<PAGE>
TYSON FOODS, INC.
2000 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS 1
1.1 DEFINITIONS 1
SECTION 2 - THE STOCK INCENTIVE PLAN 4
2.1 PURPOSE OF THE PLAN 4
2.2 STOCK SUBJECT TO THE PLAN 4
2.3 ADMINISTRATION OF THE PLAN 5
2.4 ELIGIBILITY AND LIMITS 5
SECTION 3 - TERMS OF STOCK INCENTIVES 5
3.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES 5
3.2 TERMS AND CONDITIONS OF OPTIONS 6
(A) OPTION PRICE 6
(B) OPTION TERM 7
(C) PAYMENT 7
(D) CONDITIONS TO THE EXERCISE OF AN OPTION 7
(E) TERMINATION OF INCENTIVE STOCK OPTION 7
(F) SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS 8
3.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 8
(A) SETTLEMENT 8
(B) CONDITIONS TO EXERCISE 8
3.4 TERMS AND CONDITIONS OF STOCK AWARDS 8
3.5 TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS 9
(A) PAYMENT 9
(B) CONDITIONS TO PAYMENT 9
3.6 TERMS AND CONDITIONS OF PERFORMANCE UNIT AWARDS 9
(A) PAYMENT 9
(B) CONDITIONS TO PAYMENT 9
3.7 TERMS AND CONDITIONS OF PHANTOM SHARES 10
(A) PAYMENT 10
(B) CONDITIONS TO PAYMENT 10
3.8 TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT 10
SECTION 4 - RESTRICTIONS ON STOCK 10
4.1 ESCROW OF SHARES 10
4.2 RESTRICTIONS ON TRANSFER 11
SECTION 5 - GENERAL PROVISIONS 11
5.1 WITHHOLDING 11
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION 12
5.3 CASH AWARDS 12
5.4 COMPLIANCE WITH CODE 13
5.5 RIGHT TO TERMINATE EMPLOYMENT OR SERVICE RELATIONSHIP 13
5.6 NON-ALIENATION OF BENEFITS 13
5.7 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS 13
5.8 LISTING AND LEGAL COMPLIANCE 13
5.9 TERMINATION AND AMENDMENT OF THE PLAN 13
5.10 STOCKHOLDER APPROVAL 14
5.11 CHOICE OF LAW 14
30
<PAGE>
TYSON FOODS, INC.
2000 STOCK INCENTIVE PLAN
SECTION 1 - DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun will be
deemed to include the feminine, and the singular to include the plural,
unless the context clearly indicates otherwise, and the following
capitalized words and phrases are used herein with the meaning thereafter
ascribed:
(a) "Affiliate" means (i) any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, at the time
of granting of the Option, each of the corporations (other than the
Company) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain, or (ii) any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(b) "Board of Directors" means the board of directors of the Company.
