<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 140.14a-11(c) or Section
240.14a-12
Tyson Foods, Inc.
(Name of Registrant as Specified in Its Charter)
Tyson Foods, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
(3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
(5) Total fee paid:
______________________________________________________________________
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously paid:__________________________________________
(2) Form Schedule or Registration Statement No.:_____________________
(3) Filing Party:____________________________________________________
(4) Date Filed:______________________________________________________
<PAGE>
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 10, 1997
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 10, 1997, at 10:00 a.m., local time, for the following
purposes:
1. To elect eleven members to the Board of Directors.
2. To approve an amendment to the Company's Amended and Restated
Nonstatutory Stock Option Plan which would increase the number of shares of
Class A Common Stock authorized for issuance thereunder by 4,000,000
shares.
3. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on November 18, 1996,
will be entitled to vote at the Annual Meeting and any adjournments or
postponements 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, 3422 N. College,
Suite 3, Fayetteville, Arkansas 72703.
The Company's Proxy Statement is submitted herewith. The Annual Report for
the fiscal year ended September 28, 1996, 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, 1996
YOUR VOTE IS IMPORTANT
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. 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 10, 1997
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 10, 1997, at 10:00 a.m.,
local time, and any adjournments or postponements 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, 1996.
OUTSTANDING STOCK AND VOTING RIGHTS
As of September 28, 1996, the outstanding shares of the Company's capital
stock consisted of 76,505,899 shares of Class A Common Stock and 68,446,742
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 18,
1996, 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 or postponements 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 quorum or whether the proposal to elect
directors has been approved.
<PAGE>
The enclosed form of proxy also provides a method for shareholders to
abstain from voting with respect to the proposal to approve the amendment
to the Amended and Restated Nonstatutory Stock Option Plan (the "NSO Plan
Proposal"). By abstaining, shares would not be voted either for or against
the NSO Plan Proposal, 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" with respect to the NSO Plan Proposal
will be treated in the same manner as abstentions for voting and quorum
purposes.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of September 28,
1996, 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
INVESCO PLC Class A Common Stock 4,983,515(2) 6.5
11 Devonshire Square
London EC2M 4YR
England
<FN>
(1) Includes 500,000 shares of Class B Common Stock owned of record by Don
Tyson, Senior Chairman of the Board of the Company, and 67,899,040 shares
of Class B Common Stock owned of record by the Tyson Limited Partnership, a
Delaware limited partnership (the "Partnership"). Don Tyson has a 54.3123
combined percentage interest as a general and limited partner in the
Partnership and the Estate of Randal Tyson has a 45.0620 percentage
interest as a limited partner in the Partnership. Barbara A. Tyson, the
widow of Randal 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,
Chairman of the Board and Chief Executive Officer of the Company; Joe F.
Starr, Director 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
2
<PAGE>
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
(unless such partner is the 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 500,000 shares of Class A Common
Stock of the Company.
(2) A report on Schedule 13G has been filed with the Securities and
Exchange Commission by INVESCO PLC ("INVESCO") indicating that INVESCO has
shared voting and dispositive power over 4,983,515 shares of Class A Common
Stock. The foregoing information has been included in reliance upon, and
without independent investigation of, the disclosures contained in
INVESCO's Schedule 13G.
</FN>
</TABLE>
3
<PAGE>
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 September 28,
1996, 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 Aggregate
Name of Beneficially Common Beneficially Common Voting
Beneficial Owner Owned(1) Stock Owned(1) Stock Percentage
===========================================================================
<S> <C> <C> <C> <C> <C>
Don Tyson 632,941(2) 1.0 68,399,040(3) 99.9 90.0
Leland E. Tollett(4) 2,068,327 2.7 *
Joe F. Starr(4) 1,316,689(5) 1.7 *
Neely E. Cassady 817,908 1.1 *
Gerald M. Johnston 556,276 * *
Donald E. Wray 501,066 * *
John H. Tyson(4)(6) 190,524(7) * *
Barbara A. Tyson(6) 103,728 * *
Greg W. Lee 76,539 * *
David S. Purtle 66,356 * *
Fred S. Vorsanger 34,000 * *
Lloyd V. Hackley 5,886 * *
Shelby D. Massey 3,852 * *
All Directors and Executive
Officers as a Group 6,708,118 8.8 68,399,040(3) 99.9 90.8
(20 persons)
<FN>
*Indicates ownership or aggregate voting percentage of less than 1%.
(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 500,000 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.
4
<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 E. 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 543,000 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, serves as
trustee and disclaims beneficial ownership of such shares.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Company's Board of Directors for the ensuing year is currently set at
eleven members and may be fixed from time to time by or in the manner
provided in the Company's Amended and Restated Bylaws. Directors are
elected for a term of one year or until their successors are duly elected
and qualified. The following slate of eleven nominees has been chosen by
the Board of Directors, and the Board recommends that each be elected.
Don Tyson, Age 66; Senior Chairman of the Board of Directors of the
Company. Mr. Tyson served as Chairman of the Board until April 1995 at
which time he was named Senior Chairman. Mr. Tyson has been a director of
the Company since 1952. He served as Chief Executive Officer of the
Company until March 1991.
Leland E. Tollett, Age 59; Chairman and Chief Executive Officer of the
Company. Mr. Tollett was named Chairman of the Board in April 1995. He
served as Vice Chairman, President and Chief Executive Officer of the
Company since March 1991 and President and Chief Operating Officer from
1983 until 1991. He has been a director of the Company since 1984.
Joe F. Starr, Age 63; private investor. Mr. Starr served as a Vice
President of the Company until March 1996. Mr. Starr has served the Company
as a director since 1969.
John H. Tyson, Age 43; 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 of Marketing/Corporate Accounts and as Special
Projects Manager. Mr. Tyson has been a director of the Company since 1984.
Shelby D. Massey, Age 63; 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.
5
<PAGE>
Neely E. Cassady, Age 68; Chairman of the Board of Cassady Associates,
Inc., and has served as an Arkansas State Senator since January 1983. Mr.
Cassady has been a director of the Company since 1974.
Fred S. Vorsanger, Age 68; 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 A. Tyson, Age 47; 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 Foodservice Division. Ms. Tyson has been a
director of the Company since 1988.
Lloyd V. Hackley, Age 55; President, North Carolina Community College
System. Mr. Hackley was Chancellor and Tenured Professor of Political
Science at the Fayetteville State University, Fayetteville, North Carolina,
from 1988 to 1995. Mr. Hackley has been a director of the Company since
1992.
Donald E. Wray, 59; President and Chief Operating Officer of the Company.
