<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 (S) 240.14a-11(c) or (S) 240.14a-12
Tyson Foods, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 12, 2001
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 12, 2001, at 10:00 a.m., local time, for the following
purposes:
1. To elect twelve members to the Board of Directors.
2. To approve the Tyson Foods, Inc. 2000 Stock Incentive Plan.
3. To consider and act upon a shareholder proposal recommending that the
Board of Directors adopt a workplace code of conduct to be reported to
shareholders by September 2001.
4. 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 28, 2000,
will be entitled to attend or vote at the Annual Meeting and any adjournments
or postponements thereof. A list of shareholders entitled to attend or vote at
the Annual Meeting will be maintained during the ten-day period preceding the
meeting at One East Center Street, Suite 204, Fayetteville, AR 72701.
To make it easier for you to vote, Internet and telephone voting is
available. The instructions attached to your proxy card describe how to use
these convenient services. Of course, if you prefer, you can vote by mail by
completing your proxy card and returning it in the enclosed postage-paid
envelope.
The Company's Proxy Statement is submitted herewith. The Annual Report for
the fiscal year ended September 30, 2000, is being mailed to shareholders
together with this Notice and Proxy Statement.
By Order of the Board of Directors
R. Read Hudson
Secretary
Springdale, Arkansas
December 8, 2000
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO VOTE AS SOON AS POSSIBLE
BY INTERNET, TELEPHONE OR MAIL 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 12, 2001
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Tyson Foods, Inc., a Delaware corporation (the "Company"). It is
for use only at the Annual Meeting of Shareholders ("Annual Meeting") to be
held at the Walton Arts Center, 495 West Dickson Street, Fayetteville,
Arkansas, on Friday, January 12, 2001, 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 8, 2000.
OUTSTANDING STOCK AND VOTING RIGHTS
As of September 30, 2000, the outstanding shares of the Company's capital
stock consisted of 121,899,309 shares of Class A Common Stock, $0.10 par value
("Class A Common Stock"), and 102,645,048 shares of Class B Common Stock,
$0.10 par value ("Class B Common Stock"). The holders of record of the shares
of Class A Common Stock and Class B Common Stock outstanding on November 28,
2000, 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 nominee(s) for whom you
are withholding the authority to vote by listing 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.
The enclosed form of proxy also provides a method for shareholders to
abstain from voting with respect to the proposals to approve (i) the Tyson
Foods, Inc. 2000 Stock Incentive Plan (the "Plan Proposal") and (ii) the
recommendation that the Board of Directors adopt a workplace code of conduct
(the "Shareholder Proposal;"
1
<PAGE>
the Plan Proposal and the Shareholder Proposal may sometimes hereinafter
collectively be referred to as the "Proposals"). By abstaining, shares would
not be voted either for or against either 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.
Brokers who hold shares in street name for customers who are beneficial
owners of such shares are prohibited from giving a proxy to vote such
customers' shares on "non-routine" matters in the absence of specific
instructions from such customers. This is commonly referred to as a "broker
non-vote." Broker non-votes are not relevant to the determination of quorum or
whether the proposal to elect directors has been approved. To the extent
deemed applicable to the Proposals, broker non-votes will be treated in the
same manner as abstentions for quorum and voting purposes (i.e. counted for
quorum purposes, but neither being voted for nor against the Proposals and,
therefore, having no effect on the outcome of the votes on the Proposals).
2
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of September 30, 2000
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>
Number of Shares Percent
Name and Address of Beneficial Owner Title of Class Beneficially Owned of Class
------------------------------------ -------------- ------------------ --------
<S> <C> <C> <C>
Don Tyson and Tyson Limited Class B Common Stock 102,598,560(1) 99.9
Partnership
2210 West Oaklawn Drive
Springdale, AR 72762-6999
Sanford C. Bernstein & Co., Inc. Class A Common Stock 11,750,340(2) 9.6
One North Lexington Avenue
White Plains, NY 10601-1785
</TABLE>
--------
(1) Includes 750,000 shares of Class B Common Stock owned of record by Don
Tyson, Senior Chairman of the Board of the Company, and 101,848,560 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 45.062 percentage
interest as a limited partner in the Partnership. Barbara A. Tyson, the
widow of Randal Tyson and a Director of the Company, 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, Chairman, President and Chief Executive Officer of the Company,
are contingent beneficiaries of such estate. The managing general partner
of the Partnership is Don Tyson. The other general partners are Leland E.
Tollett, a Director of the Company; Barbara Tyson; John H. Tyson; James B.
Blair and Harry C. Erwin, III. Don Tyson, as managing general partner, has
the exclusive right, subject to certain restrictions, to do all things on
behalf of the Partnership necessary to manage, conduct, control and
operate the Partnership's business, including the right to vote all shares
or other securities held by the Partnership, as well as the right to
mortgage, pledge or grant security interests in any assets of the
Partnership. The Partnership terminates December 31, 2040. Additionally,
the Partnership may be dissolved upon the occurrence of certain events,
including (i) a written determination by the managing general partner that
the projected future revenues of the Partnership will be insufficient to
enable payment of costs and expenses, or that such future revenues will be
such that continued operation of the Partnership will not be in the best
interest of the partners, (ii) an election to dissolve the Partnership by
the managing general partner that is approved by the affirmative vote of a
majority in percentage interest of all general partners, and (iii) the
sale of all or substantially all of the Partnership's assets and
properties. The withdrawal of the managing general partner or any other
general partner (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 200,000 shares of Class A Common Stock.
(2) Based solely on information obtained from a Form 13F filed by AXA
Financial, Inc. ("AXA") with the Securities and Exchange Commission on or
about November 13, 2000. Alliance Capital Management L.P., a subsidiary of
AXA, acquired beneficial ownership of 11,750,340 shares of Class A Common
Stock through its acquisition of the investment advisory assets of Sanford
C. Bernstein & Co., Inc. on October 2, 2000. The number of shares
beneficially owned as of October 31, 2000, as reported by AXA in its
Form 13F was 12,360,690 shares. The foregoing information has been
included solely in reliance upon, and without independent investigation
of, the disclosures contained in AXA's Form 13F.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of Class A Common Stock and Class B Common Stock, as of September
30, 2000, by the Company's directors, nominees for election as directors,
named executive officers and by all directors and executive officers as a
group:
<TABLE>
<CAPTION>
Shares Shares Percent of
of Class A Percent of of Class B Outstanding
Common Stock Outstanding Common Stock Class B Aggregate
Beneficially Class A Beneficially Common Voting
Name of Beneficial Owner Owned(1) Common Stock Owned(1) Stock Percentage
------------------------ ------------ ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
Don Tyson(2)(3)......... 278,197 * 102,598,560 99.9 89.4
Leland E. Tollett(4).... 3,184,024 2.6 *
Joe F. Starr(5)......... 2,033,833 1.7 *
Neely E. Cassady........ 1,232,862 1.0 *
Donald E. Wray.......... 790,258 * *
Gerald M. Johnston...... 739,347 * *
John H. Tyson(4)(5)..... 623,442 * *
Greg W. Lee............. 198,981 * *
Barbara A. Tyson(4)..... 160,682 * *
John S. Lea............. 94,842 * *
William W. Lovette...... 68,950 * *
Fred S.Vorsanger........ 33,000 * *
Shelby D. Massey........ 25,778 * *
Lloyd V. Hackley........ 11,018 * *
Jim Kever............... -0- * *
Barbara Allen........... -0- * *
David A. Jones.......... -0- * *
All Directors and
Executive Officers as a
Group (29 persons)..... 9,913,616 8.1 102,598,560 99.9 90.2
</TABLE>
--------
* 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 and Retirement Savings 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 200,000 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) Does not include any shares of Class A Common Stock and Class B Common
Stock owned of record by the Tyson Limited Partnership of which Leland E.
Tollett, John H. Tyson and Barbara Tyson have a general partnership
interest. See Footnote 1 to the Principal Shareholders table.
(5) Does not include 485,900 shares of Class A Common Stock held by the Tyson
Foundation, a nonprofit charitable organization. Joe F. Starr and John H.
Tyson are trustees of the Tyson Foundation and disclaim beneficial
ownership of all such shares.
4
<PAGE>
ELECTION OF DIRECTORS
The Board for the ensuing year is currently set at twelve members and may be
fixed from time to time by or in the manner provided in the Company's Second
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
twelve nominees has been chosen by the Board, and the Board recommends that
each be elected.
Don Tyson, 70, Senior Chairman of the Board, served as Chairman of the
Board until April 1995 when he was named Senior Chairman. Mr. Tyson served
as Chief Executive Officer until March 1991 and has been a member of the
Board since 1952.