(c) "Change in Control" means any one of the following events which
may occur after the date hereof:
(1) the acquisition by any individual, entity or "group," within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act (a
"Person"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of voting securities of the Company
where such acquisition causes any such Person to own twenty-five percent
(25%) or more of the combined voting power of the then outstanding voting
securities then entitled to vote generally in the election of directors
(the "Outstanding Voting Securities"); provided, however, that for purposes
of this Section, the following shall not be deemed to result in a Change in
Control, (i) any acquisition directly from the Company, unless such a
Person subsequently acquires additional shares of Outstanding Voting
Securities other than from the Company, in which case any such subsequent
acquisition shall be deemed to be a Change in Control; or (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company;
(2) a merger, consolidation, share exchange, combination,
reorganization or like transaction involving the Company in which the
stockholders of the Company immediately prior to such transaction do not
own at least fifty percent (50%) of the value or voting power of the issued
and outstanding capital stock of the Company or its successor immediately
after such transaction;
31
<PAGE>
(3) the sale or transfer (other than as security for the
Company's obligations) of more than fifty percent (50%) of the assets of
the Company in any one transaction or a series of related transactions
occurring within a one (1) year period in which the Company, any
corporation controlled by the Company or the stockholders of the Company
immediately prior to the transaction do not own at least fifty percent
(50%) of the value or voting power of the issued and outstanding equity
securities of the acquiror immediately after the transaction;
(4) the sale or transfer of more than fifty percent (50%) of
the value or voting power of the issued and outstanding capital stock of
the Company by the holders thereof in any one transaction or a series of
related transactions occurring within a one (1) year period in which the
Company, any corporation controlled by the Company or the stockholders of
the Company immediately prior to the transaction do not own at least fifty
percent (50%) of the value or voting power of the issued and outstanding
equity securities of the acquiror immediately after the transaction;
(5) within any twelve-month period the persons who were
directors of the Company immediately before the beginning of such twelve-
month period (the "Incumbent Directors") shall cease to constitute at least
a majority of the Board of Directors; provided that no director whose
initial assumption of office is in connection with an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) relating to the election of directors
of the Company shall be deemed to be an Incumbent Director; or
(6) the dissolution or liquidation of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee appointed by the Board of
Directors to administer the Plan. The Board of Directors shall consider
the advisability of whether the members of the Committee shall consist
solely of at least two members of the Board of Directors who are both
"outside directors" as defined in Treas. Reg. 1.162-27(e) as promulgated
by the Internal Revenue Service and "non-employee directors" as defined in
Rule 16b-3(b)(3) as promulgated under the Exchange Act.
(f) "Company" means Tyson Foods, Inc., a Delaware corporation.
(g) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of the Company
for the Participant. If no long-term disability plan or policy was ever
maintained on behalf of the Participant or, if the determination of
Disability relates to an incentive stock option, Disability means that
condition described in Code Section 22(e)(3), as amended from time to time.
In the event of a dispute, the determination of Disability will be made by
the Committee and will be supported by advice of a physician competent in
the area to which such Disability relates.
(h) "Dividend Equivalent Rights" means certain rights to receive
cash payments as described in Section 3.5.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
32
<PAGE>
(j) "Fair Market Value" with regard to a date means the closing
price at which Stock shall have been sold on that date or the last trading
date prior to that date as reported by the New York Stock Exchange and
published in The Wall Street Journal.
(k) "Incentive Stock Option" means an incentive stock option
contemplated by the provisions of Code Section 422 or any successor
thereto.
(l) "Nonqualified Stock Option" means an option that is not
designated as, or otherwise intended to be, an Incentive Stock Option.
(m) "Option" means a Nonqualified Stock Option or an Incentive
Stock Option.
(n) "Over 10% Owner" means an individual who at the time an
Incentive Stock Option is granted owns Company stock possessing more than
10% of the total combined voting power of the Company or one of its
Subsidiaries, determined by applying the attribution rules of Code
Section 424(d).
(o) "Participant" means an individual who receives a Stock
Incentive hereunder.
(p) "Performance Unit Award" refers to a performance unit award
as described in Section 3.6.
(q) "Phantom Shares" refers to the rights described in Section
3.7.
(r) "Plan" means the Tyson Foods, Inc. 2000 Stock Incentive Plan.
(s) "Stock" means the Company's Class A $.10 par value common
stock.
(t) "Stock Appreciation Right" means a stock appreciation right
described in Section 3.3.
(u) "Stock Award" means a stock award described in Section 3.4.
(v) "Stock Incentive Agreement" means an agreement between the
Company and a Participant or other documentation evidencing an award of a
Stock Incentive.
(w) "Stock Incentive Program" means a written program established
by the Committee, pursuant to which Stock Incentives are awarded under the
Plan under uniform terms, conditions and restrictions set forth in such
written program.
(x) "Stock Incentives" means, collectively, Dividend Equivalent
Rights, Options, Performance Unit Awards, Phantom Shares, Stock
Appreciation Rights and Stock Awards.
33
<PAGE>
(y) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, with
respect to incentive stock options, at the time of the granting of the
Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
the chain.