Mr. Wray was named President and Chief Operating Officer in April 1995
after serving as Chief Operating Officer since 1991, and Senior Vice
President, Sales and Marketing Division since 1985. Mr. Wray has been a
director of the Company since January 1994.
Gerald M. Johnston, 54; private investor. Mr. Johnston was Executive Vice
President of Finance for the Company from 1981 to June 30, 1996, at which
time he resigned and became a consultant to the Company. Mr. Johnston was
elected as a member of the Board by the Board of Directors on June 27,
1996.
Each of the foregoing nominees is currently serving as a director of the
Company and, with the exception of Mr. Johnston, was elected at the last
Annual Meeting of Shareholders. John H. Tyson is the son of Don Tyson.
Barbara A. Tyson is the widow of Randal Tyson, who was the brother of Don
Tyson and uncle of John H. 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.
On August 22, 1996, Don Tyson entered into a Stipulation and Consent with
the Securities and Exchange Commission pursuant to which Mr. Tyson, without
admitting or denying any wrongdoing, consented and agreed to the entry of a
Final Judgment permanently enjoining him from violating Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and requiring
the payment of a civil money penalty of $46,125. The Stipulation and
Consent was entered as a Final Judgment on October 8, 1996, by the United
States District Court for the Western District of Arkansas. The Stipulation
6
<PAGE>
and Consent arose as a result of the SEC's investigation of certain
purchases and sales of common stock of Arctic Alaska Fisheries Corporation
by Fred Cameron, an acquaintance of Mr. Tyson, in June 1992.
Unless otherwise designated, the enclosed proxy will be voted for the
election of the foregoing eleven 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 (the "Board") 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 D. Massey, Fred S. Vorsanger and Neely E. Cassady met one time and
held one special telephonic meeting during fiscal 1996. The Compensation
Committee has established a special subcommittee thereof comprised of Neely
E. Cassady and Fred S. Vorsanger for the purpose of administering the
Company's performance-based compensation plans. The special subcommittee
met twice during fiscal 1996. 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 S. Vorsanger, Neely E.
Cassady and John H. Tyson. The audit committee met four times during fiscal
1996.
The Board held four regularly scheduled meetings in fiscal 1996. All
current directors, with the exception of Gerald M. Johnston who became a
director in June 1996, attended all of the meetings.
PROPOSAL TO APPROVE AMENDMENT 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 purpose of the NSO Plan is to provide
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 the NSO
Plan Proposal which would increase in the number of shares authorized for
issuance thereunder by 4,000,000 shares. The NSO Plan Proposal has been
approved by the Board.
7
<PAGE>
The NSO Plan currently authorizes the granting of stock options and stock
appreciation rights ("SARs") to purchase or acquire up to 5,500,000 shares
of Class A Common Stock. As of December 1, 1996, approximately 60,525
shares of Class A Common Stock were available for issuance under the NSO
Plan. The NSO Plan Proposal would increase the maximum number of shares
authorized for issuance under the NSO Plan to 9,500,000, subject to
adjustment as provided in the NSO Plan for certain changes in the Company's
capital structure, and the number of shares currently available for grant
thereunder to 4,060,525. The NSO Plan is currently scheduled to expire on
March 31, 2000, unless otherwise extended by the Board.
The NSO Plan is solely administered by the Special Committee of the
Compensation Committee of the Board and is intended to qualify as a
"performance-based" plan under OBRA, as defined (see "Report of
Compensation Committee" for a more detailed description of the Special
Committee and OBRA). 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 Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"). 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 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.
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 Internal Revenue 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 an 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.
8
<PAGE>
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 1996 to (i) the Senior Chairman of the Board, (ii) the Chief
Executive Officer, (iii) each of the other named 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:
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
AMENDED AND RESTATED NONSTATUTORY STOCK OPTION PLAN
===================================================
Number of
Name and Position Dollar Value Options(1)
================= ============ ==========
<S> <C> <C>
Don Tyson $ --- ---
Senior Chairman of the Board
Leland E. Tollett --- ---
Chairman and Chief Executive Officer
Donald E. Wray 128,125 25,000
President and Chief Operating Officer
David S. Purtle 160,000 32,500
Executive V.P., Operations,
Warehousing and Transportation
Greg W. Lee 160,000 32,500
Executive V.P., Sales, Marketing
and Technical Services
Executive Group 835,875(2) 173,000
Non-Executive Director Group --- ---
Non-Executive Officer Employee Group 5,012,863(2) 1,156,850
<FN>
(1) Represents fiscal 1996 option grants.
(2) Dollar value benefit based upon closing price of Company's Class A
Common Stock as of September 28, 1996. These options were granted at
exercise prices of $22.75 and $21.875 per share, which were the fair market
values of the underlying shares on the date of grant.
</FN>
</TABLE>
On September 28, 1996, the closing price of the Company's Class A Common
Stock, as listed on the Nasdaq National Market was $27.00 per share.
9
<PAGE>
Approval of the NSO Plan Proposal will require the affirmative vote of the
majority of votes cast by the holders of the shares of Class A Common Stock
and Class B Common Stock voting together as a single class. The Board
recommends a vote FOR the NSO Plan Proposal.
<TABLE>
<CAPTION>
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
Senior Chairman, the Chairman and Chief Executive Officer, and the three
highest paid executive officers of the Company for such period in all
capacities in which they served:
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Name and Other Annual All Other
Principal Compensa- Options/ Compensa-
Position Year Salary Bonus tion SARs tion(2,3,4)
===========================================================================
<S> <C> <C> <C> <C> <C> <C>
Don Tyson,
Senior Chairman of the Board
1996 $720,000 -0- $979,839(1) -0- $ 51,120
1995 720,000 -0- 973,776(1) -0- 155,562
1994 630,000 792,000 723,756(1) -0- 142,147
Leland E. Tollett,
Chairman and Chief Executive Officer
1996 $607,500 -0- N/A -0- $43,132
1995 600,000 -0- N/A -0- 55,800
1994 513,750 660,000 N/A -0- 38,776
Donald E. Wray,
President and Chief Operating Officer
1996 $398,869 -0- N/A 25,000 $28,319
1995 379,688 -0- N/A -0- 31,907
1994 299,955 247,500 N/A -0- 23,551
David S. Purtle,
Executive V.P., Operations, Warehousing and Transportation
1996 $294,062 -0- N/A 32,500 $20,878
1995 278,438 -0- N/A 2,500 22,794
1994 246,163 151,250 N/A -0- 19,381
Greg W. Lee,
Executive V.P., Sales, Marketing, and Technical Services
1996 $275,000 -0- N/A 32,500 $19,525
1995 253,750 -0- N/A 2,500 18,017
1994 198,958 137,500 N/A -0- 15,586
10
<PAGE>
<FN>
(1) In 1996, "Other Annual Compensation" for Mr. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $571,720 and $398,119, respectively. In 1995,
"Other Annual Compensation" for Mr. Tyson includes travel and entertainment
costs and amounts reimbursed for estimated income tax liability related
thereto of $566,046 and $380,245, respectively. 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 1996, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Purtle and Lee: (i) Company matching contributions to
the Employee Stock Purchase Plan of $36,000; $30,375; $19,943; $14,703 and
$13,750 for each named executive, respectively, and (ii) Company
contributions to the Executive Savings Plan of $15,120; $12,758; $8,376;
$6,175 and $5,775 on behalf of each named executive, respectively, to match
a portion of 1996 pretax elective deferral contributions (included under
salary) made by each person to such plans. There were no premium payments
under split dollar life insurance policies on Mr. Tyson in 1996.