John H. Tyson, 47, was named Chairman of the Board of Directors in 1998
and assumed responsibilities as President and Chief Executive Officer in
April 2000. He had served as Vice Chairman since 1997 and as President of
the Company's Beef and Pork division since 1993. Mr. Tyson has been a
member of the Board since 1984.
Joe F. Starr, 67, a private investor, served as a Vice President of the
Company until 1996. Mr. Starr has been a member of the Board since 1969.
Leland E. Tollett, 63, served as Chairman of the Board and Chief
Executive Officer from 1995 to 1998. An employee of the Company since 1959,
Mr. Tollett was President and Chief Executive Officer from 1991 to 1995.
Mr. Tollett has been a member of the Board since 1984.
Shelby Massey, 67, is a farmer and a private investor. He served as
Senior Vice Chairman of the Board from 1985 to 1988 and has been a member
of the Board since 1985.
Barbara A. Tyson, 51, is a Vice President of the Company. Ms. Tyson has
served in related capacities since 1988. Ms. Tyson has been a member of the
Board since 1988.
Lloyd V. Hackley, 60, is President and Chief Executive Officer of Lloyd
V. Hackley and Associates, Inc. He is a director of Branch Banking and
Trust Corporation headquartered in Winston-Salem, North Carolina. He was
President of the North Carolina Community College System from 1995 to 1997.
Mr. Hackley has been a member of the Board since 1992.
Donald E. Wray, 63, retired as President of the Company in March 2000
after 39 years with the Company in various capacities. He served as
President and Chief Operating Officer from 1995 to 1999 after serving as
Chief Operating Officer since 1991. Mr. Wray has been a member of the Board
since 1994.
Gerald M. Johnston, 58, a private investor, was Executive Vice President
of Finance for the Company from 1981 to 1996 when he retired and became a
consultant to the Company. He is a director of Fairfield Communities, Inc.
Mr. Johnston has been a member of the Board since 1996.
Jim Kever, 48, is a director of Quintiles Transnational and has served as
Chief Executive Officer of Envoy Corporation, a subsidiary of Quintiles,
since Envoy was acquired by Quintiles in March 1999. Mr. Kever served as
President and Co-Chief Executive Officer of Envoy from August 1995 until
March 1999 and as a director from Envoy's incorporation in August 1994
until March 1999. Mr. Kever is also a director of Transaction System
Architects, Inc., a supplier of electronic payment software products and
network integration solutions, and 3D Systems Corporation, a manufacturer
of technologically advanced solid imaging systems and prototype models. Mr.
Kever has been a member of the Board since 1999.
5
<PAGE>
David A. Jones, 51, has been Chairman and Chief Executive Officer of
Rayovac Corporation since 1996. Before joining Rayovac, Mr. Jones served as
President, Chief Executive Officer and Chairman of Thermoscan, Inc. and as
President, Chief Executive Officer and Chairman of Regina Company. He was
previously with Electrolux Corporation and General Electric Co. Mr. Jones
is also a director of SCI, Inc., an electronics manufacturer, and Spectrum
Brands, a specialty chemical manufacturer. Mr. Jones was elected to the
Board in August 2000.
Barbara Allen, 48, is President and Chief Operating Officer of Paladin
Resources and has served in those capacities since 1999. Before joining
Paladin Resources, Ms. Allen was President of Corporate Supplier Solutions
for Corporate Express from 1998 to 1999. Previously, she was with Quaker
Oats Co. for 23 years where she held several senior positions including
Executive Vice President of International Foods, Vice President of
Corporate Strategic Planning, President of the Frozen Foods Divison and
Vice President of Marketing. Ms. Allen is also a director of Maytag
Corporation and Chart House Enterprises. Ms. Allen was elected to the Board
in November 2000.
Each of the foregoing nominees is currently serving as a director of the
Company and, with the exception of Mr. Jones and Ms. Allen, were elected at
the last Annual Meeting of Shareholders. Mr. Jones was elected by the Board in
August 2000 and Ms. Allen was elected by the Board in November 2000. 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 ("SEC") 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 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 twelve 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 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.
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 (the "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. The Compensation Committee,
comprised of Fred S. Vorsanger, Shelby D. Massey and Neely E. Cassady, held
two meetings during fiscal 2000. The
6
<PAGE>
Compensation Committee has established a special subcommittee (the
"Compensation Subcommittee") thereof comprised of Fred S. Vorsanger and Neely
E. Cassady for the purpose of administering the Company's performance-based
compensation plans. The Compensation Subcommittee held two meetings during
fiscal 2000. On November 17, 2000 the Board elected Lloyd V. Hackley and
Barbara Allen to the Compensation Committee as replacements for Messrs.
Vorsanger and Cassady.
The Board has an audit committee (the "Audit Committee") which consists of
Fred S. Vorsanger, Neely E. Cassady, Lloyd V. Hackley, Jim Kever and David A.
Jones. See "Report of Audit Committee" contained herein. Each of these
individuals qualifies as an "independent" director under the current listing
standards of the New York Stock Exchange. The Audit Committee acts pursuant to
the Audit Committee Charter adopted by the Board of Directors on August 11,
2000, a copy of which is attached as Appendix "A" to this Proxy Statement. The
Audit Committee's primary function is to assist the Board in fulfilling its
oversight responsibilities by regular review of the Company's financial
information, systems of internal controls regarding finance, accounting, legal
compliance and ethics and auditing, accounting and financial reporting
processes in accordance with the policies established by the Board and
management. During fiscal 2000, the Audit Committee met four times. On
November 17, 2000, the Board elected Barbara Allen, an independent director,
to the Audit Committee. In fiscal 2001, the Audit Committee will consist of
Mr. Kever, Mr. Hackley, Mr. Jones and Ms. Allen.
The Board has a special committee (the "Special Committee") for the purpose
of overseeing and reviewing related party and other special transactions
between the Company and its directors, executive officers or their affiliates.
The Special Committee is comprised of Fred S. Vorsanger, Lloyd V. Hackley,
Shelby D. Massey and Neely E. Cassady. The Special Committee held two meetings
during fiscal 2000. On November 17, 2000, the Board elected Jim Kever and
David A. Jones to the Special Committee as replacements for Messrs. Vorsanger
and Cassady.
The Board held four regularly scheduled meetings in fiscal 2000. All current
directors attended at least 75% of the Board and committee meetings held
during fiscal year 2000 with the exception of Shelby D. Massey, who attended
two Board meetings and no committee meetings, David A. Jones, who was elected
in August 2000, and Barbara Allen, who was elected in November 2000.
7
<PAGE>
PROPOSAL TO APPROVE THE TYSON FOODS, INC.
2000 STOCK INCENTIVE PLAN
On August 11, 2000, the Board adopted the Tyson Foods, Inc. 2000 Stock
Incentive Plan (the "Plan") subject to approval of the shareholders of the
Company. At the Annual Meeting, shareholders will be asked to consider and
vote on the approval of the Plan. The Board believes that the granting of
stock options and other stock-based awards will assist the Company in its
efforts to attract and retain highly qualified persons to serve as directors,
officers, employees, consultants and other service providers and recommends
that the shareholders of the Company approve the Plan.
The Board has reserved 7,000,000 shares of Class A Common Stock for
issuance under awards that may be made under the Plan, subject to adjustment
as provided in the Plan.
Applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), restrict the Company's ability, in the absence of shareholder
approval, to grant incentive stock options under Code Section 421 and to claim
deductions which may otherwise be associated with the grant of nonqualified
options or other equity awards under Code Section 162(m). The Company is
seeking shareholder approval of the Plan to comply with these Code provisions,
as well as, to comply with New York Stock Exchange listing standards.
Terms of the Plan
Administration
The Plan will be administered by the Compensation Subcommittee. When
appointing members to the Compensation Subcommittee, the Board considers the
advisability of complying with the disinterested standards contained in both
Section 162(m) of the Code and Rule 16b-3 under the Securities Exchange Act of
1934, as amended. The Compensation Subcommittee will consist of Lloyd V.
Hackley and Barbara Allen. The Compensation Subcommittee has the authority to
grant awards under the Plan and to make all other determinations that it may
deem necessary or advisable for the administration of the Plan.
Awards
The Plan permits the Compensation Subcommittee to make awards of shares of
Class A Common Stock, awards of derivative securities related to the value of
Class A Common Stock and tax reimbursement payments to eligible persons. These
discretionary awards may be made on an individual basis or pursuant to a
program approved by the Compensation Subcommittee for the benefit of a group
of eligible persons. The Plan permits the Compensation Subcommittee to make
awards of a variety of equity-based incentives, including stock awards,
options to purchase shares of Class A Common Stock, stock appreciation rights,
dividend equivalent rights, performance unit awards and phantom shares
(collectively, "Stock Incentives").
