly-held
companies are limited as to business expense deductions for certain covered
executive officers to the extent that such executive officers' compensation
exceeds $1 million in any one year. This deduction limitation does not
apply, however, if the compensation is "performance based" in that it is
determined solely on account of the attainment of one or more
preestablished, objective performance goals approved and administered by a
committee of "outside directors" (as defined by OBRA).
In order to comply with OBRA, and to avoid the possible loss of
deductibility by the Company of certain future compensation payments, the
Company is proposing a Senior Executive Performance Bonus Plan (the
"Performance Plan") which will condition the payment of cash bonuses to
certain of the Company's Senior Executives upon the attainment of specific
performance criteria as described below. The Performance Plan has been
adopted by a Special Committee of outside directors (the "Special
Committee") subject to approval by the Company's shareholders at the Annual
Meeting. If shareholders do not approve the Performance Plan, no payments
will be made thereunder. If approved, the Performance Plan will continue
in effect for each fiscal year of the Company until terminated by the
Special Committee.
The Performance Plan will be administered by the Special Committee, which
shall have the sole authority, subject to the limitations set forth in the
Performance Plan or otherwise imposed by OBRA, to adopt, amend, and/or
rescind such rules and regulations, and to make such other determinations,
as it deems necessary or advisable, in its discretion, for the
administration of the plan.
The Company's senior executives currently eligible to participate in the
Performance Plan are Don Tyson, Chairman of the Company and Leland Tollett,
Vice Chairman, President and Chief Executive Officer of the Company;
however, the Special Committee retains discretion to designate additional
senior executives to participate in the Performance Plan in the future.
Bonuses will be awarded under the Performance Plan for each fiscal year
that the Company attains income before federal and state income taxes ("Pre-
Tax Income"), excluding special nonrecurring charges or items, commencing
with the Company's fiscal year ending September 30, 1995.
Each participant under the Performance Plan is entitled to receive a pro
rata percentage of a bonus pool (the "Bonus Pool"). The aggregate amount
6
<PAGE>
of the Bonus Pool for any fiscal year shall be equal to 1% of the Pre-Tax
Income for the fiscal year, plus an amount equal to .5% of the increase in
Pre-Tax Income over the prior fiscal year. The Special Committee will,
however, retain at all times full discretion to reduce or eliminate bonus
payments otherwise payable under the Performance Plan. Prior to payment of
any amounts under the Performance Plan the Special Committee shall certify
in writing that the Company achieved the amount of Pre-Tax Income used to
calculate the Bonus Pool, and that the calculation of the Bonus Pool and
determination of the amount of bonus to be paid to each participant was
correct.
Although the Performance Plan is not effective for fiscal 1994, pursuant to
Securities and Exchange Commission rules the following table sets forth the
maximum amount of bonuses that would have been paid to participants under
the Performance Plan had its performance criteria been applied to, and
bonuses paid for, fiscal 1994:
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
SENIOR EXECUTIVE PERFORMANCE BONUS PLAN
Name and Position Dollar Value(1)(2)
================= ==================
<S> <C>
Don Tyson, Chairman $2,407,958
Leland Tollett, President and
Chief Executive Officer $1,031,982
</TABLE>
(1) The above amounts represent the maximum bonuses that could have been
paid. The Special Committee retains authority to reduce or eliminate the
amount of bonuses payable if it deems such reduction appropriate or in the
best interest of the Company.
(2) For actual bonuses paid to these individuals during fiscal 1994 see
"Summary Compensation Table" on page 11.
Approval of the Performance Plan will require the affirmative vote of the
majority of votes cast by the holders of the Class A Common Stock and Class
B Common Stock voting together as a single class. The Board recommends a
vote FOR the proposal to approve the adoption of the Performance Plan.
PROPOSAL TO APPROVE AMENDMENTS TO
AMENDED AND RESTATED NONSTATUTORY STOCK OPTION PLAN
The Company's Amended and Restated Nonstatutory Stock Option Plan of 1982
(the "NSO Plan") was originally adopted and approved by the shareholders of
the Company on February 25, 1983. The NSO Plan was adopted for the purpose
of providing key employees the opportunity to acquire a proprietary
interest in the Company through the purchase of shares of Class A Common
Stock, thereby more closely aligning their interests with that of the
Company's shareholders.