(3) In 1995, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Purtle and Lee: (i) Company matching contributions to
the Employee Stock Purchase Plan of $36,000; $30,000; $18,984; $13,922 and
$12,688 for each named executive, respectively, and (ii) Company
contributions to the Executive Savings Plan of $30,960; $25,800; $12,923;
$8,872 and $5,329 on behalf of each named executive, respectively, to match
a portion of 1995 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.
(4) In 1994, "All Other Compensation" includes the following for Messrs.
Tyson, Tollett, Wray, Purtle and Lee: (i) Company matching contributions to
the Employee Stock Purchase Plan of $31,500; $25,687; $14,998; $12,308 and
$9,948 for each named executive, respectively, and (ii) Company
contributions to the Executive Savings Plan of $20,230; $13,089; $8,553;
$7,073 and $5,638 on behalf of each named executive, respectively, to match
a portion of 1994 pretax elective deferral contributions (included under
salary) made by each person to such plans. Also includes $90,417,
representing the dollar value benefit of premium payments under split
dollar life insurance policies on Mr. Tyson for which the Company will be
reimbursed for premiums paid.
</FN>
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
======================================
The following table shows all individual grants of stock options to the
named executives during the fiscal year ended September 28, 1996.
Individual Grants
========================= Potential Realizable
Number of Value at Assumed
Securities Annual Rates of
Underlying % of Total Stock Price
Options/ Options/SARs Exercise Appreciation
SARS Granted to or Base Expira- for Option Term(2)
Granted Employees Price tion --------------------
Name (1) In Fiscal Year ($/Sh) Date 5% 10%
- ---- --- -------------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Don Tyson --- --- --- --- --- ---
Leland E. Tollett--- --- --- --- --- ---
Donald E. Wray 25,000 8.3% $21.875 3/10/06 $343,977 $871,578
David S. Purtle 7,500 0.7% 22.750 11/19/05 107,305 271,932
25,000 8.3% 21.875 3/10/06 343,977 871,578
Greg W. Lee 7,500 0.7% 22.750 11/19/05 107,305 271,932
25,000 8.3% 21.875 3/10/06 343,977 871,578
<FN>
(1) These shares were granted with respect to the Company's Class A Common
Stock for a ten-year period beginning as of November 20, 1995, and March
15, 1996. The options do not qualify as "incentive stock options" under the
Internal Revenue Code. The exercise prices of $22.75 and $21.875 were the
fair market value of the Class A Common Stock on the dates of the grants.
Vesting at 20% begins on November 20, 1998, the end of the third year, and
continues at 20% for each subsequent year until all shares are vested on
March 10, 2003. Options not exercised expire on March 10, 2006. Unvested
options are forfeited upon termination of employment.
(2) As required by Securities and Exchange Commission rules and
regulations, potential realizable values are based on the assumption that
the Class A Common Stock price appreciates at the annual rates shown
compounded annually from the date of grant until the end of the ten-year
option term and is not intended to forecast appreciation in stock price.
</FN>
</TABLE>
Tyson's stock price at the end of the ten-year term based on a 5% annual
appreciation would be $35.63 and $37.05; and on a 10% annual appreciation
would be $56.73 and $59.01.
12
<PAGE>
<TABLE>
<CAPTION>
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.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
===========================================================================
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End at FY-End(1)
------------- ---------------
Shares Unexercised
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ---- ------------ -------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Don Tyson --- --- --- --- --- ---
Leland E. Tollett --- --- 2,500 10,000 $13,438 $53,750
Donald E. Wray --- --- 2,500 35,000 13,438 181,700
David S. Purtle --- --- 2,500 45,000 13,438 226,875
Greg W. Lee --- --- 2,500 45,000 13,438 226,875
<FN>
(1) Amounts represent the market value ($27.00) less the exercise or base
price for all shares underlying unexercisable options as of September 28,
1996.
</FN>
</TABLE>
Director Compensation
- ---------------------
Neely E. Cassady, Fred S. Vorsanger, Lloyd V. Hackley, Shelby D. Massey,
and Joe F. Starr, outside directors serving on the board, receive an annual
retainer of $25,000, while Don Tyson, Leland E. Tollett, John H. Tyson,
Barbara A. Tyson, Donald E. Wray, and Gerald M. Johnston, directors who are
also employees or consultants of the Company, receive $2,500 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, 1997, which employment is automatically extended for
successive one year periods thereafter, unless terminated by either the
13
<PAGE>
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, 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 (the "Committee") of the Board was comprised
during fiscal 1996 of Messrs. Shelby D. Massey, Fred S. Vorsanger and Neely
E. 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 Committee relating to the compensation of
the Company's executive officers are reviewed by the full Board, except for
decisions relating to certain of the Company's compensation plans which
require approval and administration solely by a committee comprised of
"outside/disinterested directors." Effective November 18, 1994, the
Committee approved the formation of a special subcommittee (the "Special
Committee") comprised of Messrs. Vorsanger and Cassady for the purpose of
administering awards under the Company's performance-based compensation
plans as required by the Omnibus Budget Reconciliation Act of 1993
("OBRA").
The following is a report submitted by the above-listed committee members
in their capacity as the Compensation Committee of the Board, addressing
the Company's compensation policy as it related to executive officers for
fiscal 1996.
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.
14
<PAGE>
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 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 with respect to Mr. Tyson,
whose fiscal 1996 non-performance-based compensation exceeded $1 million,
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 during
the last fiscal year. With respect to stock-based compensation, the
Company's Amended and Restated Nonstatutory Stock Option Plan takes
advantage of an exemption from OBRA for stock option grants.
