<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
SCHEDULE 14D-1
(AMENDMENT NO. 3)
AND
SCHEDULE 13D
(AMENDMENT NO. 4)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
____________________
WLR FOODS, INC.
(Name of Subject Company)
____________________
WLR ACQUISITION CORP.
(Bidder)
____________________
Common Stock, no par value
(Title of Class of Securities)
____________________
929286 10 2
(CUSIP Number of Class of Securities)
____________________
James B. Blair
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
Telephone Number (501) 290-4000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
Copies to:
Leslie A. Grandis, Esq. Lawrence Lederman, Esq.
McGuire, Woods, Battle & Boothe Michael W. Goroff, Esq.
One James Center Milbank, Tweed, Hadley & McCloy
901 East Cary Street 1 Chase Manhattan Plaza
Richmond, Virginia 23219 New York, New York 10005
Telephone: (804) 775-4322 Telephone: (212) 530-5000
===============================================================================
<PAGE>
CUSIP No. 929286 10 2 14D-1
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
TYSON FOODS, INC.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS) (A) / /
(B) /x/
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC, BK
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
600,063 COMMON SHARES
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) / /
- -------------------------------------------------------------------------------
9 % OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
5.47%
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 929286 10 2 14D-1
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
WLR ACQUISITION CORP.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS) (A) / /
(B) /X/
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
BK
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
600,000 COMMON SHARES
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) / /
- -------------------------------------------------------------------------------
9 % OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
5.47%
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 929286 10 2 14D-1
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
TYSON LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS) (A) / /
(B) /X/
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
NOT APPLICABLE
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
600,063 COMMON SHARES
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) / /
- -------------------------------------------------------------------------------
9 % OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
5.47%
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 929286 10 2 14D-1
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MR. DON TYSON
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS) (A) / /
(B) /X/
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
NOT APPLICABLE
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
600,063 COMMON SHARES
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) / /
- -------------------------------------------------------------------------------
9 % OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
5.47%
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
- -------------------------------------------------------------------------------
<PAGE>
This Statement constitutes Amendment No. 3 to the Statement on
Schedule 14D-1, dated March 9, 1994, as amended, filed by WLR Acquisition
Corp., a Delaware corporation (the "Purchaser"), and a wholly-owned subsidiary
of Tyson Foods, Inc., a Delaware corporation ("Tyson"), and Tyson, relating to
the offer by the Purchaser to purchase all outstanding shares of Common Stock,
no par value (the "Shares"), of WLR Foods, Inc., a Virginia corporation (the
"Company"), at a price of $30.00 per share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 9, 1994 (the "Offer to Purchase") and in the related Letter of
Transmittal.
This Statement also constitutes Amendment No. 4 to the Statement on
Schedule 13D, dated March 4, 1994, as amended, filed by the Purchaser, Tyson,
Tyson Limited Partnership and Mr. Don Tyson, relating to their beneficial
ownership of Shares.
1. Item 10(e) is hereby amended to add the following:
On March 21, 1994, Tyson filed an amended Answer and Counterclaims
in the Virginia Action, a copy of which is filed as Exhibit 99.16 hereto and
incorporated herein by reference.
2. Item 11 is hereby amended to add the following:
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) 99.14 -- Letter to Shareholders of WLR Foods, Inc. from Tyson
Foods, Inc., dated March 24, 1994.
99.15 -- Advertisement in THE HARRISONBURG DAILY NEWS RECORD
on March 24, 1994.
(g) 99.16 -- Amended Answer and Counterclaims of Tyson Foods, Inc.,
filed March 21, 1994.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of their knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
WLR ACQUISITION CORP.
By /s/ James B. Blair
--------------------------------
Name: James B. Blair
Title: President
Dated: March 25, 1994
TYSON FOODS, INC.
By /s/ Gerald Johnston
--------------------------------
Name: Gerald Johnston
Title: Executive Vice President,
Finance
Dated: March 25, 1994
7
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
99.14 Letter to Shareholders of WLR Foods, Inc. from Tyson Foods,
Inc., dated March 24, 1994
99.15 Advertisement in THE HARRISONBURG DAILY NEWS RECORD on
March 24, 1994
99.16 Amended Answer and Counterclaims of Tyson Foods, Inc.,
filed March 21, 1994
8
<PAGE>
[TYSON LETTERHEAD]
March 24, 1994
Dear WLR Shareholder:
As you may know, for the last two months we have been attempting to enter
into friendly merger negotiations with James L. Keeler, WLR Foods' President and
Chief Executive Officer, and his Board of Directors. Our tender offer now brings
our proposal directly to you -- the true owners of WLR Foods.
At this point the WLR Board would just as soon see us go away and forget
that we ever made a merger proposal at all. This transaction is too important
for us to just go away. We plan to continue our efforts to acquire WLR for as
long as it takes because we are convinced of the benefits for all of a
combination of WLR and Tyson.
WE WANT TO HEAR YOUR VIEWS
Naturally, Tyson's offer to invest approximately $350 million to purchase
WLR may raise a number of legitimate questions in the minds of WLR shareholders,
growers, employees and others. We recognize that, apart from offering to pay you
a fair price for your shares, we must address any concerns that affect your
decision in order to win your support.
Some of you have expressed concerns about the taxes you might have to pay. A
deal that would provide a tax-free alternative to WLR shareholders is clearly
possible. We've made this option clear to Mr. Keeler and the WLR Board from the
start. A tax-free alternative is just one of the benefits shareholders could
realize if WLR management would sit down and negotiate with Tyson.
<PAGE>
WE WILL LISTEN TO YOUR CONCERNS
Some local growers have raised the issue of our position on double-decker
houses. We stand by our earlier promise not to terminate or penalize growers
because they have double-decker houses. As a matter of fact we have a number of
growers who are using them in the Valley.
Tyson Foods came to operate in the Shenandoah Valley region for the first
time as a result of its acquisition of Holly Farms in 1989. Holly acquired its
operations in the Valley in 1975 from Long Foods. Tyson is proud of the
relationships we have built with our 550 local employees, our 130 growers and
their families in the Shenandoah Valley.
Tyson has always recognized that our success and the quality of our products
depends on investing for the future. This means investing in our people, in our
plants and equipment and in building long term partnerships with our growers and
the communities in which we do business.
TYSON IS MAKING A LONG TERM COMMITMENT
TO THE SHENANDOAH VALLEY
As Tyson's presence in the Shenandoah Valley increases, so will our
investment in it -- not only in plant and equipment, but also in the quality of
life of the people in the Valley. You have my personal assurance that we will be
committed in every way to the communities and citizens of the Shenandoah Valley.
We hope to have the opportunity to meet personally with many WLR
shareholders, growers and other members of the local communities over the next
few weeks. At the same time we also will be attempting to reach many of you by
telephone to hear directly your views and to answer your questions.
Let me again invite you to call me personally or call our company's
President, Leland Tollett, at (800) 643-3410.
Thank you for your consideration. I look forward to talking to or meeting
with you soon.
Sincerely,
Don Tyson
CHAIRMAN
<PAGE>
As you know, Tyson Foods has not been
given an opportunity to talk to the Board
of Directors of WLR. Over the past few
weeks, however, we have heard from many
WLR growers and shareholders. We would
like to hear from many more. In the coming
weeks we're going to be in your area
making a concerted effort to talk to more
of you. We understand that's what it takes
for Tyson Foods to be successful in the
Shenandoah Valley. And we have a history
of being successful.