At the Annual Meeting, shareholders will be requested to approve and ratify
the following amendments to the NSO Plan (the "NSO Plan Proposal"): 1) an
increase in the number of shares reserved for issuance from 1,500,000 to
5,500,000; 2) the establishment of 2% of the aggregate shares authorized
7
<PAGE>
under the NSO Plan as the maximum number of shares with respect to which
stock options and stock appreciation rights ("SARs") may be granted to an
executive officer during any calendar year; and 3) the extension of the
expiration date of the NSO Plan to March 31, 2000. Each component of the
NSO Plan Proposal has been approved by the Board of Directors.
The NSO Plan currently authorizes the granting of stock options and SARs to
purchase or acquire up to 1,500,000 shares of Class A Common Stock. As of
October 1, 1994, approximately 71,950 shares of Class A Common Stock were
available for issuance under the NSO Plan. The NSO Plan Proposal would
increase the maximum amount of shares authorized for issuance under the NSO
Plan to 5,500,000, subject to adjustment as provided in the NSO Plan for
certain changes in the Company's capital structure (the "Total Authorized
Shares"), and the number of shares currently available for grant thereunder
to 4,071,950.
The Company also has outstanding an Amended and Restated Incentive Stock
Option Plan (the "ISO Plan") which, as of October 1, 1994 had approximately
132,696 shares of Class A Common Stock available for issuance thereunder.
The ISO Plan is substantially similar to the NSO Plan except that the ISO
Plan originally provided for the grant of both Nonqualified Options (as
defined below) and Incentive Stock Options (within the meaning of Section
422 of the Internal Revenue Code of 1986 (the "Code"). Although the
Company may continue to effect limited grants under the ISO Plan, it is the
Company's current intention to primarily utilize the NSO Plan in the
future.
As discussed under the caption "Proposal to Approve the Adoption of the
Senior Executive Performance Bonus Plan" on page 6 hereof, OBRA provides,
among other things, that publicly-held companies may be limited as to
income tax deductions for covered executive officers to the extent that
their total compensation exceeds $1 million in any one year. The proposed
regulations interpreting OBRA provide that stock options and SARs will be
exempt under OBRA where such instruments are granted by a committee
comprised of two or more outside directors and the grants are made pursuant
to a plan which has been originally approved by shareholders. While the
NSO Plan satisfies these requirements, an additional condition to exemption
requires that option plans set forth a maximum number of stock options or
SARs that may be awarded to executive officers in any one year. Thus, in
order to comply with OBRA and avoid the possible loss of future federal
income tax deductions attributable to stock options and SARs granted under
the NSO Plan, the Board has approved an amendment of the NSO Plan that
would establish 2% of the total shares authorized for issuance under the
NSO Plan (i.e., currently 2% of 5,500,000) as the maximum number of shares
that may be subject to stock options and SARs granted to an executive
officer during any calendar year.
The NSO Plan, which has previously been administered by the full
Compensation Committee, will now be solely administered by the Special
Committee. Under the NSO Plan, the Special Committee may, in its
discretion, grant options which are not subject to, and do not meet the
requirements for special tax treatment under the Code ("Nonqualified
Options"). Any options granted must have an exercise period of no more
than ten years. Additionally, the exercise price per share for each option
may not be less than the fair market value of the underlying shares on the
date of the grant. Options may be exercised upon notice to the Company and
payment of the option exercise price in cash. Additionally, if approved by
8
<PAGE>
the Special Committee the exercise price for an option may also be
satisfied by delivery of already owned shares of Class A Common Stock,
valued at its fair market value as of the time of exercise, or a
combination of shares and cash, equal in the aggregate to the option
exercise price.
The NSO Plan was originally scheduled to expire in December, 1992. Prior
to such expiration, the Board extended the Plan to March 31, 2000. The
Board is now asking the shareholders to ratify and approve such extension.
In addition to options, the NSO Plan also provides for the grant of SARs
which may be granted either (i) alone, (ii) simultaneously with the grant
of an option and in conjunction therewith or in the alternative thereto, or
(iii) subsequent to the grant of an option. An SAR entitles the holder,
upon exercise of such SAR, to receive from the Company shares of Class A
Common Stock, cash or any combination of the two as specified in the
exercise request (but subject to the approval of the Special Committee with
respect to any cash payment) having an aggregate value equal to the product
of (i) the excess of the fair market value on the date of exercise over the
exercise price per share specified in such SAR or its related option,
multiplied by (ii) the number of shares for which such SAR may be
exercised.
Under currently applicable provisions of the Code, an optionee will not be
deemed to receive any income for federal income tax purposes upon the grant
of any option or SAR under the NSO Plan, nor will the Company be entitled
to a tax deduction at that time. Upon the exercise of a Nonqualified
Option or SAR, the optionee will be deemed to have received ordinary income
in an amount equal to the difference between the exercise price and the
market price of the shares on the exercise date. The Company will be
allowed an income tax deduction equal to the excess of market value of the
shares on the date of exercise over the cost of such shares to the
optionee.
