IBP INC, PREM14A, 2000-11-28

IBP INC
PREM14A, 2000-11-28
MEAT PACKING PLANTS

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SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

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<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

IBP, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

IBP, INC.
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(Name of Person(s) Filing Proxy Statement)
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Payment of Filing Fee (Check the appropriate box):

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<S> <C> <C>
/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
Common Stock, par value $0.05 per share ("Common Stock"),
of IBP, inc. ("IBP")
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(2) Aggregate number of securities to which transaction
applies:
105,610,334 shares of Common Stock and options to purchase
3,573,588 shares of Common Stock
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
$22.25 per share in cash-out merger plus the difference
between $22.25 and the exercise price per share of each
option
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(4) Proposed maximum aggregate value of transaction:
$2,374,594,896
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(5) Total fee paid:
$474,919
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/ / 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.:
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(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
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IBP, INC.
800 STEVENS PORT DRIVE
DAKOTA DUNES, SOUTH DAKOTA 57049

, 2000

Dear IBP Shareholder:

You are cordially invited to attend a special meeting of the shareholders of
IBP, inc. to be held on , 2000, at a.m., local time, at IBP
World Headquarters, 800 Stevens Port Drive, Dakota Dunes, South Dakota 57049. At
this meeting, you will be asked to consider and vote on the merger of IBP with
Rawhide Acquisition Corporation, a wholly-owned subsidiary of Rawhide Holdings
Corporation, a company controlled by DLJ Merchant Banking Partners III, L.P. and
its affiliates and certain other persons.

If the merger is completed, you will receive $22.25 in cash for each share of
IBP common stock you own. IBP, the surviving company in the merger, will become
a privately held company and its common stock will no longer be publicly traded.
After the merger, IBP will be owned indirectly by DLJ Merchant Banking Partners
III, L.P. and its affiliates, Archer-Daniels-Midland Company, Booth Creek
Partners Limited III, LLLP and Jeffrey J. Joyce, as well as Richard L. Bond and
I and certain other members of IBP management. Mr. Bond and I will continue as
IBP board members and executive officers.

The attached notice of meeting and proxy statement describe the merger and the
merger agreement. We urge you to read these materials carefully.

A special committee composed entirely of directors with no financial interest in
the buyout group and formed by IBP's board of directors in connection with the
merger, negotiated the $22.25 per share price and other terms of the transaction
with Rawhide Holdings. The special committee unanimously approved the merger
agreement and recommended that the entire board of directors approve it and
submit it to IBP shareholders for approval.

IBP's board of directors and special committee believe that the terms of the
proposed merger and the terms and provisions of the merger agreement are fair to
and in the best interests of IBP shareholders and recommend that the IBP
shareholders vote "FOR" the approval of the merger proposal. Board members
Richard L. Bond, Eugene D. Leman and myself each abstained from voting on this
matter because of our proposed financial interest in the buyout group, and John
S. Chalsty abstained due to his relationship with DLJ Merchant Banking Partners
III, L.P.

The merger is an important decision for IBP and its shareholders. Whether or not
you plan to attend the special meeting, I urge you to vote by telephone, via the
Internet or by completing, dating, signing and promptly returning the enclosed
proxy card to ensure that your shares will be voted at the meeting.

Sincerely,
Robert L. Peterson
Chairman and Chief Executive Officer
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THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SEC PASSED UPON THE FAIRNESS OR MERITS OF THIS
TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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THIS PROXY STATEMENT IS BEING MAILED TO IBP SHAREHOLDERS BEGINNING ON OR
ABOUT , 2000.
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IBP, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON
, 2000

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of IBP has been
called by the board of directors of IBP. The details of the meeting are as
follows:

PLACE: IBP World Headquarters
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049

DATE: , 2000

TIME: a.m., local time

The purposes of the special meeting are:

1. To consider and to vote on the adoption and approval of an Agreement and
Plan of Merger dated as of October 1, 2000 among IBP, inc., Rawhide Holdings
Corporation and Rawhide Acquisition Corporation, a wholly-owned subsidiary of
Rawhide Holdings. Rawhide Holdings is controlled by DLJ Merchant Banking
Partners III, L.P. and its affiliates and certain other persons.

2. To transact such other business as may properly come before the special
meeting.

IBP's board of directors has fixed , 2000 as the record date for
the special meeting. Only stockholders of record at the close of business on
, 2000 may vote at the special meeting.

IBP's board of directors and special committee believe that the terms of the
proposed merger and the terms and provisions of the merger agreement are fair to
and in the best interests of IBP shareholders and recommend that the IBP
shareholders vote "FOR" the approval of the merger proposal. Board members
Robert L. Peterson, Richard L. Bond and Eugene D. Leman each abstained from
voting on this matter because of their proposed financial interest in the buyout
group, and John S. Chalsty abstained due to his relationship with DLJ Merchant
Banking Partners III, L.P.

We urge you to read the attached proxy statement. If you are a stockholder
of record you should receive a proxy card with the attached proxy statement.
Whether or not you plan to attend the special meeting, you can be sure your
shares are represented at the special meeting by promptly submitting your proxy
by telephone or by Internet or by completing, signing, dating and returning your
proxy card in the enclosed postage prepaid envelope. Prior to being voted, your
proxy may be withdrawn in the manner described in the attached proxy statement.

By order of the Board of Directors
Sheila B. Hagen
Secretary

, 2000
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------------------------

TABLE OF CONTENTS
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PAGE
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SUMMARY TERM SHEET.......................................... 1
The Companies........................................... 1
Transactions Immediately Prior to the Merger............ 1
The Merger.............................................. 2
Vote Required........................................... 2
Consequences of the Merger.............................. 2
Recommendations of IBP's Board of Directors and the
Special Committee...................................... 2
Reasons for the Merger.................................. 3
Voting Agreement........................................ 3
Dissenters' Rights...................................... 3
Fairness Opinion of J.P. Morgan Securities Inc.......... 3
Interests of Certain Persons in the Merger.............. 3
Conditions to the Merger................................ 4
Termination of the Merger Agreement..................... 4
Termination Fees........................................ 4
Financing; Source of Funds.............................. 4
Material Federal Income Tax Consequences................ 5
Shareholder Lawsuits Challenging the Merger............. 5
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 6
QUESTIONS AND ANSWERS ABOUT VOTING AT THE SPECIAL MEETING... 8
WHO CAN HELP ANSWER YOUR QUESTIONS.......................... 9
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION............................................... 10
INFORMATION CONCERNING THE SPECIAL MEETING.................. 11
Date, Time and Place.................................... 11
Purpose................................................. 11
Record Date and Quorum Requirement...................... 11
Voting Procedures....................................... 11
Vote Required........................................... 12
Voting Agreement........................................ 13
Voting on Other Matters................................. 13
Proxy Solicitation...................................... 13
SPECIAL FACTORS............................................. 14
Background of the Merger................................ 14
Recommendation of the Special Committee and Board of
Directors; Purpose and
Reasons for the Merger................................ 26
Benefits and Detriments of the Merger to IBP and IBP's
Shareholders........................................... 32
Opinion of the Financial Advisor for the Special
Committee.............................................. 33
Purpose of Rawhide Holdings and DLJMB; Reasons for and
Structure of the Merger................................ 39
Position of Rawhide Holdings and DLJMB.................. 40
Interests of Certain Persons in the Merger; Certain IBP
Benefit Plans; and
Continued Ownership of IBP After the Merger........... 41
Transactions Immediately Prior to the Merger............ 45
Consequences of the Merger.............................. 46
Plans for IBP After the Merger.......................... 46
Conduct of the Business of IBP if the Merger Is Not
Completed.............................................. 47
Material Federal Income Tax Consequences................ 47
Financing; Source of Funds.............................. 49
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PAGE
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Fees and Expenses....................................... 50
Regulatory Requirements................................. 51
Shareholder Lawsuits Challenging the Merger............. 51
CERTAIN FINANCIAL PROJECTIONS............................... 53
THE MERGER AGREEMENT........................................ 56
The Merger.............................................. 56
Time of Closing......................................... 56
Exchange and Payment Procedures......................... 56
Transfers of Shares..................................... 56
Treatment of Stock Options.............................. 56
Representations and Warranties.......................... 57
Covenants of IBP........................................ 58
Covenants of Rawhide Holdings........................... 59
Additional Agreements................................... 60
Conditions.............................................. 60
Termination of the Merger Agreement..................... 61
Termination Fees........................................ 62
Expenses................................................ 62
Amendments; Waivers..................................... 62
THE VOTING AGREEMENT........................................ 63
Scope of Agreement...................................... 63
Transfer of Shares...................................... 63
Voting; Proxy........................................... 63
No Solicitation; No Exercise of Dissenters' Rights...... 63
Termination............................................. 63
APPRAISAL OR DISSENTER'S RIGHTS............................. 64
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA............. 67
COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION.......... 68
COMMON STOCK PURCHASE INFORMATION........................... 69
CURRENT EXECUTIVE OFFICERS AND DIRECTORS OF IBP............. 73
MANAGEMENT OF IBP FOLLOWING THE MERGER...................... 75
Board of Directors...................................... 75
Executive Officers...................................... 75
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 76
RAWHIDE ENTITIES AND DLJMB.................................. 78
ARCHER-DANIELS-MIDLAND COMPANY.............................. 82
BOOTH CREEK AND JEFFREY J. JOYCE............................ 87
SHAREHOLDER PROPOSALS....................................... 88
INDEPENDENT ACCOUNTANTS..................................... 88
WHERE YOU CAN FIND MORE INFORMATION......................... 88
DOCUMENTS INCORPORATED BY REFERENCE......................... 89

APPENDICES

Appendix A -- Agreement and Plan of Merger.................. A-1
Appendix B -- Voting Agreement.............................. B-1
Appendix C -- Fairness Opinion of J.P. Morgan Securities
Inc....................................................... C-1
Appendix D -- Appraisal or Dissenters' Rights Provisions.... D-1
</TABLE>

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SUMMARY TERM SHEET

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION INCLUDED IN THIS PROXY
STATEMENT. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL OF THE INFORMATION
THAT IS IMPORTANT TO YOU. TO MORE FULLY UNDERSTAND THE MERGER AND FOR A MORE
COMPLETE DESCRIPTION OF THE LEGAL TERMS OF THE MERGER, YOU SHOULD READ CAREFULLY
THIS ENTIRE DOCUMENT AND THE OTHER DOCUMENTS TO WHICH WE HAVE REFERRED YOU. THE
ACTUAL TERMS OF THE MERGER ARE CONTAINED IN THE MERGER AGREEMENT, A COPY OF
WHICH IS ATTACHED AS APPENDIX A TO THIS PROXY STATEMENT.