One of the major concerns of the
people we've talked to is grower pay. But
the facts show that Tyson's track record
on grower pay is very good. To the best of
our knowledge we currently pay our broiler
growers as much as or more than anyone
else in the Valley.
[Picture of Don Tyson standing Another concern is double-decker
beside a photograph of his father houses. We stand by our earlier promise
founder John Tyson] not to terminate or penalize growers
because they have double-decker houses.
As a matter of fact, we have current
"If you're willing to talk, growers who are using them.
we're willing to listen."
Stability and growth seem to be
concerns, too. But history supports our
Don Tyson company here as well. As I've stated many
Chairman times, we're in the business of expanding
Tyson Foods, Inc. operations, not downsizing them. Look at
the quality and variety of the products we
currently have in the marketplace. Our
expertise in developing new markets means
growth for us and our suppliers, and
growth means financial stability.
There also seems to be some concern
about Tyson's commitment to the
communities and citizens of the Shenandoah
Valley. As Tyson's presence in the Valley
increases, so will our investment in it.
Not just in jobs and plants, but in the
quality of life of its people. We are
proud of our record as good corporate
citizens in the communities where we do
business. We are fully committed to
continue this role in your communities.
I give you my word on that.
Please contact us. We want to come to
the Valley and talk to you. We want to
discuss our ideas and your ideas for a
Tyson-WLR combination. We also want to
discuss a tax-free exchange of Tyson stock
and WLR stock and many more issues. You
are the people who really own WLR. You
are the people whose questions need be
answered. And we are the only ones who
can answer the questions you have. If
you're willing to talk we're willing to
listen.
[Tyson Logo]
<PAGE>
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
Harrisonburg Division
______________________________
)
WLR FOODS, INC. )
)
Plaintiff, )
)
v. )
)
TYSON FOODS, INC., )
)
Defendant. )
)
and )
)
TYSON FOODS, INC. and )
WLR ACQUISITION CORP., ) Civil Action No. 94-0012(H)
)
Counterclaim- )
Plaintiffs )
)
v. )
)
WLR FOODS, INC., )
)
Counterclaim- )
Defendant, )
)
and )
)
GEORGE E. BRYAN, )
CHARLES L. CAMPBELL, )
STEPHEN W. CUSTER, )
CALVIN G. GERMROTH, )
WILLIAM H. GROSECLOSE, )
J. CRAIG HOTT, )
JAMES L. KEELER, )
HERMAN D. MASON, )
CHARLES W. WAMPLER, JR., )
WILLIAM D. WAMPLER, )
)
Additional Counter- )
Claim Defendants. )
______________________________)
<PAGE>
AMENDED ANSWER AND COUNTERCLAIMS
ANSWER
Defendant Tyson Foods, Inc. ("Tyson Foods"), by its
undersigned counsel, answers WLR Foods, Inc.'s ("WLR") Amended
Complaint as follows:
1. Admits that the Amended Complaint purports to seek a
declaratory judgment regarding the "Rights Plan" as that term is
defined in the Amended Complaint. The remaining allegations are
legal conclusions which do not require a response. To the extent
a response is required, Tyson Foods denies them.
2. Admits that the Amended Complaint purports to seek a
declaration that Article 14, Va. Code Sections 13.1-725 ET SEQ. and
Article 14.1, Va. Code Sections 13.1-728.1 ET SEQ. of Virginia's Stock
Corporation Act are constitutional under the Virginia and United
States Constitutions. The remaining allegations are legal
conclusions which do not require a response. To the extent a
response is required, Tyson Foods denies them.
3. Denies, except to the extent the allegations constitute
legal conclusions which require no response.
4. Admits.
5. Admits.
6. Admits that Tyson Foods believes that WLR's Directors
breached their fiduciary duties by adopting the Rights Plan and
continue to breach their fiduciary duties by not redeeming the
Rights issued thereunder. Tyson Foods denies the remaining
allegations, except to the extent that the letter dated January 24,
1994 is quoted accurately.
2
<PAGE>
7. Admits that Tyson Foods believes that Articles 14 and
14.1 of Virginia's Stock Corporation Act are invalid on their face
and as applied. Tyson Foods denies the remaining allegations,
except to the extent the letter dated January 24, 1994 is quoted
accurately.
8. Admits.
9. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
10. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
11. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
12. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
13. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
14. Denies, except to the extent that the letter dated
January 24, 1994 is quoted accurately.
15. Admits that Tyson Foods is aware that the Board of
Directors of WLR adopted a "Shareholders Rights Plan." Tyson Foods
is without sufficient information to admit or deny the remaining
allegations and therefore denies them.
16. Admits that Tyson Foods is aware that the WLR Board of
Directors adopted a "Shareholders Rights Plan." Tyson Foods refers
to the full text of the "Shareholders Rights Plan" for its
content.
3
<PAGE>
17. Admits that Tyson Foods is aware that the WLR Board of
Directors adopted a "Shareholders Rights Plan." Tyson Foods
refers to the full text of the "Shareholders Rights Plan" for its
content.
18. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
19. Tyson Foods is without knowledge or information
sufficient to form a belief as to the truth of the allegations
relating to WLR's belief. Tyson Foods denies the remaining
allegations except to the extent that the allegations constitute
legal conclusions to which no response is required.
20. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
21. Denies, except to the extent that the allegations
constitute legal conclusions to which no response is required.
22. The remaining allegations are a demand for relief to
which no response is required. To the extent a response is
required; Tyson Foods denies them.
23. Tyson Foods denies every allegation not specifically
admitted.
COUNTERCLAIMS
Counterclaim plaintiffs Tyson Foods and WLR Acquisition Corp.
("Tyson Acquisition")(collectively "Tyson"), by their undersigned
counsel, state as their counterclaims:
4
<PAGE>
THE PARTIES
1. Tyson Foods is a Delaware corporation with its principal
place of business in Arkansas. Tyson Foods has operations
throughout the United States, including facilities in the
Commonwealth of Virginia. At all relevant times, Tyson Foods owned
shares of WLR.
2. Tyson Acquisition is a direct, wholly-owned subsidiary of
Tyson Foods. It is a Delaware corporation with its principal place
of business in Arkansas. Tyson Acquisition has not engaged in any
business since its incorporation other than incident to its
organization and in connection with an offer to purchase for cash
all outstanding shares of common stock of WLR. On March 1, 1994,
Tyson Foods transferred to Tyson Acquisition, as a contribution to
its capital, 600,000 shares of WLR theretofore purchased by Tyson
Foods.
3. WLR is a Virginia corporation with its principal place of
business in Rockingham County, Virginia. Shares of WLR's common
stock are publicly traded on the NASDAQ National Market System.
4. Counterclaim defendants George E. Bryan, Charles L.
Campbell, Stephen W. Custer, Calvin G. Germroth, William H.
Groseclose, J. Craig Hott, James L. Keeler, Herman D. Mason,
Charles W. Wampler, Jr., and William D. Wampler "("Directors") are
members of the WLR Board of Directors. Counterclaim defendants are
citizens of states other than Delaware and Arkansas.
5
<PAGE>
JURISDICTION AND VENUE
5. This Court has subject matter jurisdiction over these
counterclaims pursuant to:
(a) 28 U.S.C. Section 1331 because the matter in controversy
arises under the United States Constitution and the laws of the
United States;
(b) 28 U.S.C. Section 1332 because there is complete diversity
of citizenship between counterclaim plaintiffs and the counterclaim
defendants and the amount in controversy, exclusive of interest and
costs, exceeds $50,000;
(c) 28 U.S.C. Section 1337(a) because the action arises under
an act of Congress regulating commerce;
(e) 28 U.S.C. Section 1367 under the principles of
supplemental jurisdiction.