As noted above, the NSO Plan provides that "key employees" of the Company
are eligible to participate therein. The term "key employee" is defined to
include employees, officers, directors, consultants and independent
contractors who render services which tend to materially contribute to the
success of the Company. No determination has been made with respect to
future recipients of options or SARs under the NSO Plan and it is not
possible to specify the names or positions of persons to whom options or
SARs will be granted, or the number of shares, within the limitations of
the NSO Plan, as amended, to be covered by such options or SARs. However,
as required by Securities and Exchange Commission rules, the following
table shows the number and dollar value benefit of all options granted
during fiscal 1994 to (i) the Chairman of the Board, (ii) the Chief
Executive Officer, (iii) each of the four most highly compensated executive
officers, (iv) all current executive officers as a group, (v) all non-
executive directors as a group, and (vi) all non-executive officers and
employees as a group:
9
<PAGE>
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
=================================================
Number of
Name and Position Dollar Value Options(1)
================= ============ ==========
<S> <C> <C>
Don Tyson $-0- -0-
Chairman of the Board
Leland Tollett -0- -0-
President and Chief Executive Officer
Donald Wray -0- -0-
Chief Operating Officer
Gerald Johnston -0- -0-
Executive V.P., Finance
David Purtle -0- -0-
Group V.P., Operations
Executive Group 83,750(2) 33,500
Non-Executive Director Group -0- -0-
Non-Executive Officer Employee Group $1,893,750(2) 787,500
</TABLE>
(1) Represents fiscal 1994 option grants.
(2) Dollar value benefit based upon closing price of Company's Class A
Common Stock as of October 1, 1994. These options were granted at an
exercise price of $21.50 per share, which was the fair market value of the
underlying shares on the date of grant.
On October 1, 1994, the closing price of the Company's Class A Common
Stock, as listed on the Nasdaq National Market was $24.00 per share.
Approval of the NSO Plan Proposal will require the affirmative vote of the
holders of a majority of the shares of Class A Common Stock and Class B
Common Stock voting together as a single class and present, in person or by
proxy, and entitled to vote at the Annual Meeting. The Board recommends a
vote FOR the NSO Plan Proposal.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows all the cash compensation paid or to be paid by
the Company or any of its subsidiaries, as well as certain other
compensation paid or accrued, during the fiscal years indicated, to the
Chairman, the Chief Executive Officer, and the three highest paid executive
officers of the Company for such period in all capacities in which they
served:
10
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
-------------------- --------------------
(a) (b) (c) (d) (e) (f) (g)
Name and Other Annual All Other
Principal Salary Bonus Compensa- Options/ Compensa-
Position Year ($) ($) tion($) SARs tion(4,5,6)
===========================================================================
<S> <C> <C> <C> <C> <C> <C>
Don Tyson,
Chairman of the Board
1994 $630,000$ 792,000 $723,756(1) -- $142,147
1993 600,000 350,000 784,651(2) -- 153,202
1992 600,000 1,528,750 212,782(3) -- 154,602
Leland E. Tollett,
President and Chief Executive Officer
1994 513,750 660,000 N/A -- 38,776
1993 485,000 115,000 N/A 12,500 44,335
1992 482,917 495,000 N/A -- 34,786
Donald Wray,
Chief Operating Officer
1994 299,955 247,500 N/A -- 23,551
1993 267,485 112,719 N/A 12,500 22,997
1992 253,542 194,000 N/A -- 21,207
Gerald Johnston,
Executive V.P., Finance
1994 243,830 151,250 N/A -- 19,276
1993 227,109 98,189 N/A 12,500 19,505
1992 213,917 169,000 N/A -- 18,156
David Purtle,
Group V.P., Operations
1994 246,163 151,250 N/A -- 19,381
1993 230,137 95,161 N/A 12,500 19,510
1992 219,916 158,500 N/A -- 18,316
</TABLE>
(1) In 1994, "Other Annual Compensation" for Mr. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $412,637 and $299,539, respectively.
(2) In 1993, "Other Annual Compensation" for Mr. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $435,233 and $339,588, respectively.
(3) In 1992, "Other Annual Compensation" for Mr. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $155,004 and $57,778, respectively.
(4) In 1994, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Johnston and Purtle: (i) Company matching
contributions to the Employee Stock Purchase Plan of $31,500; $25,687;
$14,998; $12,192 and $12,308 for each named executive, respectively, and
(ii) Company contributions to the Executive Savings Plan of $20,230;
$13,089; $8,553; $7,084 and $7,073 on behalf of each named executive,
11
<PAGE>
respectively, to match a portion of 1994 pretax elective deferral
contributions (included under salary) made by each person to such plans.