THE COMPANIES

IBP

IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049

IBP, inc., a Delaware corporation incorporated on June 23, 1969, is one of
the world's largest manufacturers of fresh meats and frozen and refrigerated
food products, with 1999 annual sales in excess of $14.0 billion. IBP has
two primary business segments: Fresh Meats, which produces boxed beef, pork,
hides and other allied products; and Foodbrands, which manufactures various
value added products including pepperoni, pizza toppings, appetizers,
prepared meals, Mexican foods, soups, sauces, and branded and processed
meats. IBP has over 60 manufacturing locations in the United States and
internationally. IBP has sales offices in North America, Central America,
Europe, and Asia. IBP employs approximately 50,000 people.

RAWHIDE HOLDINGS

Rawhide Holdings Corporation
277 Park Avenue
New York, New York 10172
(212) 892-3000

Rawhide Holdings was incorporated on September 12, 2000 for purposes of
acting as a holding company of IBP after completion of the merger. It has
not carried on any activities to date other than those incident to its
formation and completion of the merger. All of the outstanding stock of
Rawhide Holdings is owned by DLJ Merchant Banking Partners III, L.P. and its
affiliates (which are collectively referred to as "DLJMB" in this proxy
statement).
RAWHIDE ACQUISITION

Rawhide Acquisition Corporation
277 Park Avenue
New York, New York 10172
(212) 892-3000

Rawhide Acquisition was incorporated on September 1, 2000 for the sole
purpose of completing the merger. It has not carried on any activities to
date other than those incident to its formation and completion of the
merger. All of the outstanding capital stock of Rawhide Acquisition is owned
by Rawhide Holdings.

TRANSACTIONS IMMEDIATELY PRIOR TO THE MERGER (PAGE 45)

Immediately prior to the merger:

- DLJMB will purchase some of the shares of IBP common stock owned by
Archer-Daniels-Midland Company, or ADM, Booth Creek Partners Limited III,
LLLP, or Booth Creek, and Jeffrey J. Joyce for $22.25 per share.

- ADM, Booth Creek and Jeffrey J. Joyce will acquire shares of Rawhide
Holdings common stock in exchange for their remaining shares of IBP common
stock valued at $22.25 per share, and may also acquire senior discount
debentures of Rawhide Holdings and warrants to acquire Rawhide Holdings
common stock for cash.

- DLJMB will purchase shares of Rawhide Holdings common stock, senior
discount debentures of Rawhide Holdings and warrants to acquire Rawhide
Holdings common stock. The purchase price will be payable in cash and in
shares of IBP common stock valued at $22.25 per share.

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- Robert L. Peterson, Richard L. Bond and certain other members of IBP
management will acquire shares of Rawhide Holdings common stock. The
purchase price will be payable in cash and in shares of IBP common stock
valued at $22.25 per share.

THE MERGER (PAGE 46)

- you will be entitled to receive $22.25 in cash for each of your shares of
IBP common stock outstanding at the time of the merger;

- all outstanding options will be cancelled and holders of such options will
have the right to receive an amount in cash equal to $22.25 less the per
share exercise price of the option;

- shares of IBP common stock held by Rawhide Holdings will be cancelled; and

- each share of Rawhide Acquisition common stock will be converted into one
share of common stock of IBP, the surviving corporation.

VOTE REQUIRED (PAGE 12)

Under Delaware law, approval by our shareholders of the merger proposal will
require the affirmative vote of a majority of the outstanding shares of our
common stock entitled to vote at the special meeting.

In addition, under the terms of the merger agreement, it is a condition to
IBP's obligation to consummate the merger that the merger proposal be approved
by a majority of the outstanding shares voting at the special meeting other than
shares owned beneficially by DLJMB, ADM, Booth Creek, Jeffrey J. Joyce, Robert
L. Peterson, Richard L. Bond or an affiliate of any of the foregoing (except as
to any such affiliate shares owned in a financing or advisory capacity). This
condition may be waived by IBP, provided that it gives written notice of such
waiver to the stockholders at least 10 business days prior to the special
meeting.

CONSEQUENCES OF THE MERGER (PAGE 46)

As a result of the merger:

- 100% of the shares of common stock of the surviving corporation will be
owned by Rawhide Holdings;

- approximately 61.3% of Rawhide Holdings common stock outstanding
immediately after the merger will be owned by DLJMB, 24.5% by ADM, 4.4% by
Booth Creek and Jeffrey J. Joyce, and 9.8% by Robert L. Peterson, Richard
L. Bond and certain other members of IBP management;

- you will no longer have any interest in, and will no longer be a
shareholder of IBP, and therefore you will not be able to participate in
IBP's future earnings and growth; and

- IBP's common stock will no longer be traded on the New York Stock Exchange
and will not be eligible for listing or trading on any exchange, and the
registration of IBP's common stock under the Securities Exchange Act of
1934 will terminate.

RECOMMENDATIONS OF IBP'S BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE (PAGE 26)

IBP's board of directors (excluding persons associated with the buyout
group) and special committee believe that the terms of the proposed merger and
the terms and provisions of the merger agreement are fair to and in the best
interests of IBP shareholders and recommend that the IBP shareholders vote "FOR"
the approval of the merger proposal. Board members Robert L. Peterson, Richard
L. Bond and Eugene D. Leman each abstained from voting on this matter because of
their proposed financial interest in the buyout group and John S. Chalsty
abstained because of his relationship with DLJMB.

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REASONS FOR THE MERGER (PAGE 26)

In reaching the conclusion to approve and recommend the proposed merger and
the merger agreement, the board of directors considered, among other factors,
the following:

- A special committee composed entirely of directors with no financial
interest in the buyout group determined that the proposed merger and
merger agreement are fair and in the best interests of IBP shareholders.

- The special committee unanimously recommended to the board of directors
that the merger agreement and merger be approved.

- The factors described in substantive detail on pages 27 through 31.

VOTING AGREEMENT (PAGE 63)

ADM, Booth Creek and Jeffrey J. Joyce have entered into a voting agreement
with Rawhide Holdings and Rawhide Acquisition which provides that they will vote
their shares to approve the merger proposal. The voting agreement is attached as
Appendix B to this proxy statement.

In addition, all of our directors and executive officers have indicated to
us that they intend to vote their shares in favor of the merger proposal.

DISSENTERS' RIGHTS (PAGE 64)

Holders of IBP common stock who do not vote in favor of the merger proposal
have the right to a judicial appraisal of the fair value of their IBP common
stock in connection with the merger.

FAIRNESS OPINION OF J.P. MORGAN SECURITIES, INC. (PAGE 33)

The special committee received a written opinion from J.P. Morgan
Securities Inc. as to the fairness, from a financial point of view, of the
merger consideration to the holders of IBP common stock. The full text of the
written opinion of J.P. Morgan Securities Inc. dated October 1, 2000 is attached
to this proxy statement as Appendix C, and you should read it carefully in its
entirety. The opinion of J.P. Morgan Securities Inc. is directed to the special
committee and does not constitute a recommendation to you as to how you should
vote with respect to the merger proposal.

INTERESTS OF CERTAIN PERSONS IN THE MERGER (PAGE 41)

In considering the recommendations of the special committee and the board of
directors, you should be aware that certain of IBP's officers and directors have
interests in the merger or have certain relationships, including those referred
to below, that present actual or potential, or the appearance of actual or
potential, conflicts of interest in connection with the merger, including:

- the financial interest of Robert L. Peterson, Richard L. Bond and certain
other members of IBP management as a result of the shares of Rawhide
Holdings common stock to be received by them immediately prior to the
merger in exchange for both cash and shares of IBP common stock;

- the interest of some of IBP's employees in the option plan, phantom equity
arrangement and management investment program to be established for such
employees following the merger;

- the interest of certain officers and directors in stock options and
restricted shares that will vest upon completion of the merger and entitle
the holders to cash payments;

- the right of certain executive officers to severance payments under
specified conditions if their employment terminates within a certain
period after the merger is completed;

- the employment agreements that Rawhide Acquisition will enter into with
Robert L. Peterson and Richard L. Bond;

- the interest of members of IBP management in a transaction bonus pool

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to be allocated immediately after the effective time of the merger; and

- the obligation of Rawhide Holdings to cause IBP to continue to provide
certain employee benefits, indemnification and related insurance coverage
to directors and officers of IBP following the merger.