Performance Measures
- --------------------
In evaluating annual executive compensation for fiscal 1996, the Committee
subjectively considered a number of factors including earnings per share,
return on assets, return on equity, sales growth and total return to
shareholders. These factors are compared with problems and advantages that
are unique to the industry, performance in prior years and performance of
other companies in the industry. Although the Company has a diversified
food products line, approximately 78% of the Company's revenues in fiscal
1996 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.
Fiscal 1996 Compensation
- ------------------------
For fiscal 1996, the Company's executive compensation program consisted of
(i) base salary, adjusted from the prior year, (ii) matching contributions
to incentive and deferred compensation plans, (iii) stock option grants
under the Company's Nonstatutory Stock Option Plan, and (iv) contributions
under the Company's broad-based Stock Purchase Plan which are fixed as a
percentage of employee participant contributions. No cash bonuses were paid
in fiscal 1996.
15
<PAGE>
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. The 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 have historically been awarded to executives from a bonus pool
determined annually by the Committee upon the recommendation of management.
The amount of the bonus pool has been 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. A number of events occurred in fiscal 1996 that affected
achievement of the Company's performance goals including (i) the highest
grain costs on record, (ii) excess supply of competing meats, and (iii) the
temporary ban of imports of U.S. chicken into Russia. Fiscal 1996 earnings
per share decreased by 60% compared to 1995, with a total decrease over
five years of 42.9%. Return on beginning assets for fiscal 1996 was 2%
compared to 6% in fiscal 1995. Return on average shareholders' equity for
1996 was approximately 5.8% compared to 16.0% in 1995. Total return to
shareholders (total stock price plus reinvested dividends) for 1996 was
1.0%, compared to 12.3% in 1995 with a total return over the past five
years of 6.5%.
Despite the challenges posed by the factors described above, the dedicated
efforts of the Company's executives allowed it to achieve record sales and
increase market share. Sales in fiscal 1996 increased 17.1% over sales from
fiscal 1995, with a total increase over the last five years of
approximately 64.6% or 10.5% compounded annually. However, because of the
Company's performance in other areas (primarily earnings per share) and
because of the operating environment present in the industry over the past
year, the Committee did not approve bonuses for fiscal 1996.
The Company has implemented a new bonus plan for fiscal 1997, designed to
apply more objective criteria to the determination of executive
compensation. Under this arrangement, bonus compensation will be primarily
based upon the attainment of two performance goals -- minimum net return on
assets and specific increases in earnings per share over the previous year.
For example, in fiscal 1997, executives will only be entitled to receive
bonus compensation at 100% of targeted levels upon the Company's attainment
of these goals which are presently set at a 7% return on beginning assets
coupled with a 10% increase in earnings per share.
16
<PAGE>
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, has been delegated to
and is in the discretion of the Special Committee. In making such
determination, the Special Committee reviews the Company's performance as
determined by the price of its stock, the relation of long-term
compensation to cash compensation, 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 Special Committee, during fiscal 1996, granted
options on November 20, 1995, to purchase a total of 1,119,850 shares of
Class A Common Stock to executive officers and managers at an exercise
price of $22.750 per share and 300,000 shares of Class A Common Stock on
March 12, 1996, at $21.875 per share, which equaled the fair market value
of the stock on the dates of grants. (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 Special Committee did not deem it
appropriate to grant options to the Company's two most senior executive
officers as described in the Summary Compensation Table. The Committee did
not award any restricted shares of Class A Common Stock under the Company's
Restricted Stock Bonus Plan.
Senior Chairman and CEO Compensation
- ------------------------------------
The general approach used in setting the base compensation for Don Tyson,
the Company's Senior Chairman, and Leland E. Tollett, Chairman and Chief
Executive Officer, 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 Mr.
Tollett's base salary is below the median level of compensation for similar
positions in similar sized companies.
Effective fiscal 1995, the Special Committee (with the approval of the
Shareholders of the Company) adopted the Executive Bonus Plan for Messrs.
Tyson and Tollett in order to comply with the provisions of OBRA. The
performance-based plan provides that Messrs. Tyson and Tollett are entitled
to receive a pro-rata percentage of a "bonus pool" to be funded up to an
annual aggregate maximum amount in any fiscal year equal to 1% of the
Company's pre-tax income (as defined in the plan) for the fiscal year plus
0.5% of the increase in pre-tax income over the previous fiscal year. The
Special Committee retains full discretion to reduce or eliminate bonus
payments otherwise payable under the Senior Executive Performance Bonus
Plan.
17
<PAGE>
Based upon Messrs. Tyson's and Tollett's pro-rata percentage of the bonus
pool, the Special Committee has determined that they would have been
eligible for a cash bonus in fiscal 1996 of $927,899 and $397,671,
respectively. However, because (i) no bonuses were being granted to other
executives and (ii) Messrs. Tyson and Tollett made it clear that they would
not accept any bonuses if granted, the Special Committee did not award any
bonuses to either Mr. Tyson or Mr. Tollett. Mr. Tyson's determination to
forego payment under the Senior Executive Bonus Plan was based in part upon
his receipt of other compensation during fiscal 1996, including
reimbursements for travel and entertainment as disclosed in the Summary
Compensation Table.
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 1996 adequately reflect the Company's compensation goals and
policies.
Shelby D. Massey
Fred S. Vorsanger*
Neely E. Cassady*
*Members of Special Committee
18
<PAGE>
<TABLE>
<CAPTION>
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.
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.
1991 1992 1993 1994 1995 1996
==== ====== ====== ====== ====== ======
<S> <C> <C> <C> <C> <C> <C>
Tyson Foods 100 114.99 110.05 123.94 139.26 138.64
S&P 500 100 107.72 118.32 119.29 150.68 177.21
Peer Group
Weighted 100 108.34 137.24 184.19 167.90 171.79
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 1991.
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 1996. The Company anticipates that it
will continue to engage in similar transactions with such persons in the
future.
Loans
- -----
During fiscal 1996, other than for ordinary travel and expense payments,
the Company has made no loans or advances to any of its officers, directors
or affiliates.
19
<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 1996, 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 F. Starr and the
children of Don Tyson, including John H. Tyson, are partners, $1,333,080;
(iv) the Tyson Children Partnership of which John H. Tyson is a partner,
$597,500; (v) Estate of Randal Tyson, $120,000; (vi) Estates of John and
Helen Tyson, of which Don Tyson is executor, $27,965; (vii) Leland E.
Tollett, $224,623; (viii) certain entities controlled by Joe F. Starr,
$105,500; (ix) Gerald M. Johnston, $424,710; (x) a partnership in which
Gerald M. Johnston and Donald E. Wray are among the partners, $98,880; and
(xi) an entity of which Wayne Britt, Executive Vice President and Chief
Financial Officer, is affiliated, $150,037.