(z) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company and
its Affiliates, regardless of whether severance or similar payments are
made to the Participant for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee will, in its absolute discretion, determine the
effect of all matters and questions relating to a Termination of
Employment, including, but not by way of limitation, the question of
whether a leave of absence constitutes a Termination of Employment.
SECTION 2 - THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide
incentive to officers, employees, directors, consultants and other service
providers of the Company and its Affiliates to stimulate their efforts
toward the continued success of the Company and to operate and manage the
business in a manner that will provide for the long-term growth and
profitability of the Company; (b) encourage stock ownership by officers,
employees, directors, consultants and other service providers by providing
them with a means to acquire a proprietary interest in the Company, acquire
shares of Stock, or to receive compensation which is based upon
appreciation in the value of Stock; and (c) provide a means of obtaining,
rewarding and retaining such key personnel.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance
with Section 5.2, 7,000,000 shares of Stock (the "Maximum Plan Shares") are
hereby reserved exclusively for issuance pursuant to Stock Incentives. At
no time may the Company have outstanding under the Plan Stock Incentives
subject to Section 16 of the Exchange Act and shares of Stock issued in
respect of Stock Incentives under the Plan in excess of the Maximum Plan
Shares. The shares of Stock attributable to the nonvested, unpaid,
unexercised, unconverted or otherwise unsettled portion of any Stock
Incentive that is forfeited or cancelled or expires or terminates for any
reason without becoming vested, paid, exercised, converted or otherwise
settled in full will again be available for purposes of the Plan.
34
<PAGE>
2.3 Administration of the Plan. The Plan is administered by the
Committee. The Committee has full authority in its discretion to determine
the officers, employees, directors, consultants and service providers of
the Company or its Affiliates to whom Stock Incentives will be granted and
the terms and provisions of Stock Incentives, subject to the Plan. Subject
to the provisions of the Plan, the Committee has full and conclusive
authority to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of
the respective Stock Incentive Agreements and to make all other
determinations necessary or advisable for the proper administration of the
Plan. The Committee's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). The Committee's decisions are final and binding on
all Participants.
2.4 Eligibility and Limits. Stock Incentives may be granted only to
officers, employees, directors, consultants and other service providers of
the Company, or any Affiliate of the Company; provided, however, that an
Incentive Stock Option may only be granted to an employee of the Company or
any Subsidiary. In the case of Incentive Stock Options, the aggregate Fair
Market Value (determined as at the date an Incentive Stock Option is
granted) of Stock with respect to which stock options intended to meet the
requirements of Code Section 422 become exercisable for the first time by
an individual during any calendar year under all plans of the Company and
its Subsidiaries may not exceed $100,000; provided further, that if the
limitation is exceeded, the Incentive Stock Option(s) which cause the
limitation to be exceeded will be treated as Nonqualified Stock Option(s).
SECTION 3 - TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives.
(a) The number of shares of Stock as to which a Stock Incentive
may be granted will be determined by the Committee in its sole discretion,
subject to the provisions of Section 2.2 as to the total number of shares
available for grants under the Plan and subject to the limits on Options
and Stock Appreciation Rights in the following sentence. To the extent
required under Section 162(m) of the Code and the regulations thereunder
for compensation to be treated as qualified performance-based compensation,
subject to adjustment in accordance with Section 5.2, the maximum number of
shares of Stock with respect to which Options or Stock Appreciation Rights
may be granted during any calendar year to any employee may not exceed
1,000,000. In applying this limitation, if an Option or Stock Appreciation
Right, or any portion thereof, granted to an employee is cancelled or
repriced for any reason, then the shares of Stock attributable to such
cancellation or repricing either shall continue to be counted as an
outstanding grant or shall be counted as a new grant of shares of Stock, as
the case may be, against the affected employee's 1,000,000 share limit for
the appropriate calendar year.