The special committee and the board of directors were aware of these actual
or potential conflicts of interest and considered them along with other matters
in approving the merger.

CONDITIONS TO THE MERGER (PAGE 60)

The obligations of IBP, Rawhide Holdings and Rawhide Acquisition to complete
the merger are subject to certain conditions. After approval of the merger
agreement by IBP shareholders, no amendment or waiver (including of any
condition of the merger) can be made that alters the consideration to be
received for IBP common stock or that would adversely affect the rights of IBP
shareholders, without their further approval.

TERMINATION OF THE MERGER AGREEMENT (PAGE 61)

The merger agreement may be terminated before the merger is completed,
whether before or after approval by the IBP shareholders, in certain specified
events.

TERMINATION FEES (PAGE 62)

IBP has agreed to pay Rawhide Holdings $59.0 million in cash if any of the
following events occur:

- the merger agreement is terminated by Rawhide Holdings because:

- IBP's board of directors has withdrawn, modified or amended in a manner
adverse to Rawhide Holdings its approval or recommendation of the
merger;

- IBP's board of directors has recommended or endorsed an alternative
transaction; or

- IBP has failed to call a special meeting of its shareholders to vote
upon the merger proposal or has failed to include in this proxy
statement the recommendation of its board of directors to approve the
merger proposal; or

- the merger agreement is terminated by IBP, because its board of directors
has authorized IBP to enter into another transaction that is superior to
the merger.

In addition, IBP must pay Rawhide Holdings $59.0 million in cash if all of
the following events occur:

- the merger agreement is terminated because IBP's shareholders do not
approve the merger or the merger is not completed by March 31, 2001;

- at the time of such termination, or at the time of the special meeting, as
the case may be, there is an outstanding alternative transaction proposal
that is superior to the merger; and

- within 6 months of the termination of the merger agreement, IBP enters
into the alternative transaction or another transaction which is superior
to the alternative transaction.

FINANCING; SOURCE OF FUNDS (PAGE 49)

The total amount of funds required to (1) fund the payment of the merger
consideration and the surrender of outstanding stock options, (2) refinance some
of IBP's existing indebtedness, and (3) pay fees and expenses in connection with
the merger, is estimated to be approximately $3,331.3 million.

Rawhide Holdings and Rawhide Acquisition intend to obtain these funds from
concurrent equity and debt financings, as follows:

- approximately $1,281.3 million of Rawhide Holdings common stock, senior
discount debentures of Rawhide Holdings and warrants to purchase Rawhide
Holdings common stock will be purchased by DLJMB and its affiliates, ADM,
Booth Creek and Jeffrey J. Joyce, as well as Robert L. Peterson, Richard
L. Bond and

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certain other members of IBP management;

- approximately $1,150.0 million of term loans will be provided to IBP, as
the surviving company after the merger, under a $1,650.0 million senior
secured credit facility, consisting of a $500.0 million five and
one-half-year amortizing term loan facility, a $650.0 million seven-year
amortizing term loan facility and a $500.0 million five and one-half-year
revolving loan facility, each to be arranged by DLJ Capital
Funding, Inc.; and

- approximately $900.0 million will be raised through a public offering or
private placement of senior unsecured notes and senior subordinated notes
of IBP, as the surviving company, or, if it is not possible to raise such
funds, through senior unsecured bridge notes and senior subordinated
bridge notes to be purchased by DLJ Bridge Finance, Inc.

In addition, certain outstanding indebtedness and existing capital leases in
an aggregate principal amount of approximately $651.7 million will remain
outstanding after the merger.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES (PAGE 47)

The exchange of your IBP shares for cash in the merger will be a taxable
event for federal income tax purposes, and may also be a taxable transaction
under state, local and foreign tax laws. For federal income tax purposes, you
generally will recognize gain or loss in an amount equal to the difference
between the cash you receive and your tax basis in the shares of IBP common
stock you surrender in the merger. That gain or loss will be capital gain or
loss if you hold the shares of IBP common stock as a capital asset. This summary
does not describe the tax consequences to Rawhide Holdings or shareholders that
are part of, or associated with, the buyout group.

SHAREHOLDER LAWSUITS CHALLENGING THE MERGER (PAGE 51)
Fourteen actions have been filed in the Delaware Court of Chancery, and one
in the United States District Court for the District of South Dakota, by persons
alleging to be shareholders of IBP. Though the complaints are not identical, the
named defendants in these actions generally include IBP, each of IBP's
directors, DLJ and ADM. Seeking to represent a purported class of IBP's
shareholders excluding the defendants, plaintiffs generally allege that IBP's
directors, aided and abetted by the other defendants, have breached their
fiduciary duties to plaintiffs and the alleged class by (1) agreeing to sell IBP
at an inadequate price (2) advancing their personal interests at the expense of
IBP's public shareholders and (3) erecting barriers to competing bids, including
the $59 million termination fee. The complaints request preliminary and
permanent injunctive relief against consummation of the merger, rescission of
the merger in the event it is consummated, monetary damages and an award of
attorneys' fees. We believe that the actions are without merit and intend to
contest the actions vigorously.

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QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: WHAT IS THE PROPOSED TRANSACTION?

A: Rawhide Acquisition Corporation will be merged with and into IBP. IBP will
continue as the surviving company and a wholly-owned subsidiary of Rawhide
Holdings Corporation after the merger.

Q: WHAT WILL I RECEIVE IN THE MERGER?

A: You will be entitled to receive $22.25 in cash for each of your shares of
IBP common stock outstanding at the time of the merger.

Q: WHO WILL OWN IBP AFTER THE MERGER?

A: As a result of the merger, IBP will become a privately held company and
wholly-owned subsidiary of Rawhide Holdings. Rawhide Holdings will be owned
by DLJ Merchant Banking Partners III, L.P. and certain affiliated funds
(which are collectively referred to as "DLJMB" in this proxy statement), as
well as Archer-Daniels-Midland Company, or ADM, Booth Creek Partners Limited
III, LLLP, or Booth Creek, and Jeffrey J. Joyce, as well as Robert L.
Peterson, Richard L. Bond and certain other members of IBP management.
Messrs. Peterson and Bond will continue after the merger as IBP board
members and executive officers.

Q: WHAT WILL HAPPEN TO THE MARKET FOR IBP COMMON STOCK AFTER THE MERGER?

A: At the effectiveness of the merger, trading in IBP common stock on the New
York Stock Exchange will cease and IBP common stock will no longer be
eligible for listing or trading on any exchange. The registration of IBP's
common stock under the Securities Exchange Act of 1934 will terminate.

Q: WHY IS THE BOARD OF DIRECTORS RECOMMENDING THAT I VOTE FOR THE MERGER
PROPOSAL?

A: IBP's board of directors, based on the unanimous recommendation of the
special committee (composed of five directors with no financial interest in
the buyout group) believes that the terms of the proposed merger and the
terms and provisions of the merger agreement are fair to and in the best
interests of IBP shareholders. ACCORDINGLY, THE BOARD OF DIRECTORS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE MERGER PROPOSAL (ROBERT L. PETERSON, RICHARD L. BOND AND
EUGENE D. LEMAN EACH ABSTAINED BECAUSE OF THEIR PROPOSED FINANCIAL INTEREST
IN THE BUYOUT GROUP, AND JOHN S. CHALSTY ABSTAINED DUE TO HIS RELATIONSHIP
WITH DLJMB). To review the background and reasons for the merger in greater
detail, see pages 14 through 33 of this proxy statement.

Q: WHY WAS THE SPECIAL COMMITTEE FORMED?

A: In view of the role expected to be played by members of IBP's senior
management in the merger and the board's fiduciary duty (upon receiving
DLJMB's indication of interest) to explore the desirability of entertaining
a proposal and informing itself about other available alternatives, the
board of directors formed a special committee consisting of directors with
no financial interest in the buyout group. This special committee was formed
for the purpose of evaluating the desirability of entertaining a proposal,
determining whether to solicit other third-party indications of interest and
negotiating the price and terms of any proposal. The special committee
independently selected and retained legal and financial advisors to assist
it in its deliberations and sought to achieve the best price and terms
reasonably available for IBP's shareholders (excluding persons associated
with the buyout group).

Q: WHY ARE ROBERT L. PETERSON, RICHARD L. BOND AND OTHER MEMBERS OF IBP
MANAGEMENT RETAINING AN OWNERSHIP INTEREST IN IBP FOLLOWING THE MERGER?

A: Because Messrs. Peterson and Bond, and certain other members of IBP
management, have been integral to IBP's success in the past and DLJMB
believes that their involvement is integral to IBP's future

6
<PAGE>
success, DLJMB wants to ensure that those persons have a financial interest
in IBP going forward.

Q: WHAT WILL HAPPEN TO MY DIVIDENDS?

A: Regular quarterly dividends will continue until the completion of the
merger.

Q: WHAT WILL HAPPEN TO MY STOCK OPTIONS?

A: At the effective time of the merger, all outstanding options to purchase
shares of IBP common stock will be cancelled. If you own options to purchase
shares of IBP common stock, you will be entitled to receive at the effective
time of the merger, for each share subject to an option with a per share
exercise price less than $22.25, the difference between $22.25 and the per
share exercise price of that option, regardless of whether the option is
fully vested. The amount you will receive, however, will be reduced to the
extent of any federal and state income and payroll tax withholding that is
due. You will not receive anything in respect of the cancellation of any
option with a per share exercise price greater than or equal to $22.25.

Q: WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE MERGER TO ME?