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 1996. Additionally, the Company has a lease arrangement
with Don Tyson for the use of a boat with aggregate payments of $226,560.
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 for terms ending
November 1998 with aggregate lease payments of $3,621,727 during fiscal
1996.
4. A subsidiary of the Company, Cobb-Vantress, Inc., has a contract for a
breeder hen Research and Development farm with Leland E. Tollett with
aggregate payments of $674,077 during fiscal 1996.
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 1996, the purchases from the Company of
the above-enumerated items, which were at fair market value, by such
persons were: Don Tyson, $6,589,345; Joe F. Starr, $1,720,825; Barbara A.
Tyson, $1,598,409; and John H. Tyson, $1,780,169.
20
<PAGE>
6. The Company has a contract for poultry growout services with an entity
in which Donald E. Wray and Gerald M. Johnston are partners with aggregate
payments of $189,808 during fiscal 1996.
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 $2,628,457 for fiscal 1996 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,
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 $1,888,951 for fiscal
1996 pursuant to such agreement.
COMPLIANCE WITH SECTION 16(a) of the SECURITIES EXCHANGE ACT of 1934
=====================================================================
The Company's directors and executive officers 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 directors and executive officers have
been complied with.
AUDITORS TO BE PRESENT
======================
A representative of Ernst & Young LLP, the Company's auditors for fiscal
1996 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 1998 Annual
Meeting of Shareholders must be received by the Company on or before August
8, 1997, 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.
21
<PAGE>
ADDITIONAL INFORMATION AVAILABLE
================================
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, THE COMPANY WILL FURNISH A COPY OF
THE COMPANY'S 1996 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 18, 1996, THE PERSON MAKING THE REQUEST WAS A
BENEFICIAL OWNER OF CAPITAL STOCK OF THE COMPANY.
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 PROMPTLY RETURN 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, 1996
22
<PAGE>
APPENDICES TO PROXY STATEMENT
(FRONT)
TYSON FOODS, INC. PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS, JANUARY 10, 1997
The undersigned shareholder(s) of TYSON FOODS, INC. hereby appoint(s) Don
Tyson and Joe F. Starr, and each or either of them, the true and lawful
agents and attorneys-in-fact for the undersigned, with power of
substitution, to attend the meeting and to vote the stock owned by or
registered in the name of the undersigned, as instructed below, at the
Annual Meeting of Shareholders to be held at the Walton Arts Center,
Fayetteville, Arkansas, on January 10, 1997, at 10:00 a.m. local time, and
at any adjournments or postponements thereof, for the transaction of the
following business:
To elect eleven (11) members to the Board of Directors:
Don Tyson, John H. Tyson, Joe F. Starr, Neely Cassady,
Fred S. Vorsanger, Leland E. Tollett, Shelby Massey,
Barbara Tyson, Lloyd V. Hackley, Donald E. Wray, Gerald M. Johnston
To approve an amendment to the Company's Amended and Restated Nonstatutory
Stock Option Plan which would increase the number of shares authorized for
issuance by 4,000,000 shares.
To consider and act upon such other business as may properly come before
the Annual Meeting or any adjournments thereof.
23
<PAGE>
(BACK)
Please mark your votes as in this example. [X]
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL
VOTE THESE SHARES FOR THE ELECTION OF THE NAMED NOMINEES.
FOR WITHHOLD
1. Election of Directors (See Reverse) [_] [_]
If you wish to withhold authority to vote for any nominee(s), list such
nominee(s) below.
- ------------------------------------------------------------------------
FOR WITHHOLD ABSTAIN
2. To approve an amendment to the Company's [_] [_] [_]
Amended and Restated Nonstatutory Stock Option
Plan which would increase number of authorized
shares for issuance thereunder.
FOR WITHHOLD ABSTAIN
3. To consider and act upon such other business [_] [_] [_]
as may properly come before the Annual Meeting
and any other adjournments or postponements
thereof.
I PLAN TO ATTEND THE MEETING [_]
(The signature(s) should be exactly as
the name(s) appears at left. If stock is
in the name of (i) two or more persons,
each should sign; (ii) a corporation, the
president or other authorized officer
should sign; (iii)a partnership, an
authorized person should sign in the
partnership name. Persons signing as
attorney, executor, administrator,
trustee, guardian or other fiduciary
should state their full title.)
Please sign, date and return this proxy as soon as possible.
- -------------------------------------------------
SIGNATURE(S) DATE
- -------------------------------------------------
SIGNATURE(S) DATE
24
<PAGE>
TYSON FOODS, INC.
AMENDED AND RESTATED
NONSTATUTORY STOCK OPTION PLAN
Adopted: December 17, 1982
Amended and Restated: September 5, 1987
Amended and Restated: November 18, 1994
25
<PAGE>
TYSON FOODS, INC.
AMENDED AND RESTATED
NONSTATUTORY STOCK OPTION PLAN
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
(a)The Tyson Foods, Inc. Nonstatutory Stock Option Plan (the "Plan") was
originally adopted by the Board of Directors of Tyson Foods, Inc. (the
"Company") on December 17, 1982 and was originally approved by majority
vote of the stockholders of the Company on February 25, 1983. The Plan has
been subsequently amended by the Board of Directors of the Company on
September 5, 1987 and November 18, 1994 is hereby restated in such amended
form.
(b)The purpose of the Plan is to provide a means whereby key employees and
independent contractors of the Company or its affiliates may be given an
opportunity to purchase shares of the Class A Common Stock of the Company
(the "Stock") pursuant to options which do not qualify as "incentive stock
options" under Section 422A of the Internal Revenue Code. In addition, key
employees may be awarded stock appreciation rights ("Rights") payable in
Stock or cash, or any combination thereof, as provided herein.
(c)The term "key employee" or "key employees" herein shall mean one or
more (i) employees of the Company or its affiliates, and (ii) officers,
directors and consultants, whether employees or independent contractors,
who render those types of services which tend to contribute materially to
the success of the Company or an affiliate or which reasonably may be
anticipated to contribute materially to the future success of the Company
or an affiliate.
(d)The term "affiliates" as used in the Plan means parent or subsidiary
corporations, as defined in Section 425 of the Internal Revenue Code (but
substituting "Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. STOCK SUBJECT TO THE PLAN.