The number of shares of Class A Common Stock as to which any Stock
Incentive is granted and to whom any Stock Incentive is granted will be
determined by the Compensation Subcommittee, subject to the provisions of the
Plan. Stock Incentives may be made exercisable or settled at the prices and
may be made forfeitable or terminable under the terms established by the
Compensation Subcommittee, to the extent not otherwise inconsistent with the
terms of the Plan. Stock Incentives generally are not transferable or
assignable during a holder's lifetime, subject to such terms as may be
established by the Compensation Subcommittee.
8
<PAGE>
Stock Incentives
Options. The Plan provides for the grant of incentive stock options and
nonqualified stock options. The Compensation Subcommittee will determine
whether an option is an incentive stock option or a nonqualified stock option
at the time the option is granted, and the option will be evidenced by a stock
incentive agreement. Options may be made exercisable pursuant to the terms
established by the Compensation Subcommittee, to the extent not otherwise
inconsistent with the terms of the Plan. No eligible employee may be granted
during any single calendar year rights to shares of Class A Common Stock under
options or stock appreciation rights which, in the aggregate, exceed 1,000,000
shares of Class A Common Stock.
The exercise price of an option shall be set forth in the applicable Stock
Incentive agreement. The exercise price of an incentive stock option may not
be less than the fair market value of the Class A Common Stock on the date of
the grant (nor less than 110% of the fair market value if the participant owns
more than 10% of the stock of the Company or any subsidiary). At the time an
incentive stock option is exercised, the Company will be entitled to place a
legend on the certificates representing the shares of Class A Common Stock
purchased pursuant to the option to identify them as shares of Class A Common
Stock purchased upon the exercise of an incentive stock option. Nonqualified
stock options may be made exercisable at a price equal to, less than or more
than the fair market value of the Class A Common Stock on the date that the
option is granted. The Compensation Subcommittee may permit an option exercise
price to be paid in cash or by the delivery of previously-owned shares of
Class A Common Stock, or to be satisfied through a cashless exercise executed
through a broker or by having a number of shares of Class A Common Stock
otherwise issuable at the time of exercise withheld. The Compensation
Subcommittee also may authorize financing by the Company to assist a
participant with payment of the exercise price.
The term of an option shall be specified in the applicable Stock Incentive
agreement. The term of an incentive stock option may not exceed ten years from
the date of grant; however, any incentive stock option granted to a
participant who owns more than 10% of the stock of the Company or any
subsidiary will not be exercisable after the expiration of five (5) years
after the date the option is granted.
Stock Appreciation Rights. Stock appreciation rights may be granted
separately or in connection with another Stock Incentive, and the Compensation
Subcommittee may provide that they are exercisable at the discretion of the
holder or that they will be paid at a specific time or times or upon the
occurrence or non-occurrence of events that may be specified in the applicable
Stock Incentive agreement. Stock appreciation rights may be settled in shares
of Class A Common Stock or in cash, according to terms established by the
Compensation Subcommittee with respect to any particular award.
Stock Awards. The Compensation Subcommittee may grant shares of Class A
Common Stock to a participant, subject to restrictions and conditions, if any,
as the Compensation Subcommittee shall determine.
Other Stock Incentives. Dividend equivalent rights, performance units and
phantom shares may be granted in numbers or units and subject to any
conditions and restrictions as determined by the Compensation Subcommittee and
will be payable in cash or shares of Class A Common Stock, as determined by
the Compensation Subcommittee.
Tax Reimbursement Payments
The Compensation Subcommittee may make cash tax reimbursement payments
designed to cover tax obligations of employees that result from the receipt or
exercise of a Stock Incentive.
9
<PAGE>
Termination of Stock Incentives
The terms of a particular Stock Incentive may provide that it terminates,
among other reasons, upon the holder's termination of employment or other
status with respect to the Company or any affiliate of the Company, upon a
specified date, upon the holder's death or disability, or upon the occurrence
of a change in control of the Company; provided that, the terms of any
incentive stock option will provide that all unexercised options will expire,
terminate and become unexercisable no later than three months following
termination of employment for reasons other than death or disability and one
year following the holder's death or disability. Stock Incentives may include
exercise, conversion or settlement rights to a holder's estate or personal
representative in the event of the holder's death or disability. At the
Compensation Subcommittee's discretion, Stock Incentives that are subject to
termination may be canceled, accelerated, paid or continued, subject to the
terms of the applicable agreement reflecting the terms of a Stock Incentive
and to the provisions of the Plan.
Certain Reorganizations
The number of shares of Class A Common Stock reserved for issuance in
connection with the grant or settlement of a Stock Incentive or to which a
Stock Incentive is subject, as the case may be, and the exercise price of an
option are subject to adjustment in the event of any recapitalization of the
Company or similar event which occurs without the receipt of consideration.
In the event of certain corporate reorganizations, Stock Incentives may be
substituted, canceled, accelerated, cashed-out or otherwise adjusted by the
Compensation Subcommittee, provided that any adjustment is not inconsistent
with the terms of the Plan or any agreement reflecting the terms of a Stock
Incentive. The Company may also use the Plan to assume obligations previously
incurred in favor of persons who are eligible to participate under the Plan.
Amendments or Termination
Although the Plan may be amended or terminated by the Board without
shareholder approval, the Board also may condition any amendment upon
shareholder approval if shareholder approval is deemed necessary or
appropriate in consideration of tax, securities or other laws. No amendment or
termination by the Board may adversely affect the rights of a holder of a
Stock Incentive without the holder's consent.
Benefits to Named Executive Officers and Others
As of November 30, 2000, no Stock Incentives have been granted under the
Plan. In addition, the Compensation Subcommittee has not yet made any
determination as to which eligible participants will be granted Stock
Incentives under the Plan in the future.
Federal Income Tax Consequences
The following discussion outlines generally the federal income tax
consequences of participation in the Plan. Individual circumstances may vary
and each participant should rely on his or her own tax counsel for advice
regarding federal income tax treatment under the Plan.
10
<PAGE>
Incentive Stock Options
A participant who exercises an incentive stock option will not be taxed at
the time he or she exercises his or her option or a portion thereof. Instead,
the participant will be taxed at the time he or she sells the shares of Class
A Common Stock purchased pursuant to the incentive stock option. The
participant will be taxed on the difference between the price he or she paid
for the Class A Common Stock and the amount for which he or she sells the
Class A Common Stock. If the participant does not sell the shares of Class A
Common Stock prior to two years from the date of grant of the incentive stock
option and one year from the date the stock is transferred to him or her, any
subsequent gain on sale of the shares will be capital gain and the Company
will not receive a corresponding deduction. If the participant sells the
shares of stock at a gain prior to that time, the difference between the
amount the participant paid for the Class A Common Stock and the lesser of
fair market value on the date of exercise or the amount for which the stock is
sold will be taxed as ordinary income, and the Company will receive a
corresponding deduction. If the participant sells the shares of Class A Common
Stock for less than the amount he or she paid for the stock prior to the one-
or two-year period indicated, no amount will be taxed as ordinary income and
the loss will be taxed as a capital loss. Exercise of an incentive stock
option may subject a participant to, or increase a participant's liability
for, the alternative minimum tax.
Nonqualified Options
A participant will not recognize income upon the grant of a nonqualified
option or at any time prior to the exercise of the option or a portion
thereof. At the time the participant exercises a nonqualified option or
portion thereof, he or she will recognize compensation taxable as ordinary
income in an amount equal to the excess of the fair market value of the Class
A Common Stock on the date the option is exercised over the price paid for the
stock, and the Company will then be entitled to a corresponding deduction.
Depending upon the time period shares of Class A Common Stock are held
after exercise, the sale or other taxable disposition of shares acquired
through the exercise of a nonqualified option generally will result in a
short- or long-term capital gain or loss equal to the difference between the
amount realized on such disposition and the fair market value of such shares
when the nonqualified option was exercised.
Special rules apply to a participant who exercises a nonqualified option by
paying the exercise price, in whole or in part, by the transfer of shares of
Class A Common Stock to the Company.
Other Stock Incentives
A participant will not recognize income upon the grant of a stock
appreciation right, dividend equivalent right, performance unit award or
phantom share (collectively, the "Other Equity Incentives"). Generally, at the
time a participant receives payment under any Other Equity Incentive, he or
she will recognize compensation taxable as ordinary income in an amount equal
to the cash or fair market value of the Class A Common Stock received, and the
Company will then be entitled to a corresponding deduction.