Also includes $90,417, representing the dollar value benefit of premium
payments under split dollar life insurance policies on Mr. Tyson for which
the Company will be reimbursed for premiums paid.
(5) In 1993, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Johnston and Purtle: (i) Company matching
contributions to the Employee Stock Purchase Plan of $30,000; $24,240;
$13,374; $11,356 and $11,507 for each named executive, respectively, and
(ii) Company contributions to the Executive Savings Plan of $34,600;
$20,095; $9,497; $8,149 and $8,003 on behalf of each named executive,
respectively, to match a portion of 1993 pretax elective deferral
contributions (included under salary) made by each person to such plans.
Also includes $88,602, representing the dollar value benefit of premium
payments under split dollar life insurance policies on Mr. Tyson for which
the Company will be reimbursed for premiums paid.
(6) In 1992, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Johnston and Purtle: (i) Company matching
contributions to the Employee Stock Purchase Plan of $30,000; $24,146;
$12,677; $10,696 and $10,996 for each named executive, respectively, and
(ii) Company contributions to the Executive Savings Plan of $36,600;
$10,640; $8,530; $7,460 and $7,320 on behalf of each named executive,
respectively, to match a portion of 1992 pretax elective deferral
contributions (included under salary) made by each person to such plans.
Also includes $20,543, representing the dollar value benefit of premium
payments under split dollar life insurance policies on Mr. Tyson for which
the Company will be reimbursed for premiums paid.
<TABLE>
OPTION/SAR EXERCISES AND HOLDINGS
=================================
The following table sets forth information with respect to the named
executives concerning unexercised options and SARs held as of the end of
the fiscal year. There were no options exercised during 1994.
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
===========================================================================
Number of Value of Unexercised
Unexercised in-the-Money
Options/SARs at Options/SARs at
FY-End(#) FY-End($)
--------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Don Tyson -- -- -- --
Leland Tollett 18,000 21,500 $297,000 $178,188
Donald Wray 24,000 18,500 396,000 128,688
Gerald Johnston 18,000 18,500 297,000 128,688
David Purtle 24,000 18,500 396,000 128,688
12
<PAGE>
Director Compensation
- ---------------------
Neely Cassady, Fred S. Vorsanger, Lloyd V. Hackley and Shelby Massey,
outside directors serving on the board, received an annual retainer of
$20,000, while Don Tyson, Leland Tollett, Joe Fred Starr, John H. Tyson,
Barbara Tyson and Donald Wray, directors who are also employees of the
Company, received $1,500 per meeting. Outside directors are compensated at
the rate of $1,000 per day for time spent on board-related activities.
Arrangement Upon Termination of Employment
- ------------------------------------------
The Company has an employment contract with Don Tyson which provides for
his active employment at a minimum salary of $720,000 per annum through
December 31, 1995, which employment is automatically extended for
successive one year periods thereafter, unless terminated by either the
Company or Mr. Tyson upon proper notice. If Mr. Tyson becomes disabled
while serving as a full-time employee of the Company, he would be entitled
to an annual salary during the period of such disability in an amount equal
to the lesser of (i) one-half of his average total compensation (salary
plus bonuses) for the three years immediately prior to the date of his
disability, or (ii) $720,000, as adjusted to reflect increases in the
Consumer Price Index. In the event of his death while serving as a full-
time employee of the Company, annual payments would be made to his heirs
for a period of ten years in an amount equal to (i) 50% of his average
annual salary for the three years immediately prior to the date of his
death, or (ii), if Mr. Tyson dies while receiving disability payments, the
amount of his annual disability benefits. The death and disability benefits
are funded by life insurance paid for by the Company of which it is also
the sole beneficiary. Upon Mr. Tyson's retirement from active employment,
he will receive for the remainder of his life annual compensation for
certain advisory services he has agreed to perform in an amount equal to
his disability benefits, calculated from the date of his retirement. The
contract provides that the Company may not merge or consolidate with any
other organization unless such organization expressly assumes the duties of
the Company set forth in the contract. Accordingly, the contract could have
the effect of deterring attempts to acquire control of the Company which
involve such transactions and are opposed by Mr. Tyson.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors was comprised during
fiscal 1994 of Messrs. Shelby Massey, Fred Vorsanger and Neely Cassady. The
Committee oversees the administration of the Company's employee benefit
plans and establishes policies relating to compensation of employees. All
decisions by the Compensation Committee relating to the compensation of the
Company's executive officers are reviewed by the full Board, except for
decisions relating to awards under certain of the Company's performance
based compensation plans which require approval and administration by a
committee comprised solely of "outside directors". Effective November 18,
1994, the Compensation Committee approved the formation of a special
subcommittee, comprised of Messrs. Vorsanger and Cassady, for the purpose
of administering such plans.