(a)The total number of shares of Stock which either may be purchased
pursuant to the exercise of options granted under the Plan or acquired
pursuant to the exercise of Rights granted under the Plan shall not exceed,
in the aggregate, 5,500,000 shares (which amount reflects all adjustments
through November 18, 1994 and is subject to future adjustment in accordance
with paragraph 2(b)) (the "Total Plan Shares"). Accordingly, the sum of
(i) the number of shares of Stock subject at any time to options or Rights
granted under the Plan and (ii) the number of shares of Stock then
outstanding pursuant to exercises of options or Rights granted under the
Plan shall not exceed the Total Plan Shares. Additionally, the maximum
number of shares of Stock subject to option and Rights granted to an
"executive officer" of the Company during any calendar year (as determined
by the Company's Board of Directors from time to time) shall not exceed 2%
of the Total Plan Shares. As the Committee (as hereinafter defined) may
determine from time to time, the shares of Stock subject to options or
Rights granted under the Plan may consist either in whole or in part of
shares of authorized but unissued Stock, or shares of authorized and issued
Stock reacquired by the Company. If an option or Right is surrendered or
for any other reason ceases to be exercisable in whole or in part, the
shares which were subject to such option or Right but as to which the
option or Right had not been exercised shall continue to be available under
the Plan.
26
<PAGE>
(b)If there shall be any change in the Stock subject to the Plan or the
Stock subject to any option or Right granted hereunder, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
split, stock dividend (in excess of 2%), or other change in the corporate
structure of the Company, appropriate adjustment shall be made by the
Committee to the Total Plan Shares and the number of shares and price per
share subject to outstanding options or Rights in order to preserve, but
not to increase, the benefits of the holder; provided, however, that
subject to any required action by the stockholders, if the Company shall
not be the surviving corporation in any merger, consolidation, or
reorganization, every option or Right outstanding hereunder shall
terminate, unless the surviving corporation shall (subject to any
applicable provisions of the Internal Revenue Code) assume (with
appropriate changes) the outstanding options or Rights or replace them with
new options or Rights of comparable value. Notwithstanding the preceding
proviso, if such surviving corporation does not so assume or replace the
outstanding options or Rights hereunder, each holder shall have the right
immediately prior to such merger, consolidation or reorganization to
exercise his outstanding option(s) or Right(s).
3. ELIGIBILITY.
Persons who shall be eligible to have granted to them the options or
Rights provided for by the Plan shall be such bona fide key employees of
the Company or its affiliates (including officers, whether or not they are
directors) as the Committee in its discretion shall designate from time to
time.
4. ADMINISTRATION OF THE PLAN.
(a)The Plan shall be administered by the Compensation Committee of the
Board of Directors, or a Subcommittee thereof (the "Committee"), consisting
of not less than two directors of the Company to be appointed by the Board
of Directors. The Board of Directors may from time to time remove members
from, or add members to, the Committee with or without cause. Vacancies on
the Committee, howsoever caused, shall be filled by the Board of Directors.
Each member of the Committee shall be (i) a "disinterested person" within
the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and (ii) an "outside director" as defined pursuant to Section 162(m) of the
Omnibus Budget Reconciliation Act of 1993, as amended. The Committee shall
select one of its members as chairman and shall hold meetings at such times
and places as it may determine. A majority of the Committee shall
constitute a quorum and acts of the Committee at which a quorum is present,
or acts reduced to or approved in writing by all the members of the
Committee, shall be the valid acts of the Committee.
(b)The Committee may from time to time determine which key employees of
the Company or any affiliates shall be granted options or Rights under the
Plan and the terms thereof, and, subject to the provisions of paragraph 2
hereof, the number of shares which may be acquired under the options or
Rights.
(c)The Committee shall report to the Board of Directors the names of
persons granted options or Rights, the number of shares covered by each
option or Right, and the terms and conditions of each such option or Right.
(d)The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and to
construe and interpret the Plan, the rules and regulations, and the
27
<PAGE>
instruments evidencing options, Rights and loans granted under the Plan and
to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and
interpretations of the Committee shall be binding on all holders of options
or Rights.
(e)The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon
any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Board of Directors or the Committee in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or
former member of the Committee or of the Board of Directors shall be liable
for any action or determination made in good faith with respect to the Plan
or any option or Right granted hereunder.
5. THE OPTION PRICE.
(a)The option price of the shares of Stock covered by each option shall
not be less than the fair market value of such shares on the date the
option is granted. Such price shall be subject to adjustment as provided in
paragraph 2(b) hereof.
(b)The option price shall become due immediately upon exercise of the
option and shall be payable in full in cash or cash equivalents; provided,
however, that the Committee shall have the authority, exercisable at its
discretion either at the time the option is granted or at the time it is
exercised, to make the option payable in one of the alternative forms
specified below:
(i)full payment in shares of Stock having a fair market value on
the Exercise Date (as such term is defined below) equal to the
option price; or
(ii)a combination of shares of Stock valued at fair market value
on the Exercise Date and cash or cash equivalents, equal in the
aggregate to the option price.
For purposes of this paragraph 5(b), the Exercise Date shall be the date on
which the Company receives written notice of the exercise of the option,
together with payment of the option price in the form authorized by the
Committee.
(c)For purposes of determining the fair market value of Stock on any
relevant date under subparagraph (a) or (b) above, the following rules
shall apply:
(i)If the Stock is not at the time listed or admitted to trading
on a stock exchange or in the over-the-counter market under the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), the fair market value shall be the
mean between the lowest reported bid price and highest reported
asked price of the Stock on the date in question in the over-the-
counter market, as such prices are reported in a publication of
general circulation selected by the Company and regularly
reporting the market price of the Stock in such market; or
(ii)If the Stock is at the time listed or admitted to trading in
the over-the-counter market under NASDAQ or on any stock
exchange, then the fair market value shall be the reported
closing sale price of the Stock on the date in question on NASDAQ
or on the principal exchange on which the Stock is then listed or
admitted to trading, as the case may be. If no reported sale of
Stock takes place on the date in question, then the reported
closing asked price of the Stock on such date shall be
determinative of fair market value.
28
<PAGE>
(d)If any portion of the option price is paid by delivery of shares of
Stock, the certificates representing such shares shall be presented to the
Company in proper form for transfer accompanied by all requisite stock
transfer tax stamps or cash in lieu thereof.
6. TERMS AND CONDITIONS OF OPTIONS.
Each option granted pursuant to the Plan shall be evidenced by a written
Stock Option Agreement executed by the Company and the person to whom such
option is granted. The term of each option shall be for such a period of
time, not more than ten years from the date it is granted, as the Committee
may determine. During the lifetime of the optionee, the option shall be
exercisable only by the optionee or by his guardian or legal representative
and shall not be assignable or transferable other than by will or the laws
of descent and distribution. In addition, the Stock Option Agreement may
contain such other terms, provisions and conditions as may be determined by
the Committee including, without limitation, provisions relating to the
effect upon exercisability of the death or termination of employment of the
optionee, the extension of credit to the optionee by the Company or the
guarantee by the Company of any loan to the optionee from a third party to
finance the exercise of the option, and the terms of any Right granted with
respect to the option.