A: In the merger, you will receive an immediate cash premium for your shares of
IBP common stock that you may not otherwise receive in the future. The
merger consideration of $22.25 per share represents a 21.5% premium over the
$18.31 closing price of IBP common stock on September 29, 2000, the last
trading day before the day the merger agreement was announced. In addition,
you will not bear the risk of any decrease in the value of IBP and you will
be able to dispose of your IBP shares without incurring any brokerage fees.
You will not, however, have the opportunity to participate in IBP's future
earnings and growth.

Q: WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE MERGER TO THE SHAREHOLDERS
OF RAWHIDE HOLDINGS AFTER THE MERGER?

A: Upon completion of the merger, IBP, as the surviving corporation, will be a
wholly-owned subsidiary of Rawhide Holdings. DLJMB and the other
shareholders of Rawhide Holdings after the merger will have the opportunity
to participate in IBP's future earnings and growth, but they will bear the
risk of any decrease in the value of IBP after the merger.

Q: WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?

A: We are working to complete the merger as quickly as possible. We expect to
complete the merger (if it is approved by the stockholders of IBP) within
several days after the special meeting.

Q: WHAT HAPPENS IF I SELL MY IBP SHARES BEFORE THE SPECIAL MEETING?

A: The record date for the special meeting is earlier than the expected date of
the merger. If you transfer your IBP shares after the record date but before
the merger, you will retain your right to vote at the special meeting but
the right to receive the $22.25 in cash per share will pass to the person to
whom you transferred your shares.

Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGER?

A: The exchange of your IBP shares for cash in the merger will be a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under state, local and foreign tax laws. For more information
about the tax consequences of the merger, see pages 47 through 49 of this
proxy statement.

Q: WHAT DO I NEED TO DO NOW?

A: Please complete, date and sign your proxy card and then mail it in the
enclosed postage-paid envelope as soon as possible, so that your shares may
be represented at the special meeting. You may also choose to vote by
telephone by calling the toll-free number located on your proxy card, or via
the Internet by visiting the website set forth in the instructions on your
proxy card.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. Soon after the merger is completed, we will send you written
instructions explaining how to exchange your IBP share certificates for
cash.

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<PAGE>
QUESTIONS AND ANSWERS ABOUT VOTING AT THE SPECIAL MEETING

Q: WHAT IS THE DATE, TIME AND PLACE OF THE MEETING?

A: The special meeting of shareholders will be held on , 2000, at
a.m., local time, at IBP World Headquarters, 800 Stevens Port Drive,
Dakota Dunes, South Dakota 57049.

Q: WHO IS ENTITLED TO VOTE AT THE SPECIAL MEETING?

A: Shareholders as of the close of business on , 2000 are entitled
to vote at the special meeting.

Q: HOW MANY SHARES NEED TO BE REPRESENTED AT THE MEETING?

A: The holders of a majority of the outstanding shares entitled to vote at the
special meeting ( shares) must be present in person or
represented by proxy to constitute a quorum for the transaction of business.
If you vote by proxy card, by telephone, via the Internet or in person at
the special meeting, you will be considered part of the quorum.

Q: HOW DO I VOTE?

A: You can vote by telephone, via the Internet or sign and mail your proxy
card. See the proxy card for specific instructions for telephone or Internet
voting. You may also vote in person at the special meeting.

Q: IF MY SHARES ARE HELD IN "STREET NAME", WILL MY BANK, BROKER OR OTHER NOMINEE
VOTE MY SHARES FOR ME?

A: Generally, your bank, broker or other nominee will not have the power to
vote your shares. Such nominee will vote your shares ONLY if provided with
instructions on how to vote. Any failure to instruct your nominee on how to
vote in favor of the merger will have the effect of a vote "against" the
merger proposal for purposes of determining whether the approval requirement
under Delaware law has been satisfied. You should follow the directions
provided by your nominee on how to instruct your nominee to vote your
shares.

Q: MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD OR VOTED BY
TELEPHONE OR VIA THE INTERNET?

A: Yes. You may revoke your vote at any time before the special meeting by:

- giving written notice of your revocation to IBP's Secretary;

- filing a revoking instrument or a duly executed proxy bearing a later date
with IBP's Secretary;

- voting again by telephone or via the Internet before the meeting; or

- attending the special meeting and voting in person.

Q: HOW MANY VOTES ARE REQUIRED TO APPROVE THE MERGER PROPOSAL?

A: Under Delaware law, approval by our shareholders of the merger proposal will
require the affirmative vote of a majority of the outstanding shares of IBP
common stock entitled to vote at the special meeting.

In addition, under the terms of the merger agreement, it is a condition to
IBP's obligation to consummate the merger that the merger proposal be
approved by a majority of the outstanding shares voting at the special
meeting other than shares owned beneficially by DLJMB, ADM, Booth Creek,
Jeffrey J. Joyce, Robert L. Peterson, Richard L. Bond or an affiliate of any
of the foregoing (except as to any such affiliate shares owned in a
financing or advisory capacity). This condition may be waived by IBP,
provided that it gives written notice of such waiver to the stockholders at
least 10 business days prior to the special meeting.

Q: WHAT RIGHTS DO I HAVE IF I OPPOSE THE MERGER PROPOSAL?

A: If you oppose the merger proposal and do not vote in favor of it and the
merger is completed, you may dissent and seek appraisal of the fair value of
your shares under Delaware law. You must, however, comply with all of the
required procedures explained on pages 64 through 66 of this proxy statement
and in Appendix D to this proxy statement.

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<PAGE>
WHO CAN HELP ANSWER YOUR QUESTIONS

If you have more questions about the merger or would like additional copies
of this proxy statement, you should contact IBP's Investor Relations Department
at the following address:

Investor Relations Department
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
(605) 235-2587
Email: [email protected]

If you have additional questions about the solicitation of your proxy, you
should contact:

Corporate Investor Communications, Inc.

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<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement and the documents to which we refer you and incorporate
into this proxy statement by reference contain forward-looking statements. In
addition, from time to time, we or our representatives may make forward-looking
statements orally or in writing. We base these forward-looking statements on our
expectations and projections about future events, which we derive from the
information currently available to us. Such forward-looking statements relate to
future events or our future performance, including: our financial performance;
our growth in revenue and earnings; our ability to integrate successfully the
operations of recent acquisitions into ours; and our new product and service
offerings.

You can identify forward-looking statements by those that are not historical
in nature, particularly those that use terminology such as "may," "will,"
"should," "expects," "anticipates," "contemplates," "estimates," "believes,"
"plans," "projected," "predicts," "potential" or "continue" or the negative of
these or similar terms. In evaluating these forward-looking statements, you
should consider various factors, including: our ability to continue to diversify
our revenue stream; and the competitive environment of our business. These and
other factors may cause our actual results to differ materially from any
forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events
discussed in this proxy statement, the documents to which we refer you and other
statements made from time to time from us or our representatives, may not occur,
and actual events and results may differ materially and are subject to risks,
uncertainties and assumptions about us. We are not obligated to publicly update
or revise any forward-looking statement, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this proxy statement, the
documents to which we refer you and other statements made from time to time by
us or our representatives, might not occur.

10
<PAGE>
INFORMATION CONCERNING THE SPECIAL MEETING

DATE, TIME AND PLACE

The special meeting will be held on , 2000, at a.m., local
time, at IBP World Headquarters, 800 Stevens Port Drive, Dakota Dunes, South
Dakota 57049.

PURPOSE

At the special meeting, you will be asked to vote on a proposal to approve
and adopt the merger agreement and the merger. A copy of the merger agreement is
attached as Appendix A to this proxy statement.

RECORD DATE AND QUORUM REQUIREMENT

We have fixed the close of business on , 2000 as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
special meeting. At the close of business on , 2000, there were
shares of our common stock issued and outstanding held by
approximately holders of record.

Each holder of record of our common stock, par value $0.05 per share, at the
close of business on , 2000 is entitled to one vote for each share
then held on each matter submitted to a vote of shareholders.

The holders of a majority of the outstanding shares entitled to vote at the
special meeting ( shares) must be present in person or represented by
proxy to constitute a quorum for the transaction of business. If you vote by
proxy card, by telephone, via the Internet or in person at the special meeting,
you will be considered part of the quorum.

VOTING PROCEDURES

VOTING BY PROXY

Holders of record can ensure that their shares are voted at the special
meeting by submitting proxy instructions by telephone, by Internet, or by
completing, signing, dating and delivering the enclosed proxy card in the
envelope provided. Submitting instructions by any of these methods will not
affect the right to attend the special meeting and vote. The telephone and
Internet voting procedures are designed to authenticate stockholders'
identities, to allow stockholders to give their voting instructions and to
confirm that stockholders' instructions have been recorded properly and have
been authorized by the stockholder. Section 212(c)(2) of the Delaware General
Corporation Law authorizes the use of electronic transmission, such as
transmissions over the Internet, to grant a proxy.

<TABLE>
<S> <C>
By telephone: Call toll-free the number specified on your proxy card and
follow the instructions. You will need to give the personal
identification number contained on your proxy card.
By Internet: Go to the website specified on your proxy card and follow
the instructions. You will need to give the personal
identification number contained on your proxy card.
In writing: Complete, sign, date and return your proxy card in the
enclosed envelope.
</TABLE>

If you return a signed proxy card but do not provide voting instructions,
the persons named as proxies on the proxy card will vote "FOR" the approval and
adoption of the merger agreement and the merger.