35
<PAGE>
(b) Each Stock Incentive will either be evidenced by a Stock
Incentive Agreement in such form and containing such terms, conditions and
restrictions as the Committee may determine to be appropriate, or be made
subject to the terms of a Stock Incentive Program, containing such terms,
conditions and restrictions as the Committee may determine to be
appropriate. Each Stock Incentive Agreement or Stock Incentive Program is
subject to the terms of the Plan and any provisions contained in the Stock
Incentive Agreement or Stock Incentive Program that are inconsistent with
the Plan are null and void.
(c) The date a Stock Incentive is granted will be the date on
which the Committee has approved the terms and conditions of the Stock
Incentive and has determined the recipient of the Stock Incentive and the
number of shares covered by the Stock Incentive, and has taken all such
other actions necessary to complete the grant of the Stock Incentive.
(d) Any Stock Incentive may be granted in connection with all
or any portion of a previously or contemporaneously granted Stock
Incentive. Exercise or vesting of a Stock Incentive granted in connection
with another Stock Incentive may result in a pro rata surrender or
cancellation of any related Stock Incentive, as specified in the applicable
Stock Incentive Agreement or Stock Incentive Program.
(e) Unless otherwise permitted by the Committee, Stock
Incentives are not transferable or assignable except by will or by the laws
of descent and distribution and are exercisable, during the Participant's
lifetime, only by the Participant; or in the event of the Disability of the
Participant, by the legal representative of the Participant; or in the
event of death of the Participant, by the legal representative of the
Participant's estate or if no legal representative has been appointed, by
the successor in interest determined under the Participant's will.
Notwithstanding the foregoing, the Committee shall not permit Incentive
Stock Options to be transferred or assigned beyond the limitations set
forth in this Section 3.1(e).
3.2 Terms and Conditions of Options. Each Option granted under the
Plan must be evidenced by a Stock Incentive Agreement. At the time any
Option is granted, the Committee will determine whether the Option is to be
an Incentive Stock Option described in Code Section 422 or a Nonqualified
Stock Option, and the Option must be clearly identified as to its status as
an Incentive Stock Option or a Nonqualified Stock Option. Incentive Stock
Options may only be granted to employees of the Company or any Subsidiary.
At the time any Incentive Stock Option granted under the Plan is exercised,
the Company will be entitled to legend the certificates representing the
shares of Stock purchased pursuant to the Option to clearly identify them
as representing the shares purchased upon the exercise of an Incentive
Stock Option. An Incentive Stock Option may only be granted within ten
(10) years from the earlier of the date the Plan is adopted or approved by
the Company's stockholders.
36
<PAGE>
(a) Option Price. Subject to adjustment in accordance with
Section 5.2 and the other provisions of this Section 3.2, the exercise
price (the "Exercise Price") per share of Stock purchasable under any
Option must be as set forth in the applicable Stock Incentive Agreement,
but in no event may it be less than the Fair Market Value on the date the
Option is granted with respect to an Incentive Stock Option. With respect
to each grant of an Incentive Stock Option to a Participant who is an Over
10% Owner, the Exercise Price may not be less than 110% of the Fair Market
Value on the date the Option is granted.
(b) Option Term. Any Incentive Stock Option granted to a
Participant who is not an Over 10% Owner is not exercisable after the
expiration of ten (10) years after the date the Option is granted. Any
Incentive Stock Option granted to an Over 10% Owner is not exercisable
after the expiration of five (5) years after the date the Option is
granted. The term of any Nonqualified Stock Option must be as specified in
the applicable Stock Incentive Agreement.
(c) Payment. Payment for all shares of Stock purchased
pursuant to the exercise of an Option will be made in any form or manner
authorized by the Committee in the Stock Incentive Agreement or by
amendment thereto, including, but not limited to, cash or, if the Stock
Incentive Agreement provides:
(1) by delivery to the Company of a number of shares of
Stock which have been owned by the holder for at least six (6) months prior
to the date of exercise having an aggregate Fair Market Value of not less
than the product of the Exercise Price multiplied by the number of shares
the Participant intends to purchase upon exercise of the Option on the date
of delivery;
(2) in a cashless exercise through a broker; or
(3) by having a number of shares of Stock withheld, the
Fair Market Value of which as of the date of exercise is sufficient to
satisfy the Exercise Price.