During the term of each option granted pursuant to the Plan, the
Committee, with the consent of the holder of the Option, may modify any or
all of the terms, provisions and conditions of such option so long as such
modified terms, provisions and conditions are otherwise permissible
pursuant to the terms of the Plan as approved by the stockholders of the
Company.
7. STOCK APPRECIATION RIGHTS.
(a)In the discretion of the Committee, a Right may be granted (i) alone,
(ii) simultaneously with the grant of an option and in tandem therewith or
in the alternative thereto or (iii) subsequent to the grant of an option
and in tandem therewith or in the alternative thereto. Any Right shall be
exercisable upon such additional terms and conditions as may from time to
time be prescribed by the Committee; provided that a Right granted alone
shall be deemed exercised on the last day of its term if the Right is not
otherwise exercised by the holder thereof and the fair market value of the
shares of Stock subject to the Right exceeds the exercise price thereof on
such date. During the lifetime of a holder, a Right shall be exercisable
only by the holder or by his guardian or legal representative and shall not
be assignable or transferable other than by will or the laws of descent and
distribution.
(b)The exercise price of a Right granted alone shall be determined by the
Committee, but shall not be less than one hundred percent (100%) of the
fair market value of one share of Stock on the date of grant of such Right.
A Right granted simultaneously with or subsequent to the grant of an option
and in tandem therewith or in the alternative thereto shall have the same
exercise price as the related option, shall be transferable only upon the
same terms and conditions as the related option, and shall be exercisable
only to the same extent as the related option; provided however, that a
Right, by its terms, shall be exercisable only when the fair market value
of the shares of Stock subject to the Right and related option exceeds the
exercise price thereof.
(c)Upon exercise of a Right granted simultaneously with or subsequent to
an option and in the alternative thereto, the number of shares of Stock for
which the related option shall be exercisable shall be reduced by the
29
<PAGE>
number of shares of Stock for which the Right shall have been exercised.
The number of shares of Stock for which a Right granted in the alternative
to an option shall be exercisable shall be reduced upon any exercise of the
related option by the number of shares of Stock (for which such option
shall have been exercised.
(d)A Right shall entitle the holder to receive from the Company, upon a
written request filed with the Corporate Secretary of the Company at its
principal offices (the "Request"), a number of shares of Stock as specified
in the Request (with or without restrictions as to substantial risk of
forfeiture and transferability, as determined by the Committee in its sole
discretion), an amount of cash, or any combination of shares of Stock and
cash, as set forth in the Request (but subject to the approval of the
Committee, in its sole discretion, at any time up to and including the time
of payment, as to the making of any cash payment), having an aggregate
value equal to the product of (i) the excess of the fair market value on
the day of such Request of one share of Stock over the exercise price per
share of Stock specified in such Right or its related option, multiplied by
(ii) the number of shares of Stock for which such Right shall be exercised;
provided, however, that the Committee, in its discretion, may impose a
maximum limitation on the amount of cash, the fair market value of shares
of Stock, or a combination thereof, which may be received by a holder upon
exercise of a Right.
(e)Any election by a holder of a Right to receive cash in full or partial
settlement of such Right, and any exercise of such Right for cash, may be
made only by a Request filed with the Corporate Secretary of the Company
during the period beginning on the third business day following the date of
release for publication by the Company of quarterly or annual summary
statements of earnings and profits and ending on the twelfth business day
following such date. Within sixty (60) days of the receipt by the Company
of a Request to receive cash in full or partial settlement of a Right or to
exercise such Right for cash, the Committee shall, in its sole discretion,
either consent to or disapprove, in whole or in part, such Request. If the
Committee disapproves in whole or in part any election by a holder to
receive cash in full or partial settlement of a Right or to exercise such
Right for cash, such disapproval shall not affect such holder's right to
exercise such Right at a later date, to the extent that such Right shall be
otherwise exercisable, or to elect the form of payment at a later date,
provided that an election to receive cash upon such later exercise shall be
subject to the approval of the Committee. Additionally, such disapproval
shall not affect such holder's right to exercise any related option or
options granted to such holder under the Plan. Notwithstanding the
foregoing, a holder or a Right shall not receive cash in full or partial
settlement of such Right, or upon the full or partial exercise of such
Right, if such Right or the related option shall have been exercised during
the first six (6) months of its respective term; provided, however, that
such prohibition shall not apply if the holder of such Right dies or
becomes disabled (within the meaning of Section 105(d) (4) of the Internal
Revenue Code) prior to the expiration of such six-month period, or if such
holder is not a director or officer of the Company or a beneficial owner of
the Company who is described in Section 16(a) of the Exchange Act.
(f)The fair market value of shares of Stock subject to Rights shall be
determined in accordance with paragraph 5(c).
8. LOANS OR GUARANTEE OF LOANS.
The Committee may authorize the extension of a loan to an optionee by the
Company (or the guarantee by the Company of a loan obtained by an optionee
from a third party) in order to assist an optionee to exercise an option
30
<PAGE>
granted under the Plan. The terms of any Loans or guarantees, including
the interest rate, if any, and terms of repayment, will be subject to the
discretion of the Committee. Loans and guarantees may be granted with or
without security, the maximum credit available being the exercise price of
the option sought to be executed plus any tax liability incurred upon
exercise of the option.
9. TERMINATION AND NEW GRANT OF OPTIONS OR RIGHTS.
The Committee shall have the authority to effect, at any time and from
time to time, with the consent of the affected holders, the termination of
any or all outstanding options or Rights under the Plan and to grant in
substitution therefor new options or Rights under the Plan covering the
same or different numbers of shares of Stock. The option price of
substituted options and the exercise price of substituted Rights shall be
determined by the Committee subject to the requirements of Paragraph 5(a)
and Paragraph 7(b), respectively.
10. USE OF PROCEEDS.
Proceeds realized from the exercise of options granted under the Plan
shall constitute general funds of the Company.