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<PAGE>
REVOKING YOUR PROXY. You may revoke your proxy at any time before it is
voted by:

- giving notice, in person or in writing, to the Secretary of IBP;

- delivering to the Secretary of IBP, at 800 Stevens Port Drive, Dakota
Dunes, South Dakota 57049, a revoking instrument or a duly executed proxy
indicating a contrary vote bearing a later date;

- voting again by telephone or via the Internet before the special meeting;
or

- attending the special meeting and voting in person.

ASSISTANCE. If you need help in changing or revoking a proxy, please
contact Corporate Investor Communications, Inc. at the address or phone number
provided in this document under the caption "Who Can Help Answer Your
Questions."

VOTING AT THE SPECIAL MEETING

The method by which you vote now will not limit your right to vote at the
special meeting if you decide to attend in person. If your shares are held in
the name of a bank, broker or other nominee, you must obtain a proxy, executed
in your favor, from the holder of record to be able to vote at the special
meeting.

HOW SHARES ARE VOTED

Subject to revocation, all shares represented by each properly executed
proxy received by the Secretary of IBP will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated, the shares
will be voted to approve the merger proposal and in such manner as the persons
named on the proxy card in their discretion determine upon such other business
as may properly come before the special meeting.

VOTE REQUIRED

Under Delaware law, approval by IBP's shareholders of the merger proposal
will require the affirmative vote of a majority of the outstanding shares of IBP
common stock entitled to vote at the special meeting.

Abstentions and broker "non-votes" are counted as present and entitled to
vote for purposes of determining a quorum. However, such abstentions and broker
"non-votes" will be disregarded in determining whether the voting requirement
under the merger agreement referred to above has been satisfied and will have
the same effect as a vote "against" the merger proposal for purposes of
determining whether the approval requirement under Delaware law has been
satisfied. A broker "non-vote" occurs when a bank, broker or other nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power for that particular
item and has not received instructions from the beneficial owner.

If there are insufficient votes to approve the merger proposal at the
special meeting, proxies voted in favor of approval of the merger proposal and
proxies as to which no voting instructions are given

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<PAGE>
may be voted to adjourn the special meeting in order to solicit additional
proxies in favor of approval of the merger proposal. If the special meeting is
adjourned for any purpose, at any subsequent reconvening of the special meeting,
all proxies will be voted in the same manner as such proxies would have been
voted at the original convening of the meeting (except for any proxies which
have been revoked or withdrawn).

VOTING AGREEMENT

ADM, Booth Creek and Jeffrey J. Joyce have entered into a voting agreement
with Rawhide Holdings and Rawhide Acquisition which provides that they will vote
their shares of IBP common stock to approve the merger proposal. The voting
agreement relates to 12,951,400 shares owned by ADM, 3,644,923 shares owned by
Booth Creek and 643,030 shares owned by Mr. Joyce, representing in the aggregate
approximately 16.4% of IBP common stock outstanding. The voting agreement is
attached as Appendix B to this proxy statement and is described in more detail
elsewhere in this proxy statement under the caption "The Voting Agreement."

In addition, all of our directors and executive officers have indicated to
us that they intend to vote their shares in favor of the merger proposal.

VOTING ON OTHER MATTERS

If any other matters are properly presented at the special meeting for
consideration, the persons named in the proxy will have the discretion to vote
on those matters for you. As of the date of this proxy statement, we do not know
of any other matter to be raised at the special meeting.

PROXY SOLICITATION

IBP will bear the cost of soliciting proxies. These costs include the
preparation, assembly and mailing of this proxy statement, the notice of special
meeting of shareholders and the enclosed proxy card, as well as the cost of
forwarding such material to the beneficial owners of IBP common stock. Our
directors, officers and regular employees may, without compensation other than
their regular compensation, solicit proxies by telephone, e-mail, facsimile or
personal conversation. We may also reimburse brokerage firms and others for
expenses in forwarding proxy material to the beneficial owners of common stock.
IBP has retained a proxy solicitation firm, Corporate Investor Communications,
Inc., to assist with the solicitation of proxies for a fee of $8,000.00, plus
reimbursement of reasonable out-of-pocket expenses.

PLEASE DO NOT SEND ANY CERTIFICATES REPRESENTING SHARES OF IBP COMMON STOCK
WITH YOUR PROXY CARD. IF THE MERGER IS COMPLETED, THE PROCEDURE FOR THE EXCHANGE
OF CERTIFICATES REPRESENTING SHARES OF IBP COMMON STOCK WILL BE AS DESCRIBED IN
THIS PROXY STATEMENT. WE REFER YOU TO THE SECTIONS CAPTIONED "THE MERGER
AGREEMENT--EXCHANGE AND PAYMENT PROCEDURES" AND "THE MERGER AGREEMENT--
TRANSFERS OF SHARES" CONTAINED ELSEWHERE IN THIS PROXY STATEMENT.

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<PAGE>
SPECIAL FACTORS

BACKGROUND OF THE MERGER

In late February 1999, Larry Shipley, IBP's Chief Financial Officer,
contacted Geoff Stern of IBP's long-time financial advisor, Donaldson, Lufkin &
Jenrette Securities Corporation, or DLJSC, as a result of IBP's declining stock
price. Over the course of their conversations, Mr. Shipley and Mr. Stern had
general and preliminary discussions regarding the feasibility of a leveraged
buyout transaction in which IBP would be taken private. They also reviewed a
variety of other strategic alternatives intended to increase IBP's stock price,
which IBP perceived as being undervalued in the public market.

After determining a leveraged buyout might be viable, representatives from
DLJSC contacted DLJMB in spring of 1999 to inquire whether DLJMB would be
interested in providing financing for a potential leveraged buyout of IBP.
DLJMB's immediate reaction was not enthusiastic.

In June 1999, Ari Benacerraf of DLJMB was invited to IBP's world
headquarters, where he met with Robert L. Peterson, IBP's Chairman and Chief
Executive Officer, Richard L. Bond, IBP's President and Chief Operating Officer,
and Mr. Shipley, to discuss the feasibility of a leveraged buyout or similar
transaction. There was no definitive conclusion to, or follow up from, this
meeting other than discussions between Mr. Shipley and DLJSC. In the period
following the meeting, as IBP's stock price improved and as discussions
regarding IBP's acquisition of Corporate Brand Foods America, Inc., or CBFA,
began to intensify, no further action was taken.

During this period of discussions among IBP, DLJSC and DLJMB, IBP held its
board of directors meeting in April 1999. At the April 1999 board of directors
meeting, Mr. Peterson distributed to the board members an informational booklet
prepared by DLJSC which examined share buyback alternatives. Mr. Peterson
commented that board members should review the booklet, and that it would be
discussed in more detail at some future time.

At the July 1999 IBP board of directors meeting, the subject of stock
buybacks was discussed briefly. In light of the upward movement in the stock
price at the time, interest in discussing potential actions had waned, and the
board determined to examine this issue in the future if appropriate.

In October 1999, Joseph W. Luter III, the chief executive officer of
Smithfield Foods Inc., contacted Mr. Peterson to discuss the possibility of a
merger between Smithfield and IBP. Mr. Peterson agreed to examine the
possibility but noted that he was concerned about antitrust and political issues
that might arise from such a proposed merger. Given the perceived difficulties
associated with completing such a transaction from an antitrust and political
perspective, and with the acquisition of CBFA under consideration, the
discussions with Smithfield regarding a potential merger were not pursued.

On January 5, 2000, Mr. Peterson spoke with a representative of ADM to
discuss the recently announced proposed acquisition of CBFA by IBP and the
impact of the "pooling" method of accounting with respect to such acquisition on
ADM's ability to buy and sell its shares of IBP. In addition, Mr. Peterson also
had a general discussion regarding IBP, including IBP's direction, the price of
IBP's common stock and other matters related to IBP's business.

On January 12, 2000 and January 18, 2000, representatives from DLJSC, noting
the decrease in IBP's share price, approached IBP in their capacity as IBP's
investment bankers to discuss a variety of strategic alternatives intended to
increase IBP's stock price, which DLJSC perceived as being undervalued in the
public market. Among the strategic alternatives DLJSC mentioned were a sale to a
strategic buyer, a leveraged buyout, and a leveraged recapitalization. On
February 24, 2000, representatives from DLJSC again approached IBP to discuss
generally the strategy of a significant share buyback. IBP did not elect to
pursue at that time any of the alternatives considered at these meetings.

14
<PAGE>
In the spring of 2000, George N. Gillett, Jr., the General Managing Partner
of Booth Creek, contacted Mr. Shipley, and then Mr. Peterson, to discuss
potential strategic alternatives to improve IBP's stock price. Among the
alternatives discussed were acquisitions, a share buyback program and a
leveraged buyout or similar transaction in which IBP would be taken private.
Mr. Gillett asked Mr. Shipley whether IBP management would be receptive if he
proposed such a transaction. Mr. Shipley responded that IBP would consider any
proposal if its feasibility were established. Shortly thereafter, Booth Creek
completed its own internal analysis of the feasibility of each of the
alternatives and contacted various investment banking firms, including DLJSC, to
determine if any of them might be interested in working with Booth Creek to
sponsor such transactions.

Throughout the spring of 2000, Booth Creek requested that Mr. Peterson
attend certain meetings it had arranged with a few investment banking firms to
discuss various strategic alternatives. Specifically, on April 5, 2000,
Mr. Peterson met with Mr. Gillett and representatives of Salomon Smith Barney,
and on May 24, 2000, Mr. Peterson met with Mr. Gillett and representatives of
Chase. In both such meetings, discussions focused on strategic alternatives,
including a possible leveraged buyout transaction. Later in the day on May 24,
2000, Mr. Peterson had a meeting with DLJSC to discuss the results of his
meeting with Chase, and the possibility of a leveraged buyout transaction was
discussed.