NATURE OF THE COUNTERCLAIMS
6. The counterclaims asserted herein concern actions taken
by counterclaim defendants to prevent a fair and timely referendum
by WLR's disinterested shareholders on Tyson's cash tender offer
("Tyson Offer") under the Virginia Control Share Acquisitions Act
(Article 14.1 of the Virginia Stock Corporation Act)("Control Share
Act") and a meaningful opportunity for WLR's shareholders to tender
their shares pursuant to Tyson's all cash tender offer.
7. In its simplest form, the Control Share Act strips the
voting rights of shares acquired by an offeror, such as Tyson, once
a certain number of shares are acquired, unless prior to the
6
<PAGE>
acquisition a majority of the corporation's disinterested
shareholders pass a resolution granting voting rights to those
shares.
8. In direct response to Tyson Foods' merger proposal, and
with full expectation that WLR's rejection of the proposal would be
followed by a tender offer, counterclaim defendants engaged in a
flurry of activity. They erected barriers to prevent the success
of a Tyson Foods' tender offer and to deprive WLR's disinterested
shareholders of their corporate franchise. Counterclaim defendants
granted lucrative "golden parachute" contracts to senior
management, rewarding them with significant additional compensation
if a change in control of WLR occurs. In addition, WLR adopted new
severance arrangements for all salaried and hourly clerical
employees. Counterclaim defendants also adopted a discriminatory
shareholder rights plan designed to make it prohibitively expensive
for Tyson Foods to acquire 15% or more of WLR's outstanding common
stock. Finally, and most strikingly, they adopted a series of by-
laws and purported to make management changes that counterclaim
defendants publicly acknowledge was directed at the outcome of a
referendum by disinterested shareholders under the Control Share
Act.
9. Tyson seeks a declaratory judgment and a preliminary and
permanent injunction (a) enjoining the actions taken by
counterclaim defendants that interfere with conduct of a prompt,
fair and impartial referendum under the Control Share Act and
Tyson's right to a meaningful opportunity for its tender offer and
7
<PAGE>
(b) declaring the Control Share Act unconstitutional under the
Supremacy and Commerce Clauses of the United States Constitution.
REGULATORY SCHEME GOVERNING TYSON OFFER
10. The Williams Act, along with regulations of the
Securities and Exchange Commission ("SEC"), governs the Tyson
Offer. The purpose of the Williams Act is to protect shareholders
through a policy of neutrality between management and offeror so
that shareholders are free to decide for themselves whether to
accept or reject a tender offer. In passing the Williams Act,
Congress deliberately avoided tipping the balance in a tender offer
contest in favor of management or the offeror.
11. The Williams Act ensures investor autonomy, and
neutrality between management and offeror, by requiring full
disclosure to shareholders and establishing a timetable for tender
offers. Congress recognized that significant delays in the tender
offer process substantially benefit management, disadvantage
offerors, and harm shareholders by providing time for management,
acting in its self-interest, to erect barriers that prevent a
change of corporate control. Delays of even a few days or weeks
may spell the difference between the success or failure of a tender
offer. When a tender offer is unreasonably delayed, the market for
the target corporation's stock often fluctuates dramatically,
uncertainty prevails, and shareholders run a serious risk of
missing out on the opportunity to sell their shares at a premium.
For these reasons, the Williams Act sets time periods for how the
8
<PAGE>
tender offer should proceed. Under federal law, tender offers must
be free to proceed without unreasonable delay.
12. The State of Virginia also regulates tender offers. The
most formidable barrier in Virginia's regulatory scheme is the
Control Share Act, a statute that WLR has taken, reshaped and
exploited as a weapon against Tyson and WLR shareholders. Under
the Act, a shareholder that owns, directly or beneficially, at
least five percent of the target's outstanding voting shares is
entitled to request a special shareholder meeting for determining
whether voting rights will be extended by the disinterested
shareholders. The special meeting must be held between thirty and
fifty days from the date that the special meeting is requested
unless the offeror agrees otherwise. The Control Share Act also
prohibits solicitations of proxies no sooner than thirty days
before the special meeting.
13. Because no offeror will purchase shares that do not carry
voting rights, the special meeting is tantamount to a referendum on
the tender offer. If the offeror loses the vote, the tender offer,
as a practical matter, cannot proceed. A fair and impartial vote
at the special meeting under the Control Share Act is critical to
the viability of tender offers for shares of Virginia corporations.
14. The Control Share Act requires the resolution to pass by
a majority of all outstanding shares (exclusive of "interested
shares", that is, shares owned by the offeror, the target's
officers, and the target's directors who also are employees of the
target), regardless of whether all shareholders vote. The effect
9
<PAGE>
of this is to count all non-votes as votes for management and
against the offeror. Non-votes typically fall in the range of five
to ten percent of all voting shares outstanding.
BACKGROUND TO TYSON OFFER
15. Tyson is engaged primarily in the business of producing
chicken and chicken products for wholesale and retail markets
nationally and internationally. WLR is in a similar line of
business, but its strength lies in the production of turkey and
turkey products for wholesale and retail markets. The markets for
turkey products is separate and distinct from the market for
chicken products. WLR's operations are based in the mid-Atlantic
region encompassing the states of Virginia, West Virginia,
Pennsylvania and Maryland, while Tyson's presence in the region is
comparatively small. A strategic merger of Tyson and WLR makes
good business sense.
16. Beginning in early January 1994, a representative of
Tyson Foods approached counterclaim defendant Keeler about the
possibility of a friendly merger of Tyson Foods with WLR at a price
of $30 per share for each outstanding share of WLR. Following
further discussions between Tyson Foods and WLR about a possible
merger, Keeler informed Tyson Foods on January 24, 1994 that WLR
was not interested in discussing Tyson Foods' proposal further.
17. Following that conversation, Tyson Foods delivered a
letter to WLR's Board of Directors dated January 24, 1994 proposing
a merger of WLR with Tyson Foods (or a subsidiary of Tyson Foods).
Tyson's merger offer proposed to pay WLR shareholders $30 per share
10
<PAGE>
in cash for each of their shares. This offer represented a premium
to WLR shareholders of approximately $110 million or 56% over the
pre-offer market share price for WLR stock. The letter pointed out
Tyson Foods' belief that "there are extremely attractive
opportunities for pursuing the continued growth and development of
our two companies . . . ." The letter also explained that Tyson
Foods was prepared to negotiate a merger agreement in good faith
and suggested possible approaches to the transaction that would
benefit all of WLR's shareholders.
18. The WLR response to the proposal was swift and
inflexible. On January 25, 1994, WLR's Board of Directors issued
a letter to WLR's shareholders. It stated, among other things,
that, "as it must, [WLR's Board of Directors] will meet in the near
future to evaluate Tyson's offer. . . . And, as always, we will
keep you posted on important corporate developments." When the WLR
Board met, the only thing it evaluated was how to stiff-arm the
proposal from Tyson Foods by: (a) erecting barriers to prevent
WLR's disinterested shareholders from approving, or indeed voting
on, a Tyson tender offer; and (b) establishing means to thwart
WLR's shareholders from tendering, and Tyson from accepting, any
WLR shares pursuant to a Tyson tender offer.