11. PURCHASE FOR INVESTMENT.
Except as hereafter provided, the holder of an option or Right granted
hereunder shall, upon any exercise thereof, execute and deliver to the
Company a written statement, in form satisfactory to the Company, in which
such holder represents and warrants that such holder is purchasing or
acquiring all shares of Stock acquired thereunder for such holder's own
account, for investment only and not with a view to the resale or
distribution of any of such shares. Any resale or distribution of such
shares shall he made only pursuant to either (a) a current and effective
registration statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), or (b) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer of sale or sale of such
shares, obtain a favorable written opinion, in form and substance
satisfactory to the Company, from counsel for or approved by the Company,
as to the application of such exemption thereto. The foregoing restriction
shall not apply to (i) issuances by the Company so long as the shares being
issued are registered under the Securities Act and a prospectus in respect
thereof is current or (ii) reofferings of shares by "affiliates" of the
Company (as such term is defined in Rule 405 or any successor rule or
regulation promulgated under the Securities Act) if the shares being
reoffered are registered under the Securities Act and a prospectus in
respect thereof is current.
12. ISSUANCE OF CERTIFICATES, LEGENDS AND PAYMENT OF EXPENSES.
(a)Upon any exercise of an option or Right which may be granted hereunder
and, in the case of an option, payment of the option price, a certificate
or certificates for the shares of Stock as to which the option or Right has
been exercised shall be issued by the Company in the name of the person
exercising the option or Right and shall be delivered to or upon the order
of such person or persons, as permitted by state or federal securities law.
(b)The Company may place such legend or legends upon the certificates for
shares of Stock issued upon exercise of an option or Right granted
31
<PAGE>
hereunder, and the Committee may issue such "stop transfer" instructions to
its transfer agent in respect of such shares, as the Committee, in its
discretion, determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from the registration requirements
of, the Securities Act, or (ii) implement the provisions of any agreement
between the Company and the Optionee or grantee with respect to such
shares.
(c)The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of shares of Stock, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing
or amending of a registration statement under the Securities Act, which
fees and expenses shall be borne by the recipient of the shares unless such
registration statement has been filed by the Company for its own corporate
purposes (and the Company so states) in which event the recipient of the
shares shall bear only such fees and expenses as are attributable solely to
the inclusion of such shares in the registration statement.
(d)All shares of Stock issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
13. WITHHOLDING TAXES.
(a)The Company may require an optionee exercising a Right or option
granted hereunder to reimburse the corporation which employs such optionee
for any taxes required by any government to be withheld or otherwise
deducted and paid by such corporation in respect of the issuance of shares
of Stock. In lieu thereof, the corporation which employs such optionee
shall have the right to withhold the amount of such taxes from any other
sums due or to become due from such corporation to the optionee upon such
terms and conditions as the Committee shall prescribe.
(b)The Committee may, in its discretion, permit an optionee to satisfy the
optionee's tax withholding obligations under Paragraph 13(a), in whole or
in part, by tendering to the Company shares of Stock acquired in the option
exercise having a fair market value, computed in accordance with paragraph
5(c), equal to the amount which would otherwise be withheld. Optionees
wishing to have all or any portion of their tax obligation satisfied in
such manner must notify the Corporate Secretary of the Company of such fact
in writing on or before the exercise date of the option.
14. LISTING OF SHARES AND RELATED MATTERS.
If at any time the Board of Directors shall determine in its discretion
that the listing, registration or qualification of the shares of Stock
covered by the Plan upon any national securities exchange or under any
state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in
connection with, the sale or Purchase of shares under the Plan, no shares
shall be delivered unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Board
of Directors.
15. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN.
(a)The Board of Directors may at any time suspend or terminate the Plan,
and may amend it from time to time in such respects as the Board may deem
advisable; provided, however, except as provided in paragraph 2(b) hereof,
the Board of Directors shall not amend the Plan in the following respects
32
<PAGE>
without the consent of stockholders then sufficient to approve the Plan in
the first instance:
(i)To increase the maximum number of shares of Stock subject to
the Plan; or
(ii)To change the designation or class of persons eligible to
receive options or Rights under the Plan.
(b)Unless the Plan theretofore shall have been terminated, the Plan shall
terminate on March 31, 2000. No option or Right may be granted under any
suspension or after the termination of the Plan, and no amendment,
suspension or termination of the Plan shall, without the holder's consent,
alter or impair any rights or obligations under any option or Right
theretofore granted to him under the Plan.
16. GOVERNING LAW.
The Plan, such options and Rights as may be granted hereunder and all
related matters shall be governed by, and construed and enforced in
accordance with, the laws of the State of Arkansas from time to time
obtaining.
33
<PAGE>
AMENDMENT TO TYSON FOODS, INC.
AMENDED AND RESTATED
NONSTATUTORY STOCK OPTION PLAN
THIS AMENDMENT (the "Amendment") amends and modifies the Tyson Foods,
Inc. Amended and Restated Nonstatutory Stock Option Plan originally adopted
by the Board of Directors of Tyson Foods, Inc., a Delaware corporation (the
"Company) on December 17, 1982, as amended and restated effective September
5, 1987 and as further amended and restated effective November 18, 1994
(the "Plan"; any capitalized terms used but not defined in this Amendment
shall have the meanings ascribed thereto in the Plan).
WHEREAS, the Board of Directors of the Company, acting pursuant to a
unanimous written consent effective as of December 3, 1996, approved this
Amendment subject to the receipt of the consent of the stockholders of the
Company pursuant to the provisions of Paragraph 15 of the Plan;
WHEREAS, this Amendment was presented to and approved by the shareholders
of the Company at the Annual Meeting of Shareholders held on January 10,
1997;
NOW, THEREFORE, the Company hereby amends the Plan as follows:
1.Amendment. The first sentence of paragraph 2(a) of the Plan, which
currently reads as:
The total number of shares of Stock which either may be purchased
pursuant to the exercise of options granted under the Plan or
acquired pursuant to the exercise of Rights granted under the
Plan shall not exceed, in the aggregate, 5,500,000 shares (which
amount reflects all adjustments through November 18, 1994 and is
subject to future adjustment in accordance with paragraph 2(b))
(the "Total Plan Shares").
is hereby modified to read as follows:
The total number of shares of Stock which either may be purchased
pursuant to the exercise of options granted under the Plan or
acquired pursuant to the exercise of Rights granted under the
Plan shall not exceed, in the aggregate, 9,500,000 shares (which
amount reflects all adjustments through December 3, 1996, and is
subject to future adjustment in accordance with paragraph 2(b))
(the "Total Plan Shares").
The remainder of Paragraph 2(a) shall remain unchanged and in full force
and effect.
2.Effective Date. The effective date of this Amendment shall be January
10, 1997, subject to approval by the shareholders of the Company on such
date.
3.No Other Modifications. Except as expressly modified by this Amendment,
all other terms and conditions of the Plan shall remain in full force and
effect.
34