In its discretion, the Committee also may authorize (at the time an Option
is granted or thereafter) Company financing to assist the Participant as to
payment of the Exercise Price on such terms as may be offered by the
Committee in its discretion. Payment must be made at the time that the
Option or any part thereof is exercised, and no shares may be issued or
delivered upon exercise of an option until full payment has been made by
the Participant. The holder of an Option, as such, has none of the rights
of a stockholder.
(d) Conditions to the Exercise of an Option. Each Option
granted under the Plan is exercisable by whom, at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee specifies in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of an Option, the Committee, at any time
before complete termination of such Option, may accelerate the time or
times at which such Option may be exercised in whole or in part, including,
without limitation, upon a Change in Control and may permit the Participant
or any other designated person to exercise the Option, or any portion
thereof, for all or part of the remaining Option term, notwithstanding any
provision of the Stock Incentive Agreement to the contrary.
37
<PAGE>
(e) Termination of Incentive Stock Option. With respect to an
Incentive Stock Option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised will expire, terminate, and become unexercisable no later than
the expiration of three (3) months after the date of Termination of
Employment; provided, however, that in the case of a holder whose
Termination of Employment is due to death or Disability, one (1) year will
be substituted for such three (3) month period; provided, further that such
time limits may be exceeded by the Committee under the terms of the grant,
in which case, the Incentive Stock Option will be a Nonqualified Stock
Option if it is exercised after the time limits that would otherwise apply.
For purposes of this Subsection (e), Termination of Employment of the
Participant will not be deemed to have occurred if the Participant is
employed by another corporation (or a parent or subsidiary corporation of
such other corporation) which has assumed the Incentive Stock Option of the
Participant in a transaction to which Code Section 424(a) is applicable.
(f) Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3.2, any Option
issued in substitution for an option previously issued by another entity,
which substitution occurs in connection with a transaction to which Code
Section 424(a) is applicable, may provide for an exercise price computed in
accordance with such Code Section and the regulations thereunder and may
contain such other terms and conditions as the Committee may prescribe to
cause such substitute Option to contain as nearly as possible the same
terms and conditions (including the applicable vesting and termination
provisions) as those contained in the previously issued option being
replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan must be evidenced by a Stock
Incentive Agreement. A Stock Appreciation Right entitles the Participant
to receive the excess of (1) the Fair Market Value of a specified or
determinable number of shares of the Stock at the time of payment or
exercise over (2) a specified or determinable price which, in the case of a
Stock Appreciation Right granted in connection with an Option, may not be
less than the Exercise Price for that number of shares subject to that
Option. A Stock Appreciation Right granted in connection with a Stock
Incentive may only be exercised to the extent that the related Stock
Incentive has not been exercised, paid or otherwise settled.
(a) Settlement. Upon settlement of a Stock Appreciation Right,
the Company must pay to the Participant the appreciation in cash or shares
of Stock (valued at the aggregate Fair Market Value on the date of payment
or exercise) as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation Right
granted under the Plan is exercisable or payable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee specifies in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of a Stock Appreciation Right, the Committee,
at any time before complete termination of such Stock Appreciation Right,
may accelerate the time or times at which such Stock Appreciation Right may
be exercised or paid in whole or in part.
38
<PAGE>
3.4 Terms and Conditions of Stock Awards. The number of shares of
Stock subject to a Stock Award and restrictions or conditions on such
shares, if any, will be as the Committee determines, and the certificate
for such shares will bear evidence of any restrictions or conditions.
Subsequent to the date of the grant of the Stock Award, the Committee has
the power to permit, in its discretion, an acceleration of the expiration
of an applicable restriction period with respect to any part or all of the
shares awarded to a Participant. The Committee may require a cash payment
from the Participant in an amount no greater than the aggregate Fair Market
Value of the shares of Stock awarded determined at the date of grant in
exchange for the grant of a Stock Award or may grant a Stock Award without
the requirement of a cash payment.