THE DIRECTORS' CONFLICTS OF INTEREST
19. As set forth more fully below, the Directors have
inherent conflicts of interest in regard to any corporate
transaction between WLR and Tyson and/or the Tyson Offer and had
such conflicts at all relevant times. The conflicts arise from,
11
<PAGE>
among other things, (a) the overlapping family and business
relations among the Directors; (b) the direct benefits received
from WLR by the Directors; (c) the indirect benefits received from
WLR by their immediate families; and (d) the indirect benefits
received from WLR by business entities related to the Directors.
By reason of such conflicts, the Directors had an inherent
interest, singly and as a group, to perpetuate themselves in office
and therefore to oppose any change in control, even a noncoersive
proposal, such as the Tyson Offer, which contemplates a Control
Share referendum by disinterested shareholders.
20. Among the evidences of the Directors' inherent conflicts
of interest with respect to the Tyson Offer are the following:
(a) Counterclaim defendant Charles W. Wampler, Jr.,
Chairman of the WLR Board, and counterclaim defendant William D.
Wampler are brothers.
(b) Counterclaim defendant Stephen W. Custer is a nephew
of both counterclaim defendants Charles W. Wampler, Jr. and William
D. Wampler.
(c) When Tyson proposed to WLR a merger with Tyson,
counterclaim defendants George E. Bryan and William D. Wampler were
Senior Vice Presidents of WLR and counterclaim defendants Charles
W. Wampler, Jr. and Herman D. Mason were, in their capacities as
Chairman and Vice Chairman of WLR, respectively, officers and
employees of WLR.
(d) During the fiscal year ended July 3, 1993, WLR paid
$34,029 to Custer Associates, a consulting firm owned by
12
<PAGE>
counterclaim defendant Stephen W. Custer (nephew to the Wampler
brothers).
(e) In addition to his compensation as an employee,
entities related to counterclaim defendant William D. Wampler were
paid by WLR in the fiscal year ended July 3, 1993, a total amount
of $391,327.
(f) Counterclaim defendant James L. Keeler is Chief
Executive Officer and President of WLR and receives in those
capacities compensation of almost $600,000 as well as valuable
stock options. Keeler's son received payments for the fiscal year
ended July 3, 1993 from WLR and its subsidiaries of almost
$100,000.
(g) Counterclaim defendant James L. Mason received from
WLR for its fiscal year ended July 3, 1993 compensation of almost
$250,000 as well as valuable stock options.
(h) Counterclaim defendant Charles L. Campbell and his
son received payments for the fiscal year ended July 3, 1993 from
WLR and its subsidiaries totalling more than $150,000.
(i) Counterclaim defendant J. Craig Hott received from
WLR for the benefit of Hott's Farming, Inc., of which he is a vice
president, payments for the fiscal year ended July 3, 1993 from WLR
and its subsidiaries totalling more than $250,000. In addition,
WLR purchased, either directly or through third-party suppliers,
more than $800,000 of fuel oil and propane from Franklin Oil Co,
Inc., of which Hott is a director and minority shareholder.
13
<PAGE>
(j) Counterclaim defendant Calvin G. Germroth, a broiler
producer, received from WLR and its subsidiaries in fiscal year
1993 almost $36,000.
21. The Directors were and are fearful that a merger of
WLR with Tyson and/or the acquisition of voting control of WLR by
Tyson could jeopardize the lucrative Director Benefits that the
Directors receive directly and indirectly from WLR.
COUNTERCLAIM DEFENDANTS' IMPROPER ACTIONS
22. On February 4, 1994, the WLR Board held a meeting in
which they rejected Tyson Foods' proposal. At that February 4
meeting, WLR's Board took a series of actions designed to erect
numerous barriers that would insulate WLR from any acquisition not
approved by the WLR Board. Through its actions, WLR's Board
attempted to impose its will on WLR's shareholders, to exercise by
eliminating any opportunity for WLR's disinterested shareholders to
exercise their shareholder rights, as contemplated by the Williams
Act and the Control Share Act, thereby attempting to deprive them
of the benefits of an acquisition proposal from Tyson or any other
third party not endorsed by the WLR Board.
23. Specifically, at the February 4, 1994 Board meeting, the
Directors:
(a) adopted a Shareholder Rights Agreement ("Poison
Pill");
(b) adopted certain executive severance arrangements
("Golden Parachutes");
14
<PAGE>
(c) adopted certain severance packages for salaried and
hourly employees ("Other Parachutes");
(d) amended the corporate bylaws ("Bylaws") of WLR
relating to the roles that the Chairman and Vice Chairman of WLR
play as officers to enhance management's voting power to block an
expected tender offer by Tyson Foods;
(e) took actions which denied WLR's disinterested
shareholders the opportunity to participate in a vote on a tender
offer by Tyson Foods or another party; and
(f) purported to terminate the employment of a number of
WLR officers, while at the same time promising to expend
substantial sums for the benefit of those officers and their
families in the future, again to enhance management's voting power
to block an expected tender offer by Tyson Foods.
These actions are described in WLR's Form 10-Q for the
quarterly period ending January 1, 1994, which was filed with the
SEC on February 15, 1994 ("Form 10-Q").
A. THE POISON PILL
24. Pursuant to the Poison Pill, the Board of Directors of
WLR declared, among other provisions, that a dividend of one
"Right" per outstanding share of WLR stock be issued to WLR
stockholders.
25. The Poison Pill provides that it is triggered, or "flips-
in," when any person acquires voting control of 15% or more of the
outstanding Common Stock of WLR. Once triggered, the Poison Pill
provides that the Rights owned by the acquiring person are
15
<PAGE>
automatically void, and all other Rights holders automatically may
purchase shares of Common Stock in WLR at half the market price.
The Board of Directors of WLR may redeem the Rights at anytime
before the flip-in trigger occurs for $0.01 per Right.
26. The Poison Pill adopted by the Board of Directors of WLR
makes any acquisition of more than 15% of the shares of WLR
prohibitively expensive to any prospective acquirors. In addition
to imposing a severe financial penalty on a potential acquiror, the
"flip-in" of the Poison Pill would dramatically dilute a potential
acquiror's voting power and equity interest in WLR. As a result,
the adoption of the Poison Pill has the effect of deterring any
takeover offers for WLR except those that are approved by the Board
of Directors of WLR. Through their adoption of the Poison Pill,
the Board of Directors of WLR have entrenched themselves and the
present officers of WLR in their positions, and at the same time
have deprived WLR's shareholders of the opportunity to consider
lucrative offers for their shares, including the Tyson Offer.
27. The Directors, acting in breach of their fiduciary
duties, adopted the Poison Pill with the intent and purpose of
thwarting an expected tender offer by Tyson Foods and with the
intent and purpose of preventing such a tender offer from
succeeding even if Tyson Foods received the favorable vote of a
majority of WLR's disinterested shareholders under the Control
Share Act approving a tender offer by Tyson Foods.
16
<PAGE>
B. THE GOLDEN AND OTHER PARACHUTES
28. The Golden Parachutes adopted by the Board of Directors
of WLR provide for extremely lucrative financial benefits to WLR's
present management, one of whom is presently a member of WLR's
Board of Directors and another of whom is related to one of the
Directors. At the same time, the Golden Parachutes and Other
Parachutes adopted by the Board of Directors make any acquisition
of WLR considerably more expensive, and thereby reduce the
likelihood of any such acquisition, or at the least reduce the
price that WLR's shareholders might receive as a result of any such
acquisition.