A participant will not be taxed upon the grant of a stock award if such
award is not transferable by the participant or is subject to a "substantial
risk of forfeiture," as defined in the Code. When the shares of Class A Common
Stock that are subject to the stock award become transferable and are no
longer subject to a substantial risk of forfeiture, however, the participant
will recognize compensation taxable as ordinary income in an amount equal to
the fair market value of the stock subject to the award, less any amount paid
for such stock, and the Company will then be entitled to a corresponding
deduction. If a participant so elects at the time of
11
<PAGE>
receipt of a stock award, he or she may include the fair market value of the
stock subject to the award, less any amount paid for such stock, in income at
that time and the Company will also be entitled to a corresponding deduction
at that time.
Shareholder Approval
The Board seeks shareholder approval because approval is required under the
Code as a condition to incentive stock option treatment and will maximize the
potential for deductions associated with any nonqualified options and stock
appreciation rights granted under the Plan. The Board is also seeking
shareholder approval to ensure compliance with New York Stock Exchange listing
standards.
Board Recommendation
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PLAN PROPOSAL.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THE PLAN
PROPOSAL UNLESS SHAREHOLDERS SPECIFY A CONTRARY VOTE.
Vote Required
Approval of the Plan Proposal requires the affirmative vote of a majority
of the votes cast at the Annual Meeting with the holders of shares of Class A
Common Stock and Class B Common Stock voting together as a single class.
12
<PAGE>
SHAREHOLDER PROPOSAL
The following Shareholder Proposal was submitted by the General Board of
Pension and Health Benefits of the United Methodist Church ("GBPHB"), 1201
East Davis Street, Evanston, Illinois 60201-4118 (who has notified the Company
that it was the beneficial owner of 132,700 shares of Class A Common Stock as
of August 1, 2000) for consideration by the shareholders of the Company:
"Whereas: Consumers and shareholders are increasingly concerned about the
conditions under which the goods they purchase and the food they eat are
produced. Although the poultry industry is a profitable and important
industry, and is one of the fastest growing industries in the U.S., poultry
workers are low-wage workers, living in areas where employment in the local
processing plant and related operations is often the only work available.
Many poultry workers are Latino immigrants, who are afraid to raise
workplace issues to management because of threats, including firing, and are
often unaware of their labor rights under the law. These workers are among the
poorest of the poor in their geographic areas. We believe poultry workers must
be paid living wages with family benefits and must be able to organize a union
without fear of reprisals.
The U.S. Department of Labor, in a 1998 investigation of the poultry
industry, found that more than 60 percent of the 51 plants they investigated
had violated wage and hour laws.
At a Tyson plant in Corydon, Indiana in 1999, more than 250 poultry workers
were forced to strike by the nation's largest and most profitable poultry
company when management demanded that paid breaks for workers be eliminated,
overtime rates be reduced, and contract protections be gutted.
As shareholders in the company, we are concerned by reports of labor
violations in Tyson plants. We believe that publicity related to workplace
violations has an adverse impact on our company's image and negatively affect
shareholder value.
As a national poultry industry leader, Tyson should take appropriate steps
to implement and enforce policies that protect workers' rights and prevent
costly lawsuits and negative publicity. Companies in other industries have
developed and implemented codes of conduct to ensure that worker rights are
respected and abusive workplace conditions are eliminated.
Resolved: The shareholders request that the Board of Directors adopt a
workplace code of conduct to be reported to shareholders by September 2001.
Supporting Statement
The code of conduct should be based on the International Labor
Organization's (ILO) Conventions on workplace rights and include the following
principles:
1. All workers have the right to form and join trade unions and to bargain
collectively (ILO Conventions 87 and 98).
2. Workers' representatives shall not be the subject of discrimination (ILO
Convention 135).
3. There shall be no discrimination or intimidation in employment (ILO
Conventions 100 and 111).
13
<PAGE>
4. The company shall establish consistent standards for workers' health and
safety, and promote a fair and dignified quality of life for workers and their
communities."
The foregoing is the verbatim submission of GBPHB. All statements therein
are the sole responsibility of GBPHB, and neither the management of the
Company nor the Board have verified their accuracy.
Board Of Directors' Statement
In Opposition To Shareholder Proposal
The Company is committed to operating in full compliance with all
applicable laws and has adopted and implemented a code of conduct regarding a
variety of matters, including fair treatment of employees. The Company has
also implemented a substantial and ongoing education effort to assure that all
team members understand both the spirit and letter of these requirements and
has established a helpline so that employees can raise concerns and have them
promptly addressed with confidentiality, care and respect. Your Board of
Directors therefore does not believe that the code of conduct suggested in the
Shareholder Proposal is necessary and recommends a vote against the
Shareholder Proposal.
Board Recommendation
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE
AGAINST THE SHAREHOLDER PROPOSAL.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED AGAINST THE
SHAREHOLDER PROPOSAL UNLESS SHAREHOLDERS SPECIFY A CONTRARY VOTE.
Vote Required
Approval of the Shareholder Proposal requires the affirmative vote of a
majority of the votes cast at the Annual Meeting with the holders of shares of
Class A Common Stock and Class B Common Stock voting together as a single
class.
14
<PAGE>
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, President 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
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
---------------------- ---------------------
Restricted All Other
Name and Principal Other Annual Options Stock Compensation
Position Year Salary Bonus Compensation (1) (1) (2,3,4)
------------------ ---- -------- -------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Don Tyson, 2000 $600,000 $200,000 $344,001(5) -0- -0- $135,000
Senior Chairman of the 1999 $600,000 $310,000 $350,266(5) -0- -0- $143,400
Board 1998 $600,000 $ 86,656 $437,444(5) -0- -0- $170,875
John H. Tyson, 2000 $650,000 $ -0- $132,886(6) -0- $483,750 $108,000
Chairman, President and 1999 $650,000 $375,000 $124,587(6) 150,000 -0- $102,786
Chief Executive Officer 1998 $250,832 $170,000 $ 75,389(6) -0- -0- $ 83,139
Greg W. Lee, 2000 $412,500 $110,000 N/A -0- $322,500 $ 38,077
Chief Operating Officer 1999 $379,167 $150,000 N/A 80,000 -0- $ 37,063
1998 $331,089 $120,000 N/A -0- -0- $ 34,847
William W. Lovette, 2000 $305,000 $ 63,500 N/A -0- $215,000 $ 11,482
President, Food Service 1999 $264,583 $ 80,000 N/A 60,000 -0- $ 12,674
Group 1998 $255,705 $ 80,000 N/A -0- -0- $ 12,273
John S. Lea, Executive 2000 $285,000 $ 65,000 N/A -0- $215,000
Vice President and 1999 $265,833 $ 85,000 N/A 60,000 -0- $ 24,666
Chief 1998 $258,955 $ 85,000 N/A -0- -0- $ 24,150
Marketing Officer $ 22,836
</TABLE>
--------
(1) On May 4, 2000, the Company canceled option grants to Messrs. John H.
Tyson, Lee, Lovette and Lea for 150,000, 80,000, 60,000 and 60,000 shares,
respectively, and awarded Messrs. John H. Tyson, Lee, Lovette and Lea
45,000, 30,000, 20,000 and 20,000 restricted shares, respectively, of
Class A Common Stock under the Company's Restricted Stock Bonus Plan. (See
"Report of the Compensation Committee--Stock-Based Compensation"). The
restriction expires over periods through December 1, 2003. The amounts set
forth above are based on the $10.75 market value of Class A Common Stock
on May 4, 2000.
(2) In 2000, "All Other Compensation" includes the following for Messrs. Don
Tyson, John H. Tyson, Lee, Lovette and Lea: (i) Company matching
contributions to the Employee Stock Purchase Plan of $30,000; $32,500;
$20,625; $3,050 and $14,250 for each named executive respectively; (ii)
Company contributions to the Executive Savings Plan of $-0-; $1,700;
$10,652; $1,632 and $3,616 on behalf of each named executive,
respectively; and (iii) Company contributions to the Retirement Savings
Plan of $-0-; $6,800; $6,800; $6,800 and $6,800 on behalf of each named
executive, respectively, to match a portion of 2000 pretax elective
deferral contributions (included under salary) made by each person to such
plans. Also includes the following for Mr. Don Tyson and Mr. John H.
Tyson, $105,000 and $67,000 respectively, which represents the dollar
value benefit of premium payments under split dollar life insurance
policies on Mr. Don Tyson and Mr. John H. Tyson for which the Company will
be reimbursed for premiums paid.