The following is a report submitted by the above-listed committee members
in their capacity as the Board's Compensation Committee, addressing the
13
<PAGE>
Company's compensation policy as it related to executive officers for
fiscal 1994.
Compensation Policy
- -------------------
The goal of the Company's executive compensation policy is to ensure that
an appropriate relationship exists between executive pay and the creation
of shareholder value, while at the same time motivating and retaining key
employees. To achieve this goal, the Company's executive compensation
policies integrate annual base compensation with bonuses based upon
corporate performance and individual initiatives and performance.
Measurement of corporate performance is primarily based on Company goals
and industry performance levels. Accordingly, in years in which
performance goals and industry levels are achieved or exceeded, executive
compensation tends to be higher than in years in which performance is below
expectations. Annual cash compensation, together with the payment of
equity-based, incentive and deferred compensation is designed to attract
and retain qualified executives and to ensure that such executives have a
continuing stake in the long-term success of the Company. All executive
officers, and management in general, are eligible for and do participate in
incentive and deferred compensation plans.
In 1993, Congress enacted the Omnibus Budget Reconciliation Act of 1993
("OBRA"), which, among other things, provides that compensation paid to
certain covered executive officers in excess of $1,000,000 annually does
not qualify for deduction by the Company unless such compensation is
"performance-based." Except for the Company's Chairman and Chief Executive
Officer, for which the Company is proposing to adopt a performance-based
cash compensation plan effective for fiscal 1995 (see "Proposal to Approve
the Adoption of the Senior Executive Performance Bonus Plan"), OBRA is not
expected to have an impact or result in the loss of a deduction with
respect to cash compensation paid to the Company's executives. With
respect to stock-based compensation, the Company is proposing an amendment
to its Amended and Restated Nonstatutory Stock Option Plan to take
advantage of an exemption from OBRA for stock option grants. See "Proposal
to Approve Amendments to the Amended and Restated Nonstatutory Stock Option
Plan."
Performance Measures
- --------------------
In evaluating annual executive compensation, the Committee examines earnings
per share, return on equity, sales growth and total return to shareholders.
These factors are compared with designated Company performance goals, prior
years' performance and performance of other companies in the industry.
Although the Company has a diversified food products line, approximately
75% of the Company's revenues in fiscal 1994 was derived from the sale of
poultry and poultry products. Accordingly, the Company believes that its
performance should be compared to that of other companies that are primarily
poultry or poultry-product oriented to evaluate management performance.
Therefore, the Company compares its performance against a peer industry
group currently consisting of Hudson Foods, Inc., WLR Foods, Inc., Pilgrim's
Pride Corporation, Sanderson Farms, Inc., Golden Poultry Company, Inc. and
Cagle's, Inc. Although there are other producers of poultry and poultry
products, the Committee believes that the percentage of poultry sales to
total sales of the foregoing group more closely represents that of the Company.
14
<PAGE>
Fiscal 1994 Compensation
- ------------------------
For fiscal 1994, the Company's executive compensation program consisted of
(i) base salary, adjusted from the prior year, (ii) a bonus pool based upon
the performance measurements described above, (iii) matching contributions
to incentive and deferred compensation plans, (iv) stock option grants
under the Company's Nonstatutory Stock Option Plan, (v) restricted stock
grants under the Company's Restricted Stock Bonus Plan, and (vi)
contributions under the Company's broad-based Stock Purchase Plan which are
fixed as a percentage of employee participant contributions.
Base Salary
- -----------
Executives' base salaries are reviewed annually to determine if such
salaries fall within the range of those persons holding comparably
responsible positions at other companies. In reviewing base salaries,
national surveys prepared by third-party consultants are utilized. The
surveys are not limited to the Company's peer industry group but rather are
comprised of regional and national companies of similar size and
complexity. Individual salaries are also based upon an evaluation of other
factors, such as individual past performance, potential with the Company
and level and scope of responsibility. Based upon the recommendation of
William M. Mercer, Incorporated, an independent third party consultant, the
Committee approved an average increase in executives' base salaries during
fiscal 1994 of approximately 22.3% over fiscal 1993. The Compensation
Committee believes that the base salaries of the Company's executive
officers as a whole approximate the median level derived from comparative
survey data.