29. In its Schedule 14D-9, filed with the SEC on March 14,
1994, WLR for the first time disclosed that the maximum aggregate
lump sum amount that could be payable under the Golden and Other
Parachutes, but exclusive of "gross-up" payments and fringe benefit
costs, is approximately $7.3 million. Even this figure
dramatically understates the true cost of the Parachutes, because
"gross up" payments will result in millions of dollars of
additional costs, all or part of which may not be deductible for
tax purposes by WLR.
30. The Directors adopted the Golden and Other Parachutes
with the intent and purpose of thwarting an expected tender offer
by Tyson Foods and with the intent and purpose of benefitting
themselves without regard to the best interests of WLR or its
shareholders.
17
<PAGE>
C. DISENFRANCHISEMENT OF WLR'S SHAREHOLDERS
31. One of the entrenchment tactics of counterclaim
defendants at the February 4 Board meeting was an amendment of the
WLR Bylaws ("Disenfranchisement Amendment") that provides that the
record date for any special meeting held pursuant to the Control
Share Act will be the day on which an Acquiring Person (as defined
by the statute) requests such a meeting. This Disenfranchisement
Amendment has the effect of eliminating the advance notice that
otherwise would be given (and is required under the SEC proxy
rules) with respect to a record date for a meeting of shareholders.
The Disenfranchisement Amendment further favors management in a
referendum under the Control Share Act because absent advance
notice of the record date a potentially significant number of WLR
shareholders, as a practical matter, may be unable to vote their
shares at the meeting. The inability of such shareholders to vote
is of great significance in that at the special meeting any shares
not voted count as votes in favor of WLR's management.
32. The Disenfranchisement Amendment, in combination with
other provisions of the Control Share Act, make it extremely
difficult for any acquiring person, including Tyson, effectively to
make its case to WLR's shareholders in connection with a Control
Share referendum. Moreover, in light of the Disenfranchisement
Amendment adopted by WLR, the operation of the Control Share Act
would conflict with the operation of federal law regarding the
solicitation of proxies.
18
<PAGE>
33. The Directors adopted the Disenfranchisement Amendment
with the intent and purpose of thwarting an expected tender offer
by Tyson Foods and with the intent and purpose of preventing a fair
and impartial vote by WLR's disinterested shareholders under the
Control Share Act.
D. RIGGING THE VOTE
34. The Control Share Act requires the resolution granting
voting rights to the Acquiring Person to be approved by a majority
of all of the shares entitled to vote other than "interested
shares". Interested shares include shares owned by the acquiring
person (in this case, Tyson). Interested shares also include
shares owned by the target's officers and its directors who also
are employees of the target.
35. As disclosed in WLR's 1993 proxy statement, WLR's
Directors and executive officers, as a group, beneficially own
1,780,881 shares of WLR common stock or 15.9% of such stock. On
information and belief, the Directors beneficially owned about
14.4% of WLR's common stock prior to the February 4 meeting of the
WLR Board.
36. Under the Control Share Act, the shares as to which
counterclaim defendants George E. Bryan, James L. Keeler, Herman D.
Mason, Charles W. Wampler, Jr. and William D. Wampler were entitled
to vote or direct the voting were interested shares within the
meaning of the Control Share Act. Accordingly, such Directors were
not entitled to vote such shares in a Control Share referendum.
19
<PAGE>
37. Unwilling to abide a vote by WLR's disinterested
shareholders on a Tyson tender offer, the Directors elected to
elevate form over substance and to convert approximately 10% of
WLR's common stock owned by four of the counterclaim defendants
(then management insiders) into "disinterested shares." In
particular, the Directors amended the Bylaws purporting to
"clarify" that the roles of the Chairman of the Board and the Vice
Chairman of the Board are officers of the Board, not officers of
WLR. Notwithstanding this supposed "clarification," in truth and
in fact, both the Chairman and the Vice Chairman of the Board,
counterclaim defendants Charles W. Wampler, Jr. and Herman D.
Mason, respectively, always have acted as officers of WLR, as well
as to WLR's Board. Moreover, the positions of Chairman and Vice
Chairman of the WLR Board are officer-positions so the individuals
occupying those positions are officers of WLR, regardless of the
compensation that they receive.
38. Simultaneously, two members of the Board, counterclaim
defendants William D. Wampler and George E. Bryan, purported to
resign as Senior Vice Presidents of WLR, although they continued as
members of the WLR Board. Counterclaim defendants Charles W.
Wampler, Jr., Herman D. Mason, William D. Wampler, and George E.
Bryan, the four of whom control approximately 10% of the shares of
WLR, purported to resign as employees of WLR but remained as
directors.
39. In connection with the alleged termination of employment
of counterclaim defendants C. Wampler, H. Mason, W. Wampler and G.
20
<PAGE>
Bryan, each was provided with individual deferred compensation
agreements that provide "post-retirement" health insurance coverage
for life for these directors and their families. The granting of
such remunerative agreements was a clear breach of the Directors'
fiduciary duties and was a QUID PRO QUO for the votes of these four
Directors against the Tyson Offer in a Control Share referendum.
WLR has not disclosed the value of such deferred compensation
arrangements.
40. The Directors' primary motive for approving the alleged
management changes described above ("Anti-Referendum Changes") was
to circumvent the fundamental purpose of the Control Share Act,
which is to leave solely to the disinterested shareholders the
decision whether "interested" shareholders will have a right to
vote on a transaction. These cynical acts by the Directors are
intended directly to dilute the voting power of the disinterested
shareholders, allowing these four directors the opportunity to vote
their shares, totalling approximately 10% of the outstanding voting
shares of WLR, while at the same time barring Tyson from exercising
its voting rights, all in direct violation of the plain intent of
the Control Share Act. The wrongful effect of the Board's actions
is compounded by the fact that under the Control Share Act, Tyson
will be unable to vote its shares, thereby enhancing the voting
rights of the remaining shareholders. Thus, unless the Board's
actions are rescinded, its own officers who have a plain interest
in the outcome of a Control Share referendum, will have enhanced
21
<PAGE>
voting power and Tyson and WLR's disinterested shareholders will be
deprived of a fair and impartial vote.
41. An additional motive by counterclaim defendants for the
Anti-Referendum Changes was to prevent a timely Control Share
referendum as contemplated by the Williams Act and the Control
Share Act. Counterclaim defendants believed that Tyson likely
would be constrained to challenge in court the Disenfranchisement
Amendment and the Anti-Referendum Changes before it would request
a special shareholder meeting under the Control Share Act thereby
delaying, or preventing entirely, Tyson from proceeding with a
tender offer for shares of WLR.
COUNTERCLAIM DEFENDANTS' CONCEAL THEIR MISCONDUCT
42. Not surprisingly, counterclaim defendants were not
forthcoming about the extent of the Directors' activities on
February 4, 1994, even though WLR had promised to keep its "fellow
shareholders" informed of its actions.
43. On Sunday, February 6, 1994, counterclaim defendant
Charles W. Wampler, Jr., Chairman of WLR, sent a letter to the
Chairman of the Board of Directors of Tyson Foods reporting that
the WLR Board unanimously rejected Tyson Foods' offer of merger.
44. By letter dated February 6, 1994, WLR also announced to
the public that on February 4, 1994 the Directors rejected Tyson
Foods' January 24, 1994 merger proposal.