On June 29, 2000, representatives from DLJMB met with Messrs. Peterson, Bond
and Shipley, to suggest that DLJMB pursue the possibility of sponsoring a
leveraged buyout of IBP, together with certain senior members of IBP's
management.

On July 5, 2000, DLJMB signed a confidentiality agreement in which DLJMB
agreed not to disclose confidential information it obtained as a result of its
due diligence and negotiations with IBP. Beginning on July 5, 2000, DLJMB,
together with its counsel, accountants and other representatives, began its due
diligence review of IBP and its businesses.

On July 18, 2000, the evening prior to a regularly scheduled meeting of the
board of directors of IBP, DLJMB advised the board that DLJMB was considering
the possibility of making a proposal to acquire IBP. DLJMB indicated that they
would only proceed and determine whether to make such an offer if the board was
agreeable and if management was receptive to such a proposal. DLJMB did not
provide any specific proposals, and the board did not respond to DLJMB's
statements.

At the meeting of the board of directors of IBP held on July 19, 2000, the
board determined that, in light of the continuing low prices for IBP's common
stock and the failure of the markets to respond favorably to IBP's business
initiatives, it might be in the interests of IBP shareholders for IBP to receive
such a proposal, if one were made. The board unanimously decided, in view of the
role expected to be played by members of IBP senior management in any such
proposal, to create a special committee of independent directors to evaluate the
desirability of entertaining such a proposal, and to negotiate the terms of any
such proposal in order to achieve for IBP shareholders the best price and terms
reasonably available to them. Wendy L. Gramm, John J. Jacobson, Jr., Martin A.
Massengale, Michael L. Sanem and Jo Ann R. Smith were elected as members of the
special committee, with Ms. Smith elected as its Chairperson. Shortly
thereafter, the special committee retained J.P. Morgan Securities Inc. as its
financial advisor because of its broad investment banking experience, and
Wachtell, Lipton, Rosen & Katz as its legal advisor.

In the latter part of July and the early part of August 2000, the special
committee heard presentations from its legal advisors with respect to its legal
responsibilities and from J.P. Morgan with respect to the methodologies it would
use in valuing the company. The special committee, on the advice of its counsel,
also requested that the board of directors adopt a comprehensive resolution
clarifying that the special committee had the authority to contact third parties
with respect to their interest in a business combination with IBP and to pursue
a recapitalization of IBP, and that it had the full power of the board of
directors as to matters within the special committee's jurisdiction, other than
the authority to bind IBP with respect to a sale, other business combination or
recapitalization, which

15
<PAGE>
actions would require action by the full board of directors. The special
committee was advised at its August 8 meeting that counsel for IBP had agreed to
submit this resolution to the board of directors, and on August 30 the special
committee was advised that a unanimous consent of the board of directors
adopting the revised resolution had been approved.

On August 8, 2000, the special committee met and heard a presentation by
Messrs. Peterson, Bond and Shipley with respect to management's projections for
IBP. These projections are summarized elsewhere in this proxy statement under
the caption "Certain Financial Projections". The members of the special
committee questioned management about the prospects for the business, the
factors that could impact future results and the need for significant capital
expenditures. The members of management were then excused from the meeting. It
was discussed at the meeting that DLJMB had stated that if the special committee
initiated discussions with other potential buyers, DLJMB would not submit a
proposal.

J.P. Morgan made a detailed presentation of its financial analysis to the
special committee. That analysis, in the updated form in which it was finally
presented to the special committee on October 1 in connection with the special
committee's decision to recommend the merger agreement, is summarized under
"Opinion of the Financial Advisor for the Special Committee". J.P. Morgan stated
that the discounted cash flow valuation, which it regarded as the most reliable
measurement of the company's value, indicated a value range of $20-28 per share,
based on management's revised projections. Its leveraged buyout analysis
indicated value range of $18-24 per share based on those projections. Its public
recapitalization analysis indicated value ranges of between $14-$18 per share,
based on management's forecast of IBP results, and $15-$19 per share, based on
projections prepared by equity analysts. J.P. Morgan presented an analysis of
five other possible buyers of IBP, which indicated that four of them could
afford to pay $25 per share without suffering any dilution in their per share
earnings and without realizing any synergies.

The special committee agreed that in view of DLJMB's position that it would
not make a proposal if the special committee solicited other bids, it would be
desirable to determine DLJMB's contemplated price before soliciting competing
bids.

On August 9, 2000, the special committee's legal and financial advisors,
accompanied by special committee members Jacobson and Massengale, met with John
Chalsty, Thompson Dean and other representatives of DLJMB, together with
representatives of Davis Polk & Wardwell, DLJMB's legal counsel. Mr. Dean said
that DLJMB was prepared to pay $20 per share in cash for IBP, and indicated that
DLJMB would be able to quickly obtain written commitments for the financing of
the transaction. Mr. Dean said that DLJMB anticipated that IBP management would
have a significant equity participation in the transaction, although no
agreements or understandings existed at that time with management. He indicated
that he anticipated that it was highly likely that two of IBP's major
shareholders would roll over a portion of their equity into equity of the buyout
group, although no understandings had been reached in that regard.

On August 10, 2000, the special committee met by conference call and heard a
report on the prior day's meeting with DLJMB. The representatives of J.P. Morgan
indicated that they did not regard the $20 per share price as attractive and did
not know whether the firm would be able to render a fairness opinion with
respect to that price. After extensive discussion, it was the consensus of the
special committee that DLJMB's price was significantly below the acceptable
range and that continuing discussions would not be warranted unless DLJMB was
prepared to make a material improvement in its offer.

The special committee discussed the question of whether third parties should
be contacted about their interest in making a proposal to buy IBP. It was the
consensus at the meeting that as outsiders were approached, the chances of a
leak increased, which could disrupt the company's business. It was noted that
DLJMB had not made an acceptable offer and had told the special committee it
would

16
<PAGE>
terminate discussions if other bids were solicited. The special committee also
noted that IBP's stock price had been depressed for some time, that it was
public information that the company had very little in the way of takeover
defenses and that industry or strategic buyers could easily conclude based on
publicly available information that an acquisition of IBP at a large premium was
feasible and accretive to earnings, yet, other than the October 1999 approach by
Smithfield, no industry or strategic buyer had come forward. Accordingly, the
special committee determined that it was reasonable to conclude that industry or
strategic interest in acquiring IBP was unlikely. The special committee also
noted that the depressed state of the high-yield bond market and the large
amount of equity required for a leveraged buyout would make it difficult, but
not impossible, for another financial buyer to acquire IBP. The special
committee concluded that initiating a solicitation process before DLJMB
committed to make an acceptable bid created a substantial risk of injury to the
company by disrupting its operations and, if the auction process failed, leaving
the company without an acceptable bid in hand. The special committee noted that
if DLJMB did make an acceptable bid, the special committee could try to
negotiate a contract with DLJMB providing that if someone else made a more
attractive bid, the special committee could accept that bid upon the payment of
a break-up fee.

Representatives of J.P. Morgan conveyed the consensus of the special
committee to DLJMB with respect to the $20 per share proposal. On August 14,
2000, representatives of DLJMB advised J.P. Morgan that they were prepared to
revise their proposal so that each share of IBP common stock would be converted
into the right to receive $20 in cash and $2 face amount of senior exchangeable
pay-in-kind preferred stock to be issued by Rawhide Holdings. The preferred
stock would be mandatorily redeemed in 2013, and would pay dividends at the rate
of 12.5% until 2006 in additional shares of preferred stock and thereafter in
cash. Up to 35% of the preferred stock would be redeemable at the option of
Rawhide Holdings at a price of 112.5% in connection with an initial public
offering, and would be redeemable at the option of the company after year 5 in
full at a price of 106.25% with a premium declining ratably until the end of
year 8. The preferred stock would be exchangeable at the option of Rawhide
Holdings into debentures having substantially equivalent terms. Rawhide Holdings
would be obligated to make an offer to purchase the preferred stock at a price
of 101% upon a change of control.

The special committee was briefed with respect to the revised proposal at a
meeting by conference call on August 15, 2000. Representatives of J.P. Morgan
said that their valuation analysis showed the $2 face amount of preferred stock
to be worth approximately $1.25 to $1.50. Representatives of J.P. Morgan advised
the special committee that they would not recommend that their firm issue a
fairness opinion with respect to the revised DLJMB offer. A J.P. Morgan
representative stated that he was not certain whether the offer fell within the
firm's valuation parameters of IBP's fair value, but that if it did, there was
no margin for error and he would not feel comfortable recommending that J.P.
Morgan issue a fairness opinion. After discussion, the special committee
unanimously concluded that the price should be rejected.

On August 16, 2000, DLJMB made another proposal to representatives of J.P.
Morgan under which 80% of the public shares of IBP would be purchased for $24 in
cash per share and the remaining 20% of the public shares would be "rolled-over"
into 30% of the common equity of the company. J.P. Morgan reported the details
of this revised proposal to a meeting by conference call of the special
committee on August 17. Representatives of J.P. Morgan said that on a blended
basis, the value of the cash portion of the revised proposal was $19.20 per
share, plus each share would be entitled to a pro rata portion of the remaining
equity of the company. They said that they had not completed their analysis, but
had concluded preliminarily that the total value of the revised proposal was
less than $22 per share. It was agreed that J.P. Morgan would complete its
analysis and report to the special committee on August 19, 2000.