15
<PAGE>
(3) In 1999, "All Other Compensation" includes the following for Messrs. Don
Tyson, John H. Tyson, Lee, Lovette and Lea: (i) Company matching
contributions to the Employee Stock Purchase Plan of $30,000; $32,500;
$18,958; $2,646 and $13,292 for each named executive respectively; (ii)
Company contributions to the Executive Savings Plan of $8,400; $7,825;
$11,705; $3,628 and $4,458 on behalf of each named executive,
respectively; and (iii) Company contributions to the Retirement Savings
Plan of $-0-; $6,400; $6,400; $6,400 and $6,400 on behalf of each named
executive, respectively, to match a portion of 1999 pretax elective
deferral contributions (included under salary) made by each person to such
plans. Also includes the following for Mr. Don Tyson and Mr. John H.
Tyson, $105,000 and $56,061 respectively, which represents the dollar
value benefit of premium payments under split dollar life insurance
policies on Mr. Don Tyson and Mr. John H. Tyson for which the Company will
be reimbursed for premiums paid.
(4) In 1998, "All Other Compensation" includes the following for Messrs. Don
Tyson, John H. Tyson, Lee, Lovette and Lea: (i) Company matching
contributions to the Employee Stock Purchase Plan of $30,000; $12,542;
$16,554; $2,349 and $11,894 for each named executive, respectively; (ii)
Company contributions to the Executive Savings Plan of $29,475; $8,136;
$11,893; $3,524 and $4,542 on behalf of each named executive,
respectively; and (iii) Company contributions to the Retirement Savings
Plan of $6,400; $6,400; $6,400; $6,400 and $6,400 on behalf of each named
executive, respectively, to match a portion of 1998 pretax elective
deferral contributions (included under salary) made by each person to such
plans. Also includes the following for Mr. Don Tyson and Mr. John H.
Tyson, $105,000 and $56,061 respectively, which represents the dollar
value benefit of premium payments under split dollar life insurance
policies on Mr. Don Tyson and Mr. John H. Tyson for which the Company will
be reimbursed for premiums paid.
(5) In 2000, "Other Annual Compensation" for Mr. Don Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $191,652 and $133,457, respectively. In 1999,
"Other Annual Compensation" for Mr. Don Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $193,082 and $134,453, respectively. In 1998,
"Other Annual Compensation" for Mr. Don Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $235,800 and $164,200, respectively.
(6) In 2000, "Other Annual Compensation" for Mr. John H. Tyson includes travel
and entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $62,928 and $58,203, respectively. In 1999,
"Other Annual Compensation" for Mr. John H. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $58,701 and $54,294, respectively. In 1998,
"Other Annual Compensation" for Mr. John H. Tyson includes travel and
entertainment costs and amounts reimbursed for estimated income tax
liability related thereto of $33,453 and $30,942, respectively.
16
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executives concerning unexercised options held as of the end of the fiscal
year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at FY-end In-the-Money Options
Shares Unexercised at FY-end(1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Don Tyson............... -- -- -- -- -- --
John H. Tyson........... -- -- 42,000 51,750 -- --
Greg W. Lee............. -- -- 47,250 72,750 -- --
William W. Lovette...... -- -- 31,410 52,740 -- --
John S. Lea............. -- -- 38,040 52,110 -- --
</TABLE>
--------
(1) No unexercised In-the-Money Options were in existence at September 30,
2000.
Director Compensation
Neely E. Cassady, Fred S. Vorsanger, Lloyd V. Hackley, Shelby D. Massey, Joe
F. Starr, Jim Kever, David A. Jones and Barbara Allen, outside directors
serving on the Board, receive an annual retainer of $30,000, while Don Tyson,
John H. Tyson, Leland E. Tollett, Barbara A. Tyson, Donald E. Wray and Gerald
M. Johnston, directors who are also employees or consultants of the Company,
receive $2,500 per regular quarterly meeting. Outside directors are
compensated at the rate of $1,000 per day for time spent on board-related
activities.
Arrangements Upon Termination of Employment
The Company and Don Tyson executed an employment contract on August 1, 1997.
This contract currently provides for his active employment through December
31, 2000, and his employment thereunder is automatically extended for
successive one year periods thereafter, unless terminated by either the
Company or Mr. Tyson upon proper notice. The annual salary under this contract
is a minimum of $600,000 per annum. If Mr. Tyson becomes disabled while
serving as an employee of the Company, he would be entitled to an annual
salary during the period of such disability in an amount equal to one-half of
his average total compensation (salary, bonuses and payments relating to
travel and entertainment) (the "Average Annual Compensation") for the three
years immediately prior to the date of his disability. In the event of his
death while serving as an 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 Compensation for the three years immediately prior to the
date of his death, or (ii) if Mr. Tyson dies while receiving disability
payments, the amount of his annual disability benefits. The death and
disability benefits are funded by life insurance paid for by the Company of
which it is also the sole beneficiary. Upon Mr. Tyson's retirement from active
employment, he will receive, for the remainder of his life, annual
compensation for certain advisory services he has agreed to perform in an
amount equal to his disability benefits, calculated from the date of his
retirement. The contract provides that the Company may not merge or
consolidate with any other organization unless such organization expressly
assumes the duties of the Company set forth in the contract. Accordingly, the
contract could have the effect of deterring attempts to acquire control of the
Company which involve such transactions and are opposed by Mr. Tyson.
17
<PAGE>
The Company and Wayne Britt, who retired as President and Chief Executive
Officer in April 2000, have entered into a contract which provides that he
will continue to furnish advisory services to the Company for a period of up
to seven years following the date of his retirement. In consideration for his
advisory services, Mr. Britt will receive $200,000 for each of the first three
years and $100,000 for each of the next four years. The contract also provides
for continued vesting of outstanding stock options and continuation of health
benefits. In the event of Mr. Britt's death, (i) the above described benefits
will be paid to his surviving spouse until her death at which time all
benefits shall cease and (ii) all unexercised stock options issued to Mr.
Britt will be purchased by the Company based upon the value of such options on
the business day immediately succeeding his death. No benefits will be payable
under the contract in the event he accepts employment with any competitor of
the Company.
18
<PAGE>
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee was comprised during fiscal 2000 of Messrs.
Shelby D. Massey, Fred S. Vorsanger and Neely E. Cassady. The Compensation
Committee oversees the administration of the Company's employee benefit plans
and establishes policies relating to compensation of employees. All decisions
by the Compensation Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board, except for decisions
relating to 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 the Compensation Subcommittee, comprised of Messrs. Vorsanger and Cassady
during fiscal 2000, for the purpose of administering awards under the
Company's performance-based compensation plans as required by Section 162(m)
of the Code.
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
2000.
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 (i) bonuses based upon a "balanced
scorecard" management approach, (ii) equity-based compensation and (iii)
incentive and deferred compensation.
Under the "balanced scorecard" management approach, performance is measured
based upon the achievement of corporate and divisional goals. Accordingly, in
years in which the corporate and divisional goals are achieved or exceeded,
executive compensation tends to be higher than in years in which goals are not
achieved or exceeded. 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 Section 162(m) 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." Section 162(m) 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, it is intended that the Tyson Foods, Inc. 2000 Stock
Incentive Plan will take advantage of an exemption from Section 162(m) for
stock option grants.
Performance Measures
In evaluating annual executive compensation, the Compensation Committee
subjectively considers a number of factors including earnings per share and
return on invested capital. These factors are compared with problems and
advantages (both external and internal) that are unique to the industry,
performance in prior years and performance of other companies in the industry.
In fiscal 2000, approximately 90% of the Company's revenues were 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
19
<PAGE>
to evaluate management performance. Therefore, the Company compared its
performance during fiscal 2000 against a peer industry group currently
consisting of Cagle's, Inc., Pilgrim's Pride Corporation, Sanderson Farms,
Inc., and WLR Foods, Inc. Although there are other producers of poultry and
poultry products, the Compensation Committee believes that the percentage of
poultry sales to total sales of the foregoing group more closely represents
that of the Company.
Fiscal 2000 Compensation
For fiscal 2000, the Company's executive compensation program consisted of
(i) base salary, adjusted from the prior year, (ii) cash bonuses, (iii)
matching contributions to incentive and deferred compensation plans, (iv)
contributions under the Company's broad-based Employee Stock Purchase Plan and
Retirement Savings Plan which are fixed as a percentage of employee
participant contributions, and (v) grants of restricted stock under the
Company's Restricted Stock Bonus Plan.
Base Salary
Executives' base salaries are reviewed periodically to determine if such
salaries fall within the range of those persons holding comparably responsible
positions at other companies. 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 Compensation
Committee believes that the base salaries of the Company's executive officers
as a whole are comparable with the base salaries of other persons similarly
situated.
Cash Bonuses
The Company instituted a new bonus plan for fiscal year 2000. The bonus plan
is based upon a "balanced scorecard" management approach. Under this approach,
division scorecards, which relate to the specific operations and goals of each
division, and a corporate scorecard, which better reflects corporate targets
and key business objectives, were developed. The primary objective of this new
bonus plan is to provide management a clearer connection between business
results and individual rewards. Under this bonus plan, management will be
rewarded on a scale of targeted bonuses based upon corporate and divisional
achievement of goals together with an additional discretionary component.