Cash Bonuses
- ------------
Cash bonuses are awarded to executives from a bonus pool determined
annually by the Compensation Committee upon the recommendation of
management. The amount of the bonus pool is based upon a subjective
determination after considering a number of factors including attainment of
performance goals, prior year's performance, performance of the peer
industry group, general economic conditions, and the relative mix between
cash and long-term compensation. Individual bonuses are subjectively
determined from the bonus pool based upon individual performance and
responsibility. The Company's objective is to obtain financial performance
that achieves several goals over time -- including a return on equity
ranging above 15% and sales and earnings-per-share growth of 10% or more.
Additionally, the Company examines total return to shareholders in relation
to total return provided in prior years and industry performance.
A number of events occurred in fiscal 1994 that affected achievement of the
Company's performance goals. Improved operating performance in the
Company's core poultry operations were offset by (i) a one-time special
charge attributable to a $205 million after-tax write-off of goodwill and
impaired asset values of the Company's Seafood Division, (ii) increased
grain costs and (iii) a lack of contribution from the Company's newly
integrated pork operations. Fiscal 1994 earnings, exclusive of special
charges, increased by 12.5% over 1993, with a total increase over five
years of 101.7%, or a compounded annual growth rate of 15.1%. Further,
sales increased 8.6% during 1994 with a total increase over five years of
approximately 101% or 15% compounded annually. Return on average quarterly
15
<PAGE>
shareholders' equity for 1994 was approximately 14.1% compared to 14.7% in
1993. Total return to shareholders (total stock price plus reinvested
dividends) for 1994 was 12.5%, compared to (4.3)% in 1993, with a total
return over the past five years of 89.2%.
Absent the special charge, and despite the challenges posed by the other
factors described above, the Company's executives performed exceptionally
well, thereby allowing the Company to achieve positive financial
performance contributed to the enhancement of shareholder value, as
reflected in the improvement in fiscal 1994's total return to shareholders.
As a result, the Committee approved increased bonuses for fiscal 1994 as
compared to fiscal 1993. However, as a whole bonuses remained comparable
to, or below, fiscal 1992 and fiscal 1991 levels.
Stock Based Compensation
- ------------------------
The Committee approves long-term compensation from time to time in the form
of stock-based compensation with a view towards more closely aligning the
interests of executives and other managers with the interests of
shareholders. The Committee believes that stock options are an effective
incentive for executives and managers to create value for shareholders
since the value of an option bears a direct relationship to appreciation in
the Company's stock price. The determination of whether to grant stock
options, whether on an aggregate or individual basis, is in the discretion
of the Compensation Committee. In making such determination, the Committee
reviews the Company's performance as determined by the price of its stock,
the relation of long-term compensation to cash compensation and the
perceived need of providing additional incentives to executives and
managers to increase shareholder value, the number and frequency of option
grants in prior years and individual performance and potential contribution
to the Company. Based upon these factors, the Committee, during fiscal
1994, granted options to purchase a total of 817,250 shares of Class A
Common Stock to executive officers and managers at an exercise price of
$21.50 per share, which equaled the fair market value of the stock on the
date of grant. (Such options were not Incentive Stock Options under the
Internal Revenue code which means that the officers will have to pay taxes
upon the exercise of the options and the Company will receive a
corresponding tax deduction.) In light of previous grants and existing
compensation levels, the Committee did not deem it appropriate to grant
options for the named executive officers described in the Summary
Compensation Table.
During fiscal 1994, the Committee also awarded an aggregate of 130,000
restricted shares of Class A Common Stock to certain executives under the
Company's Restricted Stock Bonus Plan. The restricted shares vest in
varying intervals ranging from ten to twenty-six years, following normal
retirement by the participant. The restricted shares also contain vesting
provisions following the (i) death or termination without cause of a
participant or (ii) occurrence of a change of control of the Company.
Because of the extended vesting provisions contained in the restricted
share grants, the Committee believes that such grants provide a mechanism
to promote identity of interests between the Company's executives and its
shareholders and assist in the long-term retention of executives.
Chairman and CEO Compensation
- -----------------------------
The general approach used in setting the compensation for Don Tyson, the
16
<PAGE>
Company's Chairman and Leland Tollett, Vice Chairman, Chief Executive
Officer and President, is to provide compensation which is competitive with
that of other companies of similar size, while encouraging and rewarding
corporate performance in line with the interests of shareholders. While
Mr. Tyson's base salary is set by contract, the Committee believes that
both Messrs. Tyson's and Tollett's base salaries are below the median level
of compensation for similar sized companies.