3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
Equivalent Right entitles the Participant to receive payments from the
Company in an amount determined by reference to any cash dividends paid on
a specified number of shares of Stock to Company stockholders of record
during the period such rights are effective. The Committee may impose such
restrictions and conditions on any Dividend Equivalent Right as the
Committee in its discretion shall determine, including the date any such
right shall terminate and may reserve the right to terminate, amend or
suspend any such right at any time.
(a) Payment. Payment in respect of a Dividend Equivalent Right
may be made by the Company in cash or shares of Stock (valued at Fair
Market Value on the date of payment) as provided in the Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision,
as the Committee may determine.
(b) Conditions to Payment. Each Dividend Equivalent Right
granted under the Plan is payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee
specifies in the applicable Stock Incentive Agreement or Stock Incentive
Program; provided, however, that subsequent to the grant of a Dividend
Equivalent Right, the Committee, at any time before complete termination of
such Dividend Equivalent Right, may accelerate the time or times at which
such Dividend Equivalent Right may be paid in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A Performance
Unit Award shall entitle the Participant to receive, at a specified future
date, payment of an amount equal to all or a portion of the value of a
specified or determinable number of units (stated in terms of a designated
or determinable dollar amount per unit) granted by the Committee. At the
time of the grant, the Committee must determine the base value of each
unit, the number of units subject to a Performance Unit Award, the
performance factors applicable to the determination of the ultimate payment
value of the Performance Unit Award and the period over which Company
performance shall be measured. The Committee may provide for an alternate
base value for each unit under certain specified conditions.
(a) Payment. Payment in respect of Performance Unit Awards may
be made by the Company in cash or shares of Stock (valued at Fair Market
Value on the date of payment) as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program or, in the absence of such provision,
as the Committee may determine.
39
<PAGE>
(b) Conditions to Payment. Each Performance Unit Award granted
under the Plan shall be payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee
may specify in the applicable Stock Incentive Agreement or Stock Incentive
Program; provided, however, that subsequent to the grant of a Performance
Unit Award, the Committee, at any time before complete termination of such
Performance Unit Award, may accelerate the time or times at which such
Performance Unit Award may be paid in whole or in part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall
entitle the Participant to receive, at a specified future date, payment of
an amount equal to all or a portion of the Fair Market Value of a specified
number of shares of Stock at the end of a specified period. At the time of
the grant, the Committee will determine the factors which will govern the
portion of the rights so payable, including, at the discretion of the
Committee, any performance criteria that must be satisfied as a condition
to payment. Phantom Share awards containing performance criteria may be
designated as Performance Unit Awards.
(a) Payment. Payment in respect of Phantom Shares may be made
by the Company in cash or shares of Stock (valued at Fair Market Value on
the date of payment) as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision,
as the Committee may determine.
(b) Conditions to Payment. Each Phantom Share granted under
the Plan is payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee may specify in the
applicable Stock Incentive Agreement or Stock Incentive Program; provided,
however, that subsequent to the grant of a Phantom Share, the Committee, at
any time before complete termination of such Phantom Share, may accelerate
the time or times at which such Phantom Share may be paid in whole or in
part.
3.8 Treatment of Awards Upon Termination of Employment. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who has experienced a Termination of Employment may be
cancelled, accelerated, paid or continued, as provided in the applicable
Stock Incentive Agreement or Stock Incentive Program, or, in the absence of
such provision, as the Committee may determine. The portion of any award
exercisable in the event of continuation or the amount of any payment due
under a continued award may be adjusted by the Committee to reflect the
Participant's period of service from the date of grant through the date of
the Participant's Termination of Employment or such other factors as the
Committee determines are relevant to its decision to continue the award.