Fiscal 2000 was a year of extreme challenges for the Company. Oversupply in
the domestic chicken market during the fiscal year presented significant
challenges for management and adversely affected financial results and the
ability of the Company to achieve its performance goals. However, the Company
continued to grow its core value-added business and reduced its inventories.
The Company's cash flow allowed it to reduce debt by $262 million and buy back
$69 million of its stock. After balancing the Company's performance,
challenges and achievements in fiscal 2000 with the importance of rewarding
and retaining a sound management team for the future, the Compensation
Committee, upon the advice and recommendation of the Chairman, President and
the Chief Executive Officer, determined to award, on a subjective basis, the
discretionary component of targeted bonuses.
Stock-Based Compensation
The Compensation 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 Compensation Committee believes that stock options and other
equity-based compensation are an effective incentive for executives and
managers to create value for shareholders since
20
<PAGE>
the value of such compensation bears a direct relationship to appreciation in
the Company's stock price. The determination of whether to grant stock options
or other equity based compensation, whether on an aggregate or individual
basis, has been delegated to and is in the discretion of the Compensation
Subcommittee. In making such determination, the Compensation Subcommittee
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 grants in prior years,
individual performance and potential contribution to the Company. Based upon
these factors and the recommendation of the Chairman, President and Chief
Executive Officer, the Compensation Subcommittee, on May 4, 2000, canceled
approximately 4.3 million option shares and awarded approximately 1 million
restricted shares of Class A Common Stock to executive officers and managers
under the Company's Restricted Stock Bonus Plan. The restriction expires over
periods through December 1, 2003. The Committee did not award any options
during fiscal 2000.
Senior Chairman and Chairman, President and CEO Compensation
The general approach used in setting the base compensation for Don Tyson,
the Company's Senior Chairman, and John H. Tyson, the Company's Chairman,
President and Chief Executive Officer, has been to provide compensation which
is comparable and competitive with that of other companies of similar size,
while encouraging and rewarding corporate performance in line with the
interests of shareholders.
Effective fiscal 1995, the Compensation Subcommittee (with the approval of
the shareholders of the Company) adopted the Senior Executive Performance
Bonus Plan to comply with the provisions of Section 162(m). The performance-
based plan provides that participants thereunder 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 Compensation Subcommittee
retains full discretion to reduce or eliminate bonus payments otherwise
payable under the Senior Executive Performance Bonus Plan.
The only participants under the Senior Executive Performance Bonus Plan
during fiscal year 2000 were Don Tyson, John H. Tyson and Wayne Britt, who
retired in April 2000. Based upon Messrs. Don Tyson's, John H. Tyson's and
Wayne Britt's pro-rata percentage of the bonus pool, the Compensation
Subcommittee has determined that they would have been eligible for a cash
bonus in fiscal 2000 of $1,290,092, $703,687 and $351,843, respectively. Based
in part on such eligibility, the Compensation Subcommittee awarded Messrs. Don
Tyson, John H. Tyson and Wayne Britt bonuses of $200,000, $-0- and $-0-,
respectively.
Summary
The Compensation 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 Compensation Committee believes that compensation
levels during fiscal 2000 adequately reflect the Company's compensation goals
and policies.
Fred S. Vorsanger*
Neely E. Cassady*
Shelby D. Massey
*Members of Compensation Subcommittee
21
<PAGE>
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed with management the Company's
audited financial statements as of and for the fiscal year ended September 30,
2000. The Committee also has discussed with the independent auditors for the
Company the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, as amended. The
Committee has received the written disclosures and the letter from the
independent auditors for the Company required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees, as amended,
and has discussed with the independent auditors that firm's independence from
management and the Company.
Based on the review and discussions referred to in the above paragraph, the
Committee recommends to the Board of Directors that the year-end audited
financial statements be included in the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 2000 for filing with the Securities
and Exchange Commission.
Jim Kever, Chairman
Fred S. Vorsanger
Neely E. Cassady
Lloyd V. Hackley
David A. Jones
22
<PAGE>
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total returns
for the Company, the S&P Foods 500 Index, the S&P 500 Index and an index of
peer companies selected by the Company.
[GRAPH]
INDEXED RETURNS
Base
Period Years Ending
Company Name/Index Sep 95 Sep 96 Sep 97 Sep 98 Sep 99 Sep 00
------------------------------------------------------------------------------
TYSON FOODS INC - CLA 100 99.80 132.07 112.60 93.69 57.83
S&P 500 INDEX 100 120.33 169.00 184.29 235.53 266.82
FOODS-500 100 123.42 164.55 174.71 168.01 159.20
PEER GROUP 100 102.49 142.32 160.45 115.64 108.85
Peer Group Companies: Cagle's Inc. - CLA, Golden Poultry Co Inc (Acquired
by Gold Kist Inc. 10/97), Hudson Foods Inc - CLA (Acquired by Tyson Foods
Inc 2/98),Pilgrims Pride Corp, Sanderson Farms Inc, WRL Foods Inc
----------------
Source: S&P Compustat Services, Inc.
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, the S&P Foods 500 Index and the S&P 500 Index is based on the
stock price or composite index at the end of fiscal 1995. The Company has for
the first time included a comparison with the S&P Foods 500 Index. In future
years the Company will discontinue the comparison with the broader-based S&P
500 Index in favor of the S&P Foods 500 Index. Because the S&P Foods 500 Index
is comprised of participants in the food industry, the Company believes that a
comparison to that index is more appropriate and meaningful.
The above graph compares the performance of the Company with that of the S&P
Foods 500 Index, the S&P 500 Index and a group of peer companies with the
investment weighted on market capitalization. Companies in the peer group are
as follows: Cagle's, Inc., Golden Poultry Company, Inc., Hudson Foods, Inc.,
Pilgrim's Pride Corporation, Sanderson Farms, Inc., and WLR Foods, Inc.;
however, 1998, 1999 and 2000 do not include Golden Poultry Company, Inc. which
was acquired by Gold Kist, Inc. in October 1997, and Hudson Foods, Inc., which
was acquired by the Company in January 1998. It has also been announced that
Pilgrim's Pride Corporation will acquire WLR Foods, Inc. in January 2001.
These companies were approved by the Compensation Committee.
23
<PAGE>
CERTAIN TRANSACTIONS
The Company has historically engaged in lease agreements and other
transactions with various of its executive officers, directors and their
affiliates. The following summarizes such transactions in excess of $60,000 to
which the Company was a party during fiscal 2000. The Company anticipates that
it will continue to engage in similar transactions with such persons in the
future. All new and any renewed related party transactions are reviewed by the
Special Committee.
Loans
During fiscal 2000, other than for ordinary travel and expense payments, the
Company has made no loans or advances to any of its executive officers,
directors or affiliates.
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 executive
officers, have agreed to build swine or poultry facilities designed to meet
the Company's particular requirements. These facilities are generally leased
for terms not exceeding five years 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 2000, the Company leased certain farms from the following
with aggregate lease payments as follows: (i) Don Tyson, $587,970; (ii) a
partnership of which John H. Tyson and the Estate of Randal Tyson are
partners, $299,558; (iii) entities in which Joe F. Starr and the children of
Don Tyson, including John H. Tyson, are partners or owners, $995,968; (iv) the
Tyson Children Partnership, of which John H. Tyson is a partner, $540,000; (v)
Estate of Randal Tyson, $107,092; (vi) Estates of John and Helen Tyson, of
which Don Tyson is executor, $30,000; (vii) Leland E. Tollett, $216,898;
(viii) certain entities controlled by Joe F. Starr, $93,133; and (ix) Gerald
M. Johnston, $280,726.
2. The Company has an aircraft operation agreement with the Estates of John
and Helen Tyson on a month-to-month basis with aggregate payments of $230,592
for fiscal 2000.
3. During fiscal 2000, the Company had a contract for swine growout services
with a partnership in which Gerald M. Johnston and Donald E. Wray are among
the partners with aggregate payments of $140,952.
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 $624,077 during fiscal 2000.
5. Certain persons, including some executive 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 2000, the purchases from the Company of the
above-enumerated items, which were at fair market value, by such persons were:
Don Tyson, $6,602,549; Joe F. Starr, $1,887,174; Barbara A. Tyson, $741,800;
and John H. Tyson, $1,683,967.
24
<PAGE>
6. During fiscal 2000, the Company had contracts for poultry growout
services with (i) a partnership in which Gerald M. Johnston and Donald E. Wray
are among the partners with aggregate payments of $129,011; and (ii) an entity
owned by Gerald M. Johnston with aggregate payments of $82,308.