Cash bonuses for Messrs. Tyson and Tollett during fiscal 1994 were
subjectively determined after examining the same criteria described above
in establishing bonuses for all executives. Based upon the factors
described above for all executives, Messrs. Tyson's and Tollett's bonuses
increased over fiscal 1993. The increase, however, was also attributable
to the fact that in fiscal 1993 Messrs. Tyson and Tollett voluntarily
elected to take significant bonus reductions. As a result, Messrs. Tyson's
and Tollett's bonuses (while above 1993 levels) are comparable to pre-1993
levels. Consistent with the Committee's determination not to grant stock
options to the Company's most senior executives, no stock options were made
to Messrs. Tyson and Tollett during fiscal 1994; however, both received
long-term compensation in the form of matching contributions under the
Company's deferred compensation and broad-based stock purchase plans.
Summary
- -------
The Committee believes that linking executive compensation to corporate
performance results in a better alignment of compensation with corporate
goals and shareholder interest. As performance goals are met or exceeded,
resulting in increased value to shareholders, executives are rewarded
commensurately. The Committee believes that compensation levels during
fiscal 1994 adequately reflect the Company's compensation goals and
policies.
Shelby Massey
Fred Vorsanger
Neely Cassady
17
<PAGE>
COMPANY PERFORMANCE
-------------------
The following graph shows a five year comparison of cumulative total
returns for the Company, the S&P 500 composite index and an index of peer
companies selected by the Company.
</TABLE>
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(Tyson Foods, S&P 500, Peer Group)
===============================================
Base Return Return Return Return Return
Sept. Sept. Sept. Sept. Sept. Sept.
1989 1990 1991 1992 1993 1994
====== ====== ====== ====== ====== ======
<S> <C> <C> <C> <C> <C> <C>
Tyson Foods 100 101.61 152.65 175.53 167.97 189.18
S&P 500 100 90.76 119.04 132.20 149.39 154.89
Peer Group
Weighted 100 66.16 72.55 79.05 101.91 139.13
Average
===================================
Source S&P Compustat Services, Inc.
</TABLE>
The total cumulative return on investment (change in the year end stock
price plus reinvested dividends) for each of the periods for the Company,
the peer group and the S&P 500 Composite is based on the stock price or
composite index at the end of fiscal 1989.
The above graph compares the performance of the Company with that of the
S&P 500 Composite, and a group of peer companies with the investment
weighted on market capitalization. Companies in the peer group are as
follows: Hudson Foods, Inc., WLR Foods, Inc., Pilgrim's Pride Corp.,
Sanderson Farms, Inc., Golden Poultry Company, Inc. and Cagle's, Inc.
These companies were approved by the Compensation Committee.
CERTAIN TRANSACTIONS
====================
The Company has historically engaged in loans, lease agreements and other
transactions with various of its officers, directors and their affiliates.
The following summarizes such transactions in excess of $60,000 to which
the Company was a party during fiscal 1994. The Company anticipates that it
will continue to engage in similar transactions with such persons in the
future.
Loans
- -----
During fiscal 1994, other than for ordinary travel and expense payments,
the Company has made no loans or advances to any of its officers, directors
or affiliates.
18
<PAGE>
Other Transactions
- ------------------
The following list is a summary of transactions between the Company and its
executive officers, directors, nominees, principal shareholders and other
related parties. Most of the farm leases are for specialized swine
farrowing and rearing facilities. Because of the specialized nature of the
Company's business, certain investors, some of whom are directors and
officers, have agreed to build swine or poultry facilities designed to meet
the Company's particular requirements. These facilities are generally
leased for between three and ten year terms with renewal options in favor
of the Company. The Company anticipates that it will continue such leases
under terms of the respective renewal options.
1. During fiscal 1994, the Company leased certain farms from the following
with aggregate lease payments as follows: (i) Don Tyson, $759,000; (ii) a
partnership, of which John H. Tyson and the Estate of Randal Tyson are
partners, $336,000; (iii) a partnership in which Joe Fred Starr and the
children of Don Tyson, including John H. Tyson, are partners, $1,313,080;
(iv) the Tyson Children Partnership of which John H. Tyson is a partner
$678,000; (v) Estate of Randal Tyson, $140,000; (vi) Estates of John and
Helen Tyson, of which Don Tyson is executor, $27,960; (vii) Leland Tollett,
$254,593; (viii) certain entities controlled by Joe Fred Starr, $105,500;
(ix) Gerald Johnston, $467,105; (x) a partnership in which Gerald Johnston
and Donald Wray are among the partners, $98,880; and (xi) entities of which
Wayne Britt, Senior Vice President, International Division, is a principal,
$653,548.