On August 18, 2000, DLJMB advised J.P. Morgan that it had further refined
its proposal by increasing the price to be paid for the 80% of the public shares
to $25 in cash and reducing the

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percentage of common equity of the company to be held by the public shareholders
to 20%. J.P. Morgan presented its analysis of this proposal at a telephonic
meeting of the special committee on August 19, 2000. J.P. Morgan representatives
said the proposal could be viewed on a per share basis as having a value of $20
per share in cash and the residual value associated with the stub equity. J.P.
Morgan representatives presented their analysis of the value of the stub equity
under three different methodologies, and said that they put a value of
approximately $1.50-$1.75 per share on the stub equity.

After full discussion, the special committee determined that the newest
proposal did not represent the kind of significant increase in consideration
that the special committee had sought. The special committee decided that DLJMB
should be told that the value proposed was not acceptable, that the special
committee was concerned about the process dragging on in a manner that could
become a distraction to the company, that the special committee wanted to get
DLJMB's best and final offer and that there was a strong possibility that the
special committee would terminate the negotiations if a significant increase was
not obtained.

On August 23, 2000, Smithfield Foods, Inc. publicly disclosed that it had
acquired 6.3% of the common stock of IBP. According to press reports, as well as
in documents filed with the Securities and Exchange Commission by Smithfield,
Smithfield said that it did not have any interest in acquiring IBP and had
purchased the shares as a passive investment. Prior to the announcement,
Mr. Luter, the chief executive officer of Smithfield, contacted Mr. Peterson and
advised him of the pending announcement.

At a meeting on August 25, 2000, the special committee discussed the
Smithfield announcement and the fact that Smithfield had stated that its stock
purchase was for investment purposes only.

At a meeting on August 29, 2000, the members of the special committee
discussed the reasons for IBP stock's disappointing performance over recent
months. Among the factors noted were the market's lack of appreciation or belief
that IBP was transforming itself from a meat packing business to a diversified
food business and the market's adoption of a "wait and see" attitude with
respect to IBP's recent acquisitions of businesses other than meat packing. The
view was expressed that these acquisitions had resulted in a higher risk profile
for the company, and that the market was not yet convinced that IBP could
operate these non-core businesses successfully.

At the August 29, 2000 meeting, J.P. Morgan representatives updated their
valuation analysis for the special committee. A J.P. Morgan representative
stated that he could recommend that his firm issue a fairness opinion at $22.00
per share, although it would be at the lower end of his fairness range. It was
noted that the stock price had moved upwards since the beginning of the month
from $15.31 to $16.88. J.P. Morgan said the stock price was influenced by the
announcement of the Smithfield investment, as well as some favorable analyst
comments. J.P. Morgan said that as a result of the increase in price, the
premium represented by a $22.00 per share bid was somewhat less than that
offered in the average going-private transaction when measured against the
market price in the most recent five-day trading period, although it was still
in line with median premiums paid in such transactions based on a thirty-day
trading average. J.P. Morgan also said that measurement of the acquisition
premium was not a true valuation technique, but more of a reality check to
confirm that other more reliable valuation parameters, such as discounted cash
flow, were yielding sensible results.

At the August 29, 2000 meeting, the special committee members also discussed
what would be required to increase the multiple to earnings at which IBP's stock
traded. J.P. Morgan advised that generally it was necessary to expand the rate
of earnings growth and/or produce more stable earnings patterns. The special
committee also discussed the potential negative effect on the stock price of the
anticipated capital expenditures in connection with IBP's recently announced
movement into the "case ready" business and implementation of its "Thomas E.
Wilson" branded lines of products. It was pointed out that failures, delays or
disappointments in that program could lead to a very significant decline in the
stock price.

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The special committee discussed various alternatives with respect to the
negotiations with DLJMB. It was agreed that J.P. Morgan should indicate to DLJMB
that the special committee would be amenable to recommending a transaction that
delivered value of $24 per share, and that stub equity could form part of the
transaction consideration so long as certain protections for minority
shareholders were in place. The special committee concluded that, whether or not
stub equity was included, DLJMB should be advised that the special committee
believed it was particularly important, in light of DLJMB's position that it
would discontinue discussions if the special committee contacted third parties
at this point, that if a merger agreement were signed the terms would allow the
special committee on a liberal basis, with no material impediments, to enter
into discussions, furnish information and negotiate with third parties who
indicated a willingness to offer a higher value. The special committee further
concluded that DLJMB should be advised that the transaction must be subject to
the approval of a majority of the unaffiliated shareholders voting at a special
meeting, and any voting agreement entered into by DLJMB with IBP shareholders to
support the transaction should terminate if the merger agreement was terminated.
The special committee agreed that it wanted further assurance that IBP
management would be willing to work for a potential competing bidder, if one
emerged. To the extent DLJMB included stub equity as a portion of the
consideration, the special committee determined that certain structural
protections should be put in place; i.e., a commitment to maintain at least two
market makers for the stub equity, protection for the minority in the form of
"tag along" rights, and at least three independent directors would be required
on the surviving company's board, with the approval of such directors needed to
effect any transaction with an interested party.

J.P. Morgan relayed the special committee's position to DLJMB. On
September 1, counsel to DLJMB advised counsel to the special committee that
DLJMB was considering the special committee's position, but had concluded that
the protections sought by the special committee for the holders of the stub
equity made including such a security as part of the transaction consideration
an unattractive alternative to DLJMB. Following this discussion, Mr. Dean
advised J.P. Morgan that DLJMB was prepared to make an offer of $22.00 per share
in cash.

On September 7, 2000, Mr. Dean advised the special committee's legal and
financial advisors that DLJMB was prepared to increase its offer to $22.25 per
share in cash. He said that ADM, Booth Creek and Jeffrey J. Joyce had indicated
they would not be willing to participate in the buyout group if the offered
price was any higher and IBP management had stated that its support for the
transaction would fall away if the transaction involved any additional leverage,
because it would not feel comfortable that the company could achieve its
business objectives with such additional leverage. Mr. Dean indicated that DLJMB
would not accept a requirement that the transaction be approved by a majority of
the unaffiliated shareholders. Mr. Dean and DLJMB's counsel indicated that they
believed they would be able to reach an accommodation with the special committee
on the other issues that had been presented to them. The next day, DLJMB's
counsel sent counsel to the special committee drafts of definitive documentation
for the transaction, in which DLJMB proposed a termination fee of $100 million
(approximately 4.2% of the equity value of the transaction at $22.25 per share).
The special committee held a short meeting on September 8 at which it was
briefed about the latest DLJMB proposal.

The special committee met by conference call on September 11, 2000, to
consider the revised DLJMB proposal. A J.P. Morgan representative stated that
the $22.25 per share price represented a 28% premium to the then current market
price, and a 40% premium to the stock's thirty-day trading average, which
premium to the thirty-day trading average was in line with comparable
transactions. There was a consensus that the break-up fee sought by DLJMB was
too high. Various alternatives were discussed. It was agreed that the risk of
DLJMB terminating discussions, and the potential damage to the company of a
failed auction, continued to make undesirable the alternative of contacting
third parties before any agreement was signed. It was the special committee's
consensus that it would be preferable to structure a transaction at an
acceptable price with an adequate post-signing market check mechanism. The
special committee members discussed the alternative of calling off negotiations,
pursuing the company's business plan as an independent public company and trying
to convince the

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market that it should apply a higher multiple to the company's earnings. The
consensus of the special committee was that there was a significant risk that
this strategy would not be successful in light of the significant anticipated
capital expenditures and the market's adverse reaction to the company's
acquisitions and capital expenditure programs in the past.

It was agreed that counsel to the special committee should reiterate to
counsel to DLJMB the special committee's position that the transaction should be
subject to the approval of a majority of the unaffiliated shareholders voting at
a special meeting. It was further agreed that counsel to the special committee
should state that the special committee was not satisfied with the price
offered, but suggested that further negotiation on price be deferred until the
other non-financial issues presented by DLJMB's draft merger agreement were
resolved, including:

- the break-up fee should not exceed 2.5% of the equity value of the
transaction;

- certain modifications to the proposed "no-shop" provision were required to
make it less restrictive;

- the circumstances under which the termination fee would be payable and
those under which expense reimbursement would be available should be
narrowed and the amount of expense reimbursement should be capped;

- management should restate its willingness to work for a competing bidder;

- any antitrust risk should be borne by the buyout group; and

- while the buyout group would get notice of the special committee's intent
to terminate the merger agreement to accept a higher bid, it would not
automatically have its revised bid accepted if it matched the competing
proposal.

These points were conveyed to counsel to DLJMB the next day.

Counsel to DLJMB responded later on September 12, 2000, that DLJMB's last
offer of $22.25 per share was its best and final offer. Counsel said DLJMB was
prepared to reduce its proposed breakup fee to $80 million (approximately 3.3%
of the equity value of the transaction at $22.25 per share). Counsel to DLJMB
proposed a cap on expense reimbursement of $7.5 million. DLJMB continued to
resist the requirement that the transaction be approved by a majority of the
unaffiliated shareholders.

On September 13, 2000, counsel to the special committee sent a markup of
certain provisions of the draft merger agreement reflecting the position of the
special committee. On the next day, counsel to DLJMB sent a revised draft
reflecting the position of DLJMB.