45. Also on February 6, 1994, the Directors sent a letter to
WLR's shareholders describing the Poison Pill.
22
<PAGE>
46. None of the February 6, 1994 letters nor any other
voluntary communication revealed -- or even hinted at -- the
actions taken by the Board of Directors of WLR in granting the
Golden and Other Parachutes, adopting the Disenfranchisement
Amendment and approving the Anti-Referendum Changes, which are
described above.
47. These actions were only made public through the
compulsory filing, under applicable rules of the SEC, of the Form
10-Q, eleven days after the fact.
COUNTERCLAIM DEFENDANTS' LITIGATION TACTICS
48. Also on Sunday, February 6, 1994, counterclaim defendants
arranged for the office of the Clerk of this Court to be opened so
WLR could file a complaint commencing this action. Counterclaim
defendants knew full well that if WLR permitted a fair and
impartial referendum by WLR's disinterested shareholders under the
Control Share Act, a court might never need to adjudicate the
issues raised in the complaint.
49. If a majority of WLR's disinterested shareholders
approved a resolution permitting Tyson to proceed with its tender
offer, counterclaim defendants would have a fiduciary duty to
dismantle the barriers that they have erected to prevent the Tyson
Offer from proceeding. In such circumstances, it would be
unnecessary for a court to make any determination as to the
constitutionality of the Control Share Act and it might be
23
<PAGE>
unnecessary to reach issues as to the validity of the Virginia
Affiliated Transactions statute and the Poison Pill.
50. In a letter to WLR's shareholders dated February 23,
1994, counterclaim defendant Keeler described counterclaim
defendants' actions in filing this action as legal steps WLR has
taken to "protect its shareholders' interests." Counterclaim
defendant Keeler knew WLR's true intent and purpose in filing this
action was to entrench management, to protect counterclaim
defendants' Director Benefits and prevent a prompt, fair and
impartial referendum by WLR's disinterested shareholders on the
Tyson Offer under the Control Share Act.
TYSON PREPARES FOR A CONTROL SHARE REFERENDUM
AND COMMENCES ITS OFFER
51. Acting in good faith and relying upon its right to have
a prompt referendum under the Control Share Act, after it announced
its efforts to negotiate an acquisition of WLR, Tyson Foods
purchased on the open market sufficient shares of WLR to give Tyson
Foods beneficial ownership of at least 5% of WLR's voting shares.
Under the Control Share Act, Tyson could only request such a
meeting once it had accumulated a 5% stake in WLR.
52. Tyson spent $11 million purchasing WLR shares before it
became aware of counterclaim defendants' actions designed to thwart
the right of WLR's disinterested shareholders to vote on a Tyson
tender offer under the provisions of the Control Share Act. Not
until February 16, 1994, did Tyson first learn of the February 4
24
<PAGE>
actions that counterclaim defendants had taken to deprive Tyson of
the ability to obtain a prompt, fair and impartial vote at a
special meeting under the Control Share Act.
53. Tyson ultimately expended in excess of $18 million in
order to be able to exercise its right under the Control Share Act
to have a timely Control Share referendum. Tyson knew when it
purchased its 5% stake that those shares could not vote in the
referendum. Its sole reason for purchasing the shares was to
ensure that it could require WLR to schedule a prompt special
meeting to hold the Control Share referendum.
54. On March 9, 1994 Tyson Foods (through its wholly-owned
subsidiary Tyson Acquisition) commenced a cash tender offer for all
WLR shares for $30 a share under the Williams Act. Upon completion
of the offer, Tyson will seek to consummate a merger with WLR that
will result in all non-tendering WLR shareholders receiving $30 per
share as well. Tyson's offer expires on April 8, 1994.
COUNTERCLAIM DEFENDANT'S CONTINUING
BREACHES OF DUTY
55. On March 14, 1994, counterclaim defendants filed SEC
Schedule 14D-9 announcing their opposition to the Tyson Offer.
56. The Schedule 14D-9 threatens additional and continuing
violations of the counterclaim defendants' fiduciary and statutory
duties. In particular, the Schedule 14D-9 discloses that
counterclaim defendants are discussing acquisitions and that such
transactions "could include the issuance of voting securities" of
WLR. Such actions, if consummated, would constitute a further and
25
<PAGE>
continuing interference with the right of Tyson and WLR's
shareholders to have a prompt, fair and impartial referendum on the
Tyson Offer under the Control Share Act and the Williams Act. Any
such transaction would be a further breach of the Directors'
fiduciary duties because such extraordinary corporate transactions
would have a material adverse impact on WLR's business, finances
and corporate structure and would be done solely for the purposes
of entrenching the Directors, preserving their Director Benefits
and placing WLR's voting stock in friendly hands.
57. By its terms, the Control Share Act prohibits
solicitation of proxies in connection with a Control Share
referendum sooner than thirty days before the special meeting
unless otherwise agreed. To have a fair solicitation and permit
the disinterested shareholders to be fully informed, a minimum
thirty-day solicitation period prior to the special meeting is
required. By setting the meeting date for thirty days after
receiving a control share acquisition statement but delaying the
giving of notice of the meeting for ten days after receiving the
statement, a target board can thwart the intent of the Control
Share Act that there be a thirty day solicitation period.
58. On March 16, 1994, Tyson, by its counsel, requested that
WLR agree to provide Tyson with no less than thirty days' prior
notice of the date set for a special meeting requested by Tyson
under the Control Share Act. Counterclaim defendants have failed
to respond to this request.
26
<PAGE>
59. Failure to agree to give Tyson thirty days' prior notice
of a special meeting under the Control Share Act, and thereby
assuring a full thirty day period for solicitation of proxies, is
a further and continuing breach by the Directors of their fiduciary
duties and duty of loyalty. It is done for the sole purpose of
depriving Tyson and WLR's disinterested shareholders of their right
to have a fair vote on the Tyson Offer under the Control Share Act.
60. Under Sections 13.1-770 and 13.1-771 of the Virginia
Code, Tyson is entitled to inspect and copy, among other records of
WLR, WLR's accounting records, its shareholders' list, minutes of
all meetings of its shareholders and board of directors. Tyson,
through an authorized representative, has made written demand for
such records. WLR has failed to comply fully within five business
days as required by applicable law.
COUNT I
61. The actions taken by counterclaim defendants on February 4,
1994, including (a) the amendments made to the Bylaws relating
to the roles that the Chairman and Vice Chairman play as officers
of the corporation; (b) the resignations of counterclaim defendants
William D. Wampler and George E. Bryan as Senior Vice Presidents;
and (c) the termination of compensation from WLR to counterclaim
defendants Charles W. Wampler, Jr., Herman D. Mason, William D.
Wampler, and George E. Bryan, were intended to preserve for the
Directors their Director Benefits and to circumvent the clear
purpose of the Control Share Act by allowing "interested shares"
27
<PAGE>
owned by "management" to vote in a manner prohibited by Va. Code
Section 13.1-728.3(B).
62. Notwithstanding the actions taken by counterclaim
defendants, the shares owned or controlled by counterclaim
defendants W. Wampler, C. Wampler, Bryan and Mason are "interested
shares" under the Control Share Act.
63. An actual controversy exists concerning whether the
shares owned or controlled by counterclaim defendants W. Wampler,
C. Wampler, Bryan and Mason are "interested shares" prohibited from
voting on a resolution to extend voting rights to shares acquired
in a control share acquisition as provided by Va. Code
Section 13.1-728.3(A).