2. The Company has an aircraft operation agreement with the Estates of John
and Helen Tyson, on a month-to-month basis with aggregate obligations of
$230,592 for fiscal 1994. Additionally, the Company has a lease arrangement
with Don Tyson for the use of a boat with aggregate payments of $60,000.
3. The Company is leasing various properties including four hatcheries, a
cold storage distribution facility and the Company's administrative offices
from the Tyson Foods, Inc. Employee Profit Sharing Trust on a month-to-
month basis with aggregate lease payments of $3,621,727 during fiscal 1994.
4. A subsidiary of the Company, Cobb-Vantress, Inc., has a contract for a
breeder hen Research and Development farm with Leland Tollett with
aggregate payments of $538,557 during fiscal 1994.
5. Certain persons, including some officers and directors, are engaged in
poultry and swine growout operations whereby these persons purchase from
the Company baby chicks, feeder pigs, feed, veterinary and technical
services, supplies and other related items necessary to grow these
livestock to market age, at which time they are sold either to the Company
or to unrelated parties. For fiscal 1994, the purchases from the Company
of the above-enumerated items, which were at fair market value, by such
persons were: Don Tyson, $5,904,863; Joe F. Starr, $1,737,677; Barbara
Tyson, $1,274,695; John H. Tyson, $1,274,909; and a partnership with which
Wayne Britt was affiliated, $1,245,815.
6. The Company has a contract for poultry growout services with an entity
in which Donald Wray and Gerald Johnston are partners with aggregate
payments of $134,750 during fiscal 1994.
7. The Company has entered into an agreement with entities of which Don
Tyson is a principal, with respect to the operation of a waste water
treatment plant which is located adjacent to and services the Company's
chicken processing facility in Nashville, Arkansas, with aggregate payments
by the Company of $2,348,115 for fiscal 1994 pursuant to such agreement.
Additionally, the Company has entered into an agreement with the Tyson
Limited Partnership and another entity in which Don Tyson is a principal,
19
<PAGE>
with respect to the operation of a wastewater treatment plant which is
located adjacent to and services a processing facility in Springdale,
Arkansas, with aggregate payments by the Company of $1,796,654 for fiscal
1994 pursuant to such agreement.
COMPLIANCE WITH SECTION 16(a) of the SECURITIES EXCHANGE ACT of 1934
=====================================================================
The Company's executive officers and directors are required to file under
the Securities Exchange Act of 1934 reports of ownership and changes of
ownership with the Securities and Exchange Commission.
Based solely on information provided to the Company by individual directors
and executive officers, the Company believes that during the preceding year
all filing requirements applicable to executive officers and directors have
been complied with.
AUDITORS TO BE PRESENT
======================
A representative of Ernst & Young LLP, the Company's auditors for fiscal
1994 and the current year, is expected to be in attendance at the Annual
Meeting and will be afforded the opportunity to make a statement. The
representative will also be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
=====================
Proposals of shareholders intended to be presented at the 1996 Annual
Meeting of Shareholders must be received by the Company on or before
September 30, 1995, in order to be eligible for inclusion in the Company's
proxy statement and form of proxy. To be so included, a proposal must also
comply with all applicable provisions of Rule 14a-8 under the Securities
Exchange Act of 1934.
EXPENSES OF SOLICITATION
========================
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made by officers, directors and employees of the Company personally
or by mail, telephone, telegraph or other similar means of communication.
Solicitation by such persons will be made on a part-time basis and no
special compensation other than reimbursement of actual expenses incurred
in connection with such solicitation will be paid.
ADDITIONAL INFORMATION AVAILABLE
================================
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, THE COMPANY WILL FURNISH A COPY OF
THE COMPANY'S 1994 ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO. THE WRITTEN REQUEST SHOULD BE SENT TO THE
SECRETARY, AT THE COMPANY'S EXECUTIVE OFFICE. THE WRITTEN REQUEST MUST
STATE THAT AS OF NOVEMBER 21, 1994, THE PERSON MAKING THE REQUEST WAS A
BENEFICIAL OWNER OF CAPITAL STOCK OF THE COMPANY.
20
<PAGE>
OTHER MATTERS
=============
So far as is now known, there is no business other than that described
above to be presented to the shareholders for action at the Annual Meeting.
Should other business come before the Annual Meeting, votes may be cast
pursuant to proxies in respect to any such business in the best judgment of
the persons acting under the proxies.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO ADDITIONAL POSTAGE, IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
MARY RUSH
Secretary
December 6, 1994
21