40
<PAGE>
SECTION 4 - RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of
Stock issued under the Plan will be issued in the Participant's name, but,
if the applicable Stock Incentive Agreement or Stock Incentive Program so
provides, the shares of Stock will be held by a custodian designated by the
Committee (the "Custodian"). Each applicable Stock Incentive Agreement or
Stock Incentive Program providing for transfer of shares of Stock to the
Custodian must appoint the Custodian as the attorney-in-fact for the
Participant for the term specified in the applicable Stock Incentive
Agreement or Stock Incentive Program, with full power and authority in the
Participant's name, place and stead to transfer, assign and convey to the
Company any shares of Stock held by the Custodian for such Participant, if
the Participant forfeits the shares under the terms of the applicable Stock
Incentive Agreement or Stock Incentive Program. During the period that the
Custodian holds the shares subject to this Section, the Participant is
entitled to all rights, except as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program, applicable to shares of
Stock not so held. Any dividends declared on shares of Stock held by the
Custodian must as provided in the applicable Stock Incentive Agreement or
Stock Incentive Program, be paid directly to the Participant or, in the
alternative, be retained by the Custodian or by the Company until the
expiration of the term specified in the applicable Stock Incentive
Agreement or Stock Incentive Program and shall then be delivered, together
with any proceeds, with the shares of Stock to the Participant or to the
Company, as applicable.
4.2 Restrictions on Transfer. The Participant does not have the
right to make or permit to exist any disposition of the shares of Stock
issued pursuant to the Plan except as provided in the Plan or the
applicable Stock Incentive Agreement or Stock Incentive Program. Any
disposition of the shares of Stock issued under the Plan by the Participant
not made in accordance with the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program will be void. The Company will not
recognize, or have the duty to recognize, any disposition not made in
accordance with the Plan and the applicable Stock Incentive Agreement or
Stock Incentive Program, and the shares so transferred will continue to be
bound by the Plan and the applicable Stock Incentive Agreement or Stock
Incentive Program.
41
<PAGE>
SECTION 5 - GENERAL PROVISIONS
5.1 Withholding. The Company must deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or
transfer shares of Stock under the Plan or upon the vesting of any Stock
Award, the Company has the right to require the recipient to remit to the
Company an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares or the vesting of such Stock Award. A
Participant may pay the withholding tax in cash, or, if the applicable
Stock Incentive Agreement or Stock Incentive Program provides, a
Participant may elect to have the number of shares of Stock he is to
receive reduced by, or with respect to a Stock Award, tender back to the
Company, the smallest number of whole shares of Stock which, when
multiplied by the Fair Market Value of the shares of Stock determined as of
the Tax Date (defined below), is sufficient to satisfy the minimum required
federal, state and local, if any, withholding taxes arising from exercise
or payment of a Stock Incentive (a "Withholding Election"). A Participant
may make a Withholding Election only if both of the following conditions
are met:
(a) The Withholding Election must be made on or prior to the
date on which the amount of tax required to be withheld is determined (the
"Tax Date") by executing and delivering to the Company a properly completed
notice of Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable except on
six months advance written notice delivered to the Company; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved for the grant of
Options, Dividend Equivalent Rights, Performance Unit Awards, Phantom
Shares, Stock Appreciation Rights and Stock Awards; the number of shares of
Stock reserved for issuance upon the exercise or payment, as applicable, of
each outstanding Option, Dividend Equivalent Right, Performance Unit Award,
Phantom Share and Stock Appreciation Right and upon vesting or grant, as
applicable, of each Stock Award; the Exercise Price of each outstanding
Option and the specified number of shares of Stock to which each
outstanding Dividend Equivalent Right, Performance Unit Award, Phantom
Share and Stock Appreciation Right pertains may be proportionately adjusted
for any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or combination of shares or the payment of a
stock dividend in shares of Stock to holders of outstanding shares of Stock
or any other increase or decrease in the number of shares of Stock
outstanding effected without receipt of consideration by the Company.