7. The Company previously entered into an agreement, which was amended
effective October 1, 1997, 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 $2,776,045 for
fiscal 2000 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
$1,907,255 for fiscal 2000 pursuant to such agreement.
8. During fiscal 2000, the Company leased office and warehouse space from
entities in which Joe F. Starr and the children of Don Tyson, including John
H. Tyson, are partners or owners, with aggregate lease payments of $186,000.
9. Certain unimproved real property was sold by the Company in June 2000 to
an entity controlled by the daughter and son-in-law of the Senior Chairman of
the Board for $5,198,000. The purchase price was in excess of the market value
as determined by a current independent appraisal.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
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 SEC.
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 except that. Joe F. Starr filed a Form 4 Statement of
Change in Beneficial Ownership 3 days late for the month of February 2000 to
report a purchase of Class A Common Stock.
AUDITORS TO BE PRESENT
A representative of Ernst & Young LLP, the Company's auditors for fiscal
2000 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 2002 Annual
Meeting of Shareholders (the "2002 Annual Meeting") must be received by the
Company on or before August 11, 2001, 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.
Additionally, the Company's bylaws provide that for a shareholder proposal
to be brought before and considered at an annual meeting by a shareholder
proponent (the "Proponent"), such Proponent must provide,
25
<PAGE>
deliver or mail notice thereof to the Secretary of the Company at the
principal executive office of the Company (and the Secretary must receive such
notice) not less than 75 days nor more than 100 days prior to the date of such
annual meeting. For such provision to be effective, the Company must have
provided notice to shareholders, or otherwise publicly disclose, the date of
the annual meeting at least 85 days in advance thereof. If no notice or public
disclosure is made by the Company within that time frame, the Proponent's
notice to be timely received must be received not later than the close of
business on the tenth day following the day on which notice of the meeting is
actually mailed to shareholders or public disclosure of the meeting date is
actually made. The actual date of the Company's 2002 Annual Meeting has not
yet been determined. The Company anticipates that public disclosure of the
date of the 2002 Annual Meeting will be made in the Company's Quarterly Report
on Form 10-Q for the third quarter of fiscal 2001, which report will be filed
with the Securities and Exchange Commission in August 2001.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made by executive officers, directors and employees of the Company
personally or by mail, telephone, telegraph or other similar means of
communication. Solicitation by such persons will be made on a part-time basis
and no special compensation other than reimbursement of actual expenses
incurred in connection with such solicitation will be paid.
ADDITIONAL INFORMATION AVAILABLE
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, THE COMPANY WILL FURNISH A COPY OF
THE COMPANY'S 2000 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
28, 2000, 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 VOTE BY
INTERNET, TELEPHONE OR BY MAIL. TO VOTE BY MAIL, 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
R. Read Hudson
Secretary
December 8, 2000
26
<PAGE>
APPENDIX "A"
CHARTER
of the
AUDIT COMMITTEE
of the
BOARD of DIRECTORS of TYSON FOODS, INC.
I. PURPOSE
The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors of Tyson Foods, Inc. (the "Company") in fulfilling its
oversight responsibilities (except where such role has been specifically
delegated to another standing committee of the Board of Directors) by
reviewing (a) the financial reports and other financial information provided
by the Company to shareholders, potential shareholders, and the investment
community; (b) the Company's systems of internal controls regarding finance
and accounting that management and the Board of Directors have established;
and (c) the Company's auditing, accounting and financial reporting processes
in general. Consistent with this function, the Committee shall encourage
continuous improvement of, and foster adherence to, the Company's policies,
procedures and practices at all levels. The Committee's primary duties and
responsibilities are to:
. Serve as an independent and objective party to monitor the Company's
financial reporting, auditing and accounting processes and systems of
internal controls regarding finance and accounting compliance.
. Review and appraise the audit efforts of the Company's independent
auditor and internal audit department.
. Provide an open avenue of communication among the independent auditor,
financial and senior management, the internal auditor, and the Board of
Directors.
In fulfilling its responsibilities, the Committee shall have direct access
to the independent auditor as well as anyone within the Company. Subject to
review and approval by the Board of Directors, the Committee shall have the
ability to retain, at the Company's expense, special legal, accounting, or
other consultants or experts it deems necessary in the performance of its
duties. The Committee will primarily fulfill its responsibilities by carrying
out the activities outlined in Section IV of this Charter.
II. COMPOSITION
Members of the Committee shall meet the qualification requirements of Rule
303.01 (or any successor thereto) of the New York Stock Exchange. The
Committee shall be comprised of three or more directors as determined by the
Board of Directors, each of whom shall be independent of management and free
from any relationship that would interfere with the exercise of his or her
independent judgment. All members of the Committee shall be financially
literate, and at least one member of the Committee shall have accounting or
related financial management expertise.
The Board of Directors shall ultimately determine in its business judgment
the adequacy of the financial literacy and independence qualifications of each
member of the Committee.
The Chairman of the Board of Directors of the Company shall appoint the
members of the Committee and the Committee Chairperson.
27
<PAGE>
III. MEETINGS
The Committee shall meet at least four (4) times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee shall provide sufficient opportunity for the
internal and independent auditors to meet with the Committee without members
of management present. The Committee, or at least its Chairperson, shall meet
quarterly with the independent auditor and management to review the Company's
financial statements pursuant to item 1 in Section IV below.
IV. RESPONSIBILITIES
In carrying out its responsibilities, the Committee believes its policies
and procedures should remain flexible in order to effectively react to
changing conditions. To fulfill its responsibilities, the Committee shall
obtain the approval of the Board of Directors for the adoption of this Charter
and review and reassess this Charter on an annual basis. More specifically,
the Committee shall:
Report Review
1. Review the Company's quarterly financial statements with financial
management and the independent auditor prior to the filing of the
Company's Quarterly Report on Form 10-Q to determine that the
independent auditor does not take exception to the disclosure and
content of the financial statements. Also, any other matters required to
be communicated to the Committee by the independent auditor pursuant to
Statement on Auditing Standards ("SAS") No. 61, Communication With Audit
Committees, shall be discussed, including significant adjustments,
management judgments and accounting estimates, significant new
accounting policies, and disagreements with management. The Chairperson
may represent the entire Committee for purposes of this review.
2. Review the Company's annual audited financial statements contained in
the annual report to shareholders with financial management and the
independent auditor prior to the filing of the Company's Annual Report
on Form 10-K to determine that the independent auditor does not take
exception to the disclosure and content of the financial statements.
Also, review with financial management and the independent auditor the
results of their timely analysis of significant financial reporting
issues and practices, and discuss any other matters required to be
communicated to the Committee by the independent auditor pursuant to SAS
No. 61.
3. Inquire of management, the internal auditor, and the independent auditor
about significant financial risks or exposures to the Company and assess
the steps management has taken to mitigate such risks or exposures.
The Independent Auditor
4. Review and recommend to the Board of Directors the independent auditor
to be selected to audit the annual financial statements of the Company
and its divisions and subsidiaries.
5. Maintain a clear understanding with the independent auditor that it is
ultimately accountable to the Board of Directors and the Committee as
representatives of the shareholders, and that the Board of Directors and
the Committee have the ultimate authority and responsibility to select,
evaluate, and, where appropriate, replace the independent auditor.
6. Meet with the independent auditor and financial management of the
Company to review the scope of the proposed audit for the current year,
including timely quarterly reviews. In addition, review
28
<PAGE>
procedures to be utilized by the independent auditor, the amount of the
independent auditor's compensation, and at the conclusion of such
engagement, any comments or recommendations of the independent auditor.
7. Review with financial management and the independent auditor their
judgments about (1) the quality, not just acceptability, of the
Company's accounting principles; (2) the consistency of application of
the Company's accounting policies; (3) the clarity and completeness of
the financial statements and related disclosures; and (4) any other
significant decisions made in preparing the financial statements.
8. On an annual basis, obtain from the independent auditor a written
communication delineating all relationships between the independent
auditor and the Company as required by Independence Standards Board
("ISB") Standard No. 1, Independence Discussions With Audit Committees.
In addition, review with the independent auditor the nature and scope of
any disclosed relationships or professional services and take, or
recommend the Board of Directors take, appropriate action to ensure the
continuing independence of the independent auditor.
The Internal Auditor
9. Review and concur with management's appointment, termination, or
replacement of the internal auditor.
10. Review the internal audit function of the Company, including the
independence and authority of its reporting obligations, the proposed
audit plan for the coming year, and the coordination of such plan with
the independent auditor.