64. In the event the Directors' actions herein are not
rescinded, Tyson is entitled to a declaratory judgment, pursuant to
28 U.S.C. Section 2201, that all WLR shares owned directly, indirectly or
beneficially, by counterclaim defendants W. Wampler, C. Wampler,
Bryan and Mason, are "interested shares" under the Control Share
Act and accordingly may not be voted in the referendum provided by
the Act.
COUNT II
65. The Directors have fiduciary duties and a duty of loyalty
to WLR's shareholders and others.
66. Among such duties, the Directors have a duty not to
subvert the shareholder franchise, including any vote by
disinterested shareholders under the Control Share Act.
28
<PAGE>
67. The actions of the Directors set forth above subvert the
right and ability of Tyson, and WLR's disinterested shareholders,
to have a prompt, fair and impartial Control Share referendum, as
contemplated by the Williams Act, the Control Share Act and other
applicable law, and violate the Directors' fiduciary duties. Such
actions are contrary to the interests of WLR's shareholders. They
are intended to entrench WLR's present management in its positions
at WLR by making an acquisition by Tyson practically impossible,
all for the purpose of protecting existing management and depriving
WLR's disinterested shareholders of the opportunity to consider the
Tyson Offer.
68. Specifically, the actions taken by the Directors:
(a) allow intransigent management to set the Record Date
of stock ownership so as to deprive a significant number of
disinterested shareholders of the ability to vote their stock at a
Control Share referendum under the Control Share Act;
(b) discourage shareholders from voting their shares at
a Control Share referendum by permitting a discriminatory poison
pill to be adopted in the face of a noncoercive proposal;
(c) frustrate the full purposes and objectives of
Congress in enacting the Williams Act by giving intransigent
management the ability to defeat a noncoercive proposal without a
prompt, fair and impartial vote by disinterested shareholders;
(d) frustrate the full purposes and objectives of the
Virginia legislature in enacting the Control Share Act by depriving
29
<PAGE>
disinterested shareholders of an opportunity to have a prompt, fair
and impartial vote on the Tyson Offer;
(e) impermissibly tilt the balance between management
and a potential acquiror in the context of a noncoercive proposal;
(f) manipulate WLR's Bylaws and the status of WLR's
officers solely for the purpose of entrenching existing management;
(g) fail to disclose Board action to the shareholders in
a timely and meaningful way; and
(h) establish a series of corporate artifices in an
attempt to deprive WLR's shareholders of the opportunity to
consider the Tyson Offer in a fully-informed manner.
69. These violations have injured and continue to injure
Tyson because they:
(a) deprive Tyson of its right to have a prompt, fair
and impartial vote on its Offer under the Control Share Act; and
(b) frustrate Tyson's right to proceed with its Offer as
contemplated by the Williams Act and other applicable law.
70. If the Court determines that the actions taken by
counterclaim defendants as set forth above were and are authorized
under the Control Share Act, then the Act as applied is
unconstitutional under Count IV.
COUNT III
71. The Directors have fiduciary duties and a duty of loyalty
to WLR's shareholders and others.
30
<PAGE>
72. Among such duties, the Directors have a duty not to
subvert the right of shareholders to tender their shares in
response to a noncoercive tender offer.
73. The actions of the Directors set forth above in adopting
the Poison Pill and then refusing to redeem the Rights issued
thereunder (even though the Directors have elected not to opt out
of the Control Share Act) violate the Directors' fiduciary duties.
Such actions are contrary to the interests of WLR's shareholders.
They are intended to entrench WLR's present management in its
positions at WLR by making an acquisition by Tyson practically
impossible, all for the purpose of protecting existing management.
They deprive WLR's shareholders of the opportunity to tender their
shares pursuant to the Tyson Offer (and deprive Tyson of the
ability to accept the tender), assuming that Tyson receives the
favorable vote of a majority of WLR's disinterested shareholders in
a fair and impartial referendum under the Control Share Act.
74. These violations have injured and continue to injure
Tyson because they frustrate Tyson's right to proceed with its
Offer as contemplated by the Williams Act, the Control Share Act
(assuming a majority of WLR's disinterested shareholders approve
the Tyson Offer in a fair and impartial referendum) and other
applicable law.
COUNT IV
75. The Control Share Act is unconstitutional. It
31
<PAGE>
(a) is preempted by federal proxy law developed under
Section 14 of the Securities Exchange Act of 1934 and thereby
violates the Supremacy Clause of the United States Constitution;
(b) is preempted by the Williams Act and thereby
violates the Supremacy Clause of the United States Constitution;
and,
(c) violates the Commerce Clause of the United States
Constitution.
76. The unconstitutionality of the Control Share Act has
injured and continues to injure Tyson because it:
(a) deprive Tyson of its right to have a prompt, fair
and impartial vote on its Offer under the Control Share Act and
other applicable law; and
(b) frustrate Tyson's right to proceed with its Offer as
contemplated by the Williams Act and other applicable law.
COUNT V
77. The Virginia statutory scheme regulating mergers and
acquisitions, including the Control Share Act, the Virginia
Affiliated Transactions Statute, and Va. Code Section 13.1-646, is
unconstitutional. It gives a Virginia corporation's pre-existing
board of directors a DE FACTO veto power over tender offers and
mergers, and therefore thwarts shareholder democracy and burden
interstate commerce by, among other things:
(a) allowing intransigent management to manipulate the
record date for determining stock ownership to deprive shareholders
32
<PAGE>
of the ability to vote their shares in a fully informed and
meaningful way;
(b) discouraging shareholders from voting their stock by
permitting a discriminatory poison pill to be adopted in the face
of a noncoercive proposal, particularly when combined with the
manipulation of these statutes by the Board as in this case;
(c) frustrating the full purposes and objectives of
Congress in enacting the Williams Act by giving intransigent
management the ability to impede a noncoercive proposal without
consulting shareholders; and
(d) impermissibly tilting the balance between management
and an acquiror in the context of a noncoercive proposal.
78. By denying a meaningful opportunity for success by any
possibly interested merger partner in the face of intransigent
management, the Virginia statutory scheme regulating mergers and
acquisitions, including the Control Share Act, the Virginia
Affiliated Transaction statute, and Va. Code Section 13.1-646, is
unconstitutional. It
(a) is preempted by federal proxy law developed under
Section 14 of the Securities Exchange Act of 1934 and thereby
violates the Supremacy Clause of the United States Constitution;
(b) is preempted by the Williams Act and therefore
violate the Supremacy Clause of the United States Constitution; and
(c) violates the Commerce Clause of the United States
Constitution.
33
<PAGE>
79. The unconstitutionality of the Virginia statutory scheme
regulating mergers and acquisitions injured and continue to injure
Tyson because it:
(a) deprives Tyson of its right to have a prompt, fair
and impartial vote on its Offer under the Control Share Act and
other applicable law; and
(b) frustrate Tyson's right to proceed with its Offer as
contemplated by the Williams Act and other applicable law.
COUNT VI
80. In its Amended Complaint, WLR seeks a declaration that
the Virginia Affiliated Transactions Statute is constitutional.
81. The Virginia Affiliated Transactions Statute is
unconstitutional. Essentially, it gives a Virginia corporation's
pre-existing board of directors DE FACTO veto power over mergers
and therefore thwarts shareholder democracy and burdens interstate
commerce.