42
<PAGE>
(b) In the event of any merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the
corporate structure of the Company or its Stock or tender offer for shares
of Stock, the Committee, in its sole discretion, may make such adjustments
with respect to awards and take such other action as it deems necessary or
appropriate to reflect or in anticipation of such merger, consolidation,
extraordinary dividend (including a spin-off), reorganization, other change
in corporate structure or tender offer, including, without limitation, the
substitution of new awards, the termination or adjustment of outstanding
awards, the acceleration of awards or the removal of restrictions on
outstanding awards, all as may be provided in the applicable Stock
Incentive Agreement or, if not expressly addressed therein, as the
Committee subsequently may determine in the event of any such merger,
consolidation, extraordinary dividend (including a spin-off),
reorganization or other change in the corporate structure of the Company or
its Stock or tender offer for shares of Stock. Any adjustment pursuant to
this Section 5.2 may provide, in the Committee's discretion, for the
elimination without payment therefor of any fractional shares that might
otherwise become subject to any Stock Incentive.
(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan must not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity
securities having preferences or priorities as to the Stock or the rights
thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other
corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of a Stock Incentive the right to receive,
at such times and in such amounts as determined by the Committee in its
discretion, a cash amount which is intended to reimburse such person for
all or a portion of the federal, state and local income taxes imposed upon
such person as a consequence of the receipt of the Stock Incentive or the
exercise of rights thereunder.
5.4 Compliance with Code. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions
of the Plan and all Incentive Stock Options granted hereunder must be
construed in such manner as to effectuate that intent.
5.5 Right to Terminate Employment or Service Relationship. Nothing
in the Plan or in any Stock Incentive Agreement confers upon any
Participant the right to continue as an officer, employee, director or
service provider of the Company or any of its Affiliates or affect the
right of the Company or any of its Affiliates to terminate the
Participant's employment or service relationship at any time.
5.6 Non-alienation of Benefits. Other than as specifically provided
with regard to the death of a Participant, no benefit under the Plan may be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall
be void. No such benefit may, prior to receipt by the Participant, be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Participant.
43
<PAGE>
5.7 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in
its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any
securities exchange or under any state or federal law is necessary or
desirable as a condition of or in connection with the granting of such
Stock Incentive or the purchase or delivery of shares thereunder, the
delivery of any or all shares pursuant to such Stock Incentive may be
withheld unless and until such listing, registration or qualification shall
have been effected. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities laws with respect
to the shares of Stock purchasable or otherwise deliverable under Stock
Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock
pursuant to a Stock Incentive, that the Participant or other recipient of a
Stock Incentive represent, in writing, that the shares received pursuant to
the Stock Incentive are being acquired for investment and not with a view
to distribution and agree that the shares will not be disposed of except
pursuant to an effective registration statement, unless the Company shall
have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may include on certificates representing
shares delivered pursuant to a Stock Incentive such legends referring to
the foregoing representations or restrictions or any other applicable
restrictions on resale as the Company, in its discretion, shall deem
appropriate.
5.8 Listing and Legal Compliance. The Committee may suspend the
exercise or payment of any Stock Incentive so long as it determines that
securities exchange listing or registration or qualification under any
securities laws is required in connection therewith and has not been
completed on terms acceptable to the Committee.
5.9 Termination and Amendment of the Plan. The Board of Directors
at any time may amend or terminate the Plan without stockholder approval;
provided, however, that the Board of Directors may condition any amendment
on the approval of stockholders of the Company if such approval is
necessary or advisable with respect to tax, securities or other applicable
laws. No such termination or amendment without the consent of the holder
of a Stock Incentive may adversely affect the rights of the Participant
under such Stock Incentive.
5.10 Stockholder Approval. The Plan must be submitted to the
stockholders of the Company for their approval within twelve (12) months
before or after the adoption of the Plan by the Board of Directors of the
Company. If such approval is not obtained, any Stock Incentive granted
hereunder will be void.
5.11 Choice of Law. The laws of the State of Delaware govern the
Plan, to the extent not preempted by federal law, without reference to the
principles of conflict of laws.
44
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Plan on this 11th day of
August, 2000.
TYSON FOODS, INC.
By:
Title:
45
<PAGE>