11. Receive prior to each meeting a summary of findings from completed
internal audits and the status of implementation of related
recommendations.
12. Receive a progress report on the proposed internal audit plan, with
explanations for any deviations from the original plan.
Committee Reporting
13. Report to the Board of Directors the results of the annual audit
conducted by the independent auditor.
14. Review, approve, and include a report in the proxy statement for the
Company's annual meeting of shareholders disclosing whether the
Committee has (1) reviewed and discussed the audited financial
statements with management and the independent auditor; (2) discussed
with the independent auditor the matters required to be discussed by
SAS No. 61; and (3) received from the independent auditor disclosures
regarding its independence required by ISB Standard No. 1, and
discussed with the independent auditor its independence. In addition,
the report shall include a statement whether, based on the review and
discussions conducted pursuant to the previous sentence, the Committee
recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for
the last fiscal year for filing with the Securities and Exchange
Commission.
15. Include a copy of this Charter in the proxy statement for the Company's
annual meeting of shareholders at least triennially or the year after
any significant amendment to the Charter.
16. Submit the minutes of all meetings of the Committee to the Board of
Directors.
29
<PAGE>
Other Compliance
17. Review with the Company's legal department any matter that could have a
significant impact on the Company's financial statements.
18. Perform any other activities consistent with this Charter and the
Company's By-Laws as the Committee or the Board of Directors deem
necessary or appropriate.
30
<PAGE>
--------------------------------------------------------------------------------
Please mark your 2534
[X] votes as in this
example.
Your shares will be voted as recommended by the Board of Directors unless you
otherwise indicate in which case they will be voted as marked.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
The Board recommends a vote FOR ITEMS 1 & 2 and a vote AGAINST ITEM 3.
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. To approve [_] [_] [_] 3. A shareholder [_] [_] [_]
Directors the Tyson proposal recommending
Foods, Inc. that the Board of
2000 Stock Directors adopt a
Incentive workplace code of
Plan. conduct to be reported
to shareholders by
September 2001.
For, except vote withheld from the following nominee(s):
Write number(s) of nominee(s). 4. To consider and act upon such other business as
may properly come before the Annual Meeting and
any adjournments or postponements thereof.
________________________________
-----------------------------------------------------------------------------------------------------------------------------------
I PLAN TO ATTEND THE MEETING. [_]
(The signature(s) should be exactly as the name
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 partner-
ship, 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
-----------------------------------------------------------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
</TABLE>
[LOGO OF TYSON FOODS]
PROXY VOTING INSTRUCTION CARD
Your vote is important. Casting your vote in one of the three ways described on
this instruction card votes all common shares of Tyson Foods, Inc. that you are
entitled to vote including any common shares held on your behalf in the Tyson
Foods, Inc. Employee Plans.
Please consider the issues discussed in the proxy statement and cast your vote
by:
[PHOTO OF . Accessing the World Wide Web site
COMPUTER http://www.tyson.com/investorrel to vote via the Internet.
TERMINAL] You can also register at this site to access future proxy
materials electronically.
[PHOTO OF . Using a touch-tone telephone to vote by phone toll free
TELEPHONE] from the U.S. or Canada. Simply dial 1-877-779-8683 and
follow the instructions. When you are finished voting, your
vote will be confirmed and the call will end.
[PHOTO OF . Completing, dating, signing and mailing the proxy card in
ENVELOPE] the post- age-paid envelope included with the proxy
statement or sending it to Tyson Foods, Inc., c/o First
Chicago Trust Company of New York, P.O. Box 8935, Edison,
New Jersey 08818-9147.
You can vote by phone or via the Internet anytime prior to January 11, 2001. You
will need the control number printed at the top of this instruction card to vote
by phone or via the Internet. If you do so, you do not need to mail in your
proxy card.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
TYSON FOODS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, JANUARY 12, 2001
P
The undersigned shareholder(s) of TYSON FOODS, INC. hereby appoint(s)
R 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
O registered O in the name of the undersigned, as instructed below, at the
Annual Meeting of Shareholders to be held at the Walton Arts Center, 495
West Dickson Street, Fayetteville, Arkansas, on January 12, 2001, at 10:00
X a.m. local time, and at any adjournments or postponements thereof, for the
transaction of the following business:
Y 1. To elect the following twelve (12) members to the Board of
Directors:
01-Don Tyson, 02-John H. Tyson, 03-Joe F. Starr, 04-Leland E.
Tollett, 05-Shelby D. Massey, 06-Barbara A. Tyson, 07-Lloyd V.
Hackley, 08-Donald E. Wray, 09-Gerald M. Johnston, 10-Jim Kever,
11-David A.Jones, 12-Barbara Allen
2. To approve the Tyson Foods, Inc. 2000 Stock Incentive Plan.
3. To consider and act upon a shareholder proposal recommending that
the Board of Directors adopt a workplace code of conduct to be reported to
shareholders by September 2001.
4. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
-----------
SEE REVERSE
SIDE
-----------
--------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
ANNUAL MEETING OF SHAREHOLDERS
OF
TYSON FOODS, INC.
JANUARY 12, 2001
WALTON ARTS CENTER
FAYETTEVILLE, ARKANSAS
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Please mark your 2535
[X] votes as in this
example.
Your shares will be voted as recommended by the Board of Directors unless you
otherwise indicate in which case they will be voted as marked.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
The Board recommends a vote FOR ITEMS 1 & 2 and a vote AGAINST ITEM 3.
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. To approve the Tyson [_] [_] [_] 3. A shareholder proposal [_] [_] [_]
Directors Foods, Inc. 2000 Stock recommending that the
Incentive Plan. Board of Directors
adopt a workplace code
of conduct to be
reported to shareholders
by September 2001.
For, except vote withheld from the following nominee(s):
Write number(s) of nominee(s).
4. To consider and act upon such other business
as may properly come before the Annual
Meeting and any adjournments or postponements
thereof.
______________________________
----------------------------------------------------------------------------------------------------------------------------------
I PLAN TO ATTEND THE MEETING. [_]
(The signature(s) should be exactly as the name
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
------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
[LOGO OF TYSON FOODS]
PROXY VOTING INSTRUCTION CARD
Your vote is important. Casting your vote in one of the three ways described on
this instruction card votes all common shares of Tyson Foods, Inc. that you are
entitled to vote including any common shares held on your behalf in the Tyson
Foods, Inc. Employee Plans.
Please consider the issues discussed in the proxy statement and cast your vote
by:
[Photo of computer . Accessing the World Wide Web site
terminal] http://www.tyson.com/investorrel to vote via
the Internet. You can also register at this
site to access future proxy materials
electronically.
[Photo of telephone] . Using a touch-tone telephone to vote by phone
toll free from the U.S. or Canada. Simply dial
1-877-779-8683 and follow the instructions.
When you are finished voting, your vote will
be confirmed and the call will end.
[Photo of envelope] . Completing, dating, signing and mailing the
proxy card in the post- age-paid envelope
included with the proxy statement or sending
it to Tyson Foods, Inc., c/o First Chicago
Trust Company of New York, P.O. Box 8935,
Edison, New Jersey 08818-9147.
You can vote by phone or via the Internet anytime prior to January 11, 2001. You
will need the control number printed at the top of this instruction card to vote
by phone or via the Internet. If you do so, you do not need to mail in your
proxy card.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
TYSON FOODS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, JANUARY 12, 2001
P 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
R agents and attorneys-in-fact for the undersigned, with power of
substitution, to attend the meeting and to vote the stock owned by or
O registered in the name of the undersigned, as instructed below, at the
Annual Meeting of Shareholders to be held at the Walton Arts Center, 495
X West Dickson Street, Fayetteville, Arkansas, on January 12, 2001, at 10:00
a.m. local time, and at any adjournments or postponements thereof, for the
Y transaction of the following business:
1. To elect the following twelve (12) members to the Board of
Directors:
01-Don Tyson, 02-John H. Tyson, 03-Joe F. Starr,
04-Leland E. Tollett, 05-Shelby D. Massey,
06-Barbara A. Tyson, 07-Lloyd V. Hackley, 08-Donald E. Wray,
09-Gerald M. Johnston, 10-Jim Kever, 11-David A.Jones,
12-Barbara Allen
2. To approve the Tyson Foods, Inc. 2000 Stock Incentive Plan.
3. To consider and act upon a shareholder proposal recommending that
the Board of Directors adopt a workplace code of conduct to be reported to
shareholders by September 2001.
4. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
-------------
SEE REVERSE
SIDE
-------------
--------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
ANNUAL MEETING OF SHAREHOLDERS
OF
TYSON FOODS, INC.
JANUARY 12, 2001
WALTON ARTS CENTER
FAYETTEVILLE, ARKANSAS