82. By denying a meaningful opportunity for success by any
possibly interested merger partner other than one receiving the
pre-existing board's approval, the Virginia Affiliated Transactions
statute is unconstitutional. It
(a) is preempted by the Williams Act and therefore
violates the Supremacy Clause of the United States Constitution;
and
(b) violates the Commerce Clause of the United States
Constitution.
34
<PAGE>
83. The unconstitutionality of the Virginia Affiliated
Transactions Statute has injured and continues to injure Tyson
because it deprives Tyson of a meaningful opportunity to have a
successful tender offer.
COUNT VII
84. The Directors have fiduciary duties and a duty of loyalty
to WLR's shareholders and others.
85. Among such duties, the Directors have a duty not to
subvert the right of shareholders to tender their shares in
response to a noncoercive tender offer.
86. The actions of the Directors set forth above in adopting
the Golden Parachutes and the Other Parachutes even though Virginia
gives to WLR's shareholders under the Control Share Act the right
to decide by the vote of a majority of disinterested shareholders
whether a change of control should be permitted (and even though
the Directors have elected not to opt out of the Control Share Act)
violate the Directors' fiduciary duties. Such actions are contrary
to the interests of WLR's shareholders. They are intended to
entrench WLR's present management in its positions at WLR by making
an acquisition by Tyson unreasonably expensive, all for the purpose
of protecting existing management. They deprive WLR's shareholders
of the opportunity to determine whether and at what cost to WLR and
its shareholders a control share acquisition should occur as
contemplated by the Control Share Act.
35
<PAGE>
87. These violations have injured and continue to injure
Tyson because they increase unreasonably the cost to Tyson of
acquiring control of WLR as contemplated by the Williams Act, the
Control Share Act (assuming a majority of WLR's disinterested
shareholders approve the Tyson Offer in a fair and impartial
referendum) and other applicable law.
COUNT VIII
88. By reason of WLR's failure to produce fully all of the
records requested in writing by Tyson, through its authorized
representative, pursuant to Virginia Code Sections 13.1-770-71 within
five business days, Tyson is entitled to an order summarily
ordering WLR to produce the requested records for inspection and
copying at WLR's expense.
IRREPARABLE INJURY
89. Unless preliminary and permanent injunctive relief is
granted, Tyson will be irreparably harmed because it will be denied
the opportunity to have the Tyson Offer freely and fairly
considered by WLR's disinterested shareholders, and WLR's
disinterested shareholders will be irreparably harmed because they
will be denied the opportunity to consider and, if they so choose,
to accept the Tyson Offer.
90. Unless preliminary and permanent injunctive relief is
granted, Tyson will be irreparably harmed in at least the following
additional respects:
(a) Tyson will be denied a meaningful opportunity to
consummate the Tyson Offer;
36
<PAGE>
(b) WLR's management will hold a decided and unlawful
advantage in opposing the Tyson Offer;
(c) Tyson will be compelled to terminate its efforts to
acquire control of WLR due to the economic and financial
uncertainties posed by the Control Share Act and the counterclaim
defendants' other actions described above;
(d) WLR's shareholders will be discouraged from
tendering their shares to Tyson because of the economic and
financial uncertainty created by the Control Share Act and the
counterclaim defendants' other actions described above; and
(e) Tyson will be deprived of the opportunity to acquire
control of WLR, a unique business.
91. Unless preliminary and permanent injunctive relief is
granted, WLR's shareholders, including any residing in the
Commonwealth of Virginia, will be irreparably harmed by losing
their right to sell their shares to Tyson at a premium pursuant to
the Tyson Offer.
92. The foregoing circumstances constitute a deprivation of
Tyson's rights under Section 14 of the Securities Exchange Act and
the related SEC proxy rules, the Williams Act, the United States
Constitution, and the laws of the Commonwealth of Virginia, and
will result in irreparable injury to Tyson, to WLR's disinterested
shareholders, and to the investing public.
RELIEF SOUGHT
93. Tyson has no adequate remedy at law.
94. Tyson seeks a declaration that:
37
<PAGE>
(a) notwithstanding the actions taken by counterclaim
defendants, the shares owned by counterclaim defendants W. Wampler,
C. Wampler, Bryan and Mason are "interested shares" under the
Control Share Act;
(b) the Directors have breached and continue to breach
their fiduciary duties and duty of loyalty in taking the actions
and threatened actions described in the counterclaims, including
adopting the Disenfranchisement Amendment, approving the Anti-
Referendum Changes and adopting (and refusing to redeem) the Poison
Pill;
(c) the Control Share Act (Va. Code Section 13.1-728.1, ET.
SEQ.) is unconstitutional;
(d) the Virginia Affiliated Transactions statute (Va.
Code Section 13.1-725 ET SEQ.) is unconstitutional;
(e) the Disenfranchisement Amendment, Anti-Referendum
Changes and Poison Pill are invalid; and
(f) the Virginia statutory scheme regulating mergers and
acquisitions is unconstitutional.
95. Tyson seeks an order to temporarily, preliminarily and
permanently:
(a) direct counterclaim defendants to rescind the
Disenfranchisement Amendment, or in the alternative enjoin the
operation of such Bylaw;
(b) direct counterclaim defendants to rescind the
Anti-Referendum Changes, or in the alternative enjoin the voting of any
38
<PAGE>
shares owned, directly or indirectly, by counterclaim defendants
Bryan, Mason, C. Wampler and W. Wampler;
(c) enjoin counterclaim defendants from interfering in
any way with the conduct of a prompt, fair and impartial referendum
under the Control Share Act;
(d) direct counterclaim defendants to rescind, or in the
alternative to redeem, the Poison Pill; and
(e) enjoin counterclaim defendants from taking any
action in furtherance of the Poison Pill, Golden Parachutes or
Other Parachutes;
(f) enjoin counterclaim defendants from engaging in any
transactions involving the issuance of WLR's voting securities; and
(g) direct counterclaim defendants to rescind the Golden
Parachutes and Other Parachutes.
96. Tyson seeks an order directing WLR to make available for
inspection and copying to Tyson or its representatives the
corporate records to which Tyson is entitled under Virginia Code
Sections 13.1-770-71.
97. Tyson seeks such other and further relief as this Court
may deem just and proper, including its costs and attorney's fees.
Respectfully submitted,
TYSON FOODS, INC.
BY:
----------------------------------
Of Counsel
39
<PAGE>
James L. Sanderlin (VSB #05878)
Thomas E. Spahn (VSB #17411)
Thomas F. Farrell, II (VSB #19109)
R. Craig Wood (VSB #24264)
McGUIRE, WOODS, BATTLE & BOOTHE
One James Center
901 East Cary Street
Richmond, VA 23219
(804) 775-1000
Russell E. Brooks
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, NY 10005-1413
(212) 530-5000
James R. Sipe, Esq. (VSB #3742)
LITTEN & SIPE
Post Office Box 712
410 Neff Avenue
Harrisonburg, VA 22801
(703) 434-5353
Attorneys for Defendant and
Counterclaim-Plaintiffs,
Tyson Foods, Inc. and WLR
Acquisition Corp.
40
<PAGE>
CERTIFICATE OF SERVICE
A copy of this document was mailed on March 21, 1994, to:
William R. Norfolk, Esq.
SULLIVAN & CROMWELL
125 Broad Street
New York, NY 10004
Douglas L. Guynn, Esq.
WHARTON, ALDHIZER & WEAVER
100 S. Main Street
Harrisonburg, VA 22801
___________________________________
41