On September 14, 2000, the special committee met to consider the status of
the negotiations. The special committee decided that, although J.P. Morgan's
representative had stated that he could recommend the firm issue a fairness
opinion at a price lower than DLJMB's $22.25 per share offer, and despite the
fact that DLJMB had indicated that it would not be willing to further increase
the price, the special committee's counsel and financial advisor should continue
to attempt to obtain a higher price. It was agreed that the counsel and
financial advisor to the special committee should reiterate that the special
committee would not accept a termination fee of more than 2.5% of the equity
value of the transaction and would insist on approval of the transaction by a
majority of the unaffiliated shareholders. The special committee also decided it
would be desirable to meet with Mr. Peterson and ask him about management's
position with respect to working for a competing bidder and other matters
related to the proposed buyout.

On September 15, 2000, the members of the special committee (other than
Mr. Jacobson) met with Mr. Peterson and his counsel. Mr. Peterson advised the
special committee that he had no understanding or arrangement with DLJMB
restricting his ability to work for other bidders. He said he was not aware of
anyone for whom IBP management would not work, so long as a fair and reasonable

20
<PAGE>
deal for management could be worked out and it was a good deal for the company.
He said his primary concern was that the company not be overleveraged, and that
he might decide not to work for a potential buyer who he felt would subject the
company to too much debt. On the issue of DLJMB's business plan, Mr. Peterson
said that DLJMB had agreed upon the amounts of capital expenditures which
management believed would be critical for the company's future growth,
consistent with the additional leverage it would incur as a result of the
proposed transaction. Mr. Peterson also confirmed that management had not
arrived at any understanding or arrangement with DLJMB with respect to
management's compensation and equity participation in the buyout.

Over the course of the next several days, representatives of DLJMB and
representatives of the special committee had several discussions with respect to
the outstanding issues. DLJMB acceded to the special committee's position by
agreeing to lower the termination fee to $59 million (approximately 2.5% of the
equity value of the transaction at $22.25 per share). DLJMB also agreed to
condition the transaction on the approval of a majority of the unaffiliated
shareholders, but continued to indicate that it would not increase its offer
price.

The special committee met on September 18, 2000, and received an update with
respect to the negotiations. After an extensive discussion about the merits and
risks of the transaction, the special committee determined to advise DLJMB that
it was prepared to proceed on the basis outlined.

Over the next several days, the parties finalized the definitive
documentation for the transaction. DLJMB negotiated financing commitment letters
and voting agreements with ADM, Booth Creek and Jeffrey J. Joyce, finalized the
shareholder arrangements among the members of the buyout group, and began its
negotiations with management regarding the terms of management's participation
in the buyout. The special committee's legal and financial advisors reviewed
this documentation.

On October 1, 2000, the special committee held a meeting to consider the
merger agreement and determine whether to recommend its adoption to the full
board of directors. The meeting was attended by all members of the special
committee. Representatives of the special committee's financial and legal
advisors also attended the meeting. Counsel to the special committee advised the
members of the special committee as to their fiduciary duties in considering the
proposed transaction and in particular their duty once they decided to sell the
company to obtain the best price reasonably available to IBP's shareholders.
Counsel to the special committee reviewed the principal terms and conditions of
the merger agreement and ancillary agreements and arrangements. Counsel
explained the circumstances in which the $59 million termination fee would be
paid. Counsel also explained that the clause in the merger agreement prohibiting
the company from soliciting competing bids allows the special committee under
certain circumstances to provide confidential information about IBP to anyone
who makes a superior bona fide acquisition proposal, to engage in discussions or
negotiations with anyone who makes such a proposal and, upon receipt of such a
proposal, to withdraw or modify the special committee's recommendation of the
merger. J.P. Morgan made a presentation to the special committee in which it
discussed the information described under "--Opinion of the Financial Advisor
for the Special Committee." J.P. Morgan then rendered its oral opinion (later
confirmed in writing) to the special committee that, as of such date, the merger
consideration of $22.25 per share was fair, from a financial point of view, to
the IBP shareholders.

At the conclusion of these presentations and after discussion, including a
discussion of the items discussed under "--Recommendations of the Special
Committee and the Board of Directors," the special committee unanimously
determined to approve the merger agreement and declare the merger agreement fair
to and in the best interests of the IBP shareholders, and approved resolutions
recommending that IBP's board of directors approve the merger as outlined in the
merger agreement.

Immediately following the special committee's meeting, a meeting of the
entire board of directors was held to consider approval of the merger as well as
adoption of the merger agreement. The meeting was attended by all members of the
board, with the special committee and Mr. Chalsty participating by

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telephone conference. Representatives of counsel to the special committee and
J.P. Morgan also attended the meeting.

Ms. Smith, chairperson of the special committee, reported the conclusions
and recommendation of the special committee to the board. The board of directors
then unanimously concluded that the merger was fair to, and in the best
interests of, IBP and its shareholders, unanimously approved the merger
agreement and recommended that the IBP shareholders vote in favor of the merger
proposal. The special committee and board of directors further resolved to
authorize the reimbursement of up to $1.0 million of legal fees incurred by the
members of IBP management involved in the buyout group. The special committee
and board of directors recognized that IBP management's participation in the
buyout group was an integral part of the DLJMB offer and that IBP management
would be more willing to agree to such participation if they had adequate legal
representation. Messrs. Bond, Leman and Peterson abstained from voting on these
matters because of their proposed financial interest in the buyout group after
the merger, and Mr. Chalsty abstained due to his relationship with DLJMB.

Subsequent to the board meeting, on October 1, 2000, IBP, Rawhide
Acquisition and Rawhide Holdings entered into the merger agreement, and Rawhide
Holdings, Rawhide Acquisition, ADM, Booth Creek and Jeffrey J. Joyce entered
into the voting agreement. DLJMB and IBP issued a joint press release on the
morning of October 2, 2000 announcing the execution of the merger agreement.

On October 27, 2000, Brandes Investment Partners, L.P., Brandes Investment
Partners Inc., Brandes Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and
Jeffrey A. Busby, together the holders of 9.12% of IBP common stock outstanding
and collectively referred to in this proxy statement as the Brandes Group,
disclosed in a public filing with the SEC their intention to vote against the
merger proposal and to consider asserting their appraisal rights under Delaware
law. In their filing, the Brandes Group stated that they would continue to
analyze the merger proposal as well as the structure and markets of the issuer
and that they may engage in discussions with other IBP shareholders or third
parties to explore other options, consider participation in shareholder actions
or discuss possible changes to the merger proposal with third parties, IBP or
members of the buyout group.

On November 12, 2000, Mr. Luter, the chief executive officer of Smithfield,
sent the following letter to Ms. Smith, chairperson of the special committee:

November 12, 2000

Special Committee of the Board of Directors of IBP, Inc.
IBP, Inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Attn: Ms. JoAnn R. Smith, Chairperson:

As you know, we have great respect for IBP, which led us last August to
increase our investment in the Company to approximately 6.6%. As you can
imagine, we were both surprised and disappointed to learn of the proposed
leveraged buyout of IBP, led by the Company's management, DLJ and certain other
large stockholders, which provides for a cash out of all your stockholders other
than the buyout group at a price of $22.25 per share.

Since the announcement of the management buyout, we have spent a great deal
of time considering and analyzing the proposed buyout transaction and its
implications for our investment in the Company. We are aware of the adverse
reaction in the marketplace to the proposed management buyout. In particular, we
have noted the reaction of Brandes Investment Partners, Inc., the largest
stockholder of the Company that is not part of the buyout group, which recently
stated in a public filing, among other things, that it intends to vote against
the transaction and might consider exercising appraisal rights under Delaware
law. As the second largest stockholder of the Company that is not part

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of the buyout group, we also have concerns with respect to the management buyout
and the valuation of the Company it represents.

After due consideration and review, we have concluded that we can offer a
superior transaction, and that there is a compelling logic to a combination of
our two companies in a manner that provides greater short and long term value to
IBP and benefits both of our companies and all of our respective stockholders.

Accordingly, the board of directors of Smithfield has authorized me to
advise you of our offer to acquire all of the outstanding shares of IBP common
stock in a merger in which your stockholders would receive a price of $25 per
share, payable in Smithfield common stock at an exchange ratio based on the
average trading price of Smithfield's shares for a period prior to the closing,
subject to a maximum exchange ratio of 0.878 Smithfield shares (corresponding to
a $28.46 or lower average Smithfield trading price) and a minimum exchange ratio
of 0.719 Smithfield shares (corresponding to a $34.79 or higher average
Smithfield trading price) per IBP share. Our proposal provides a 19.8% premium
over last Friday's closing price of IBP common stock, a 12.4% premium over the
price offered in the management buyout and a 36.5% premium over the closing
price of IBP on September 29, 2000, the last trading day prior to the public
announcement of the management buyout. Our proposed transaction would also be
tax-free for your stockholders and would be accounted for as a pooling of
interests, which would have significant accounting benefits for the combined
company. We would anticipate that IBP's employee stock options would be
converted into Smithfield stock options on a basis consistent with the exchange
ratio in the merger.

Our companies have had a long-standing relationship and have many
complementary businesses, factors that we believe will allow the combined
company to thrive and grow in the years to come for the benefit of all of our
stockholders and other constituencies including producers, customers and
consumers. Unlike the proposed management buyout, which provides a continuing
equity interest only for management and certain large insider stockholders of
the Company (to the exclusion of well more than three-quarters of IBP's
stockholders), our proposal both delivers more value to your stockholders and
gives all of your stockholders the opportunity to continue to share in the
future appreciation of our combined companies, thus providing a level playing
field to all your stockholders without unfairly favoring a few. In addition,
based on publicly available information, we estimate that a combination of our
two companies would result in synergies of approximately $200 million per year
after our respective businesses have been integrated, which in our proposal
would be shared by all of IBP's and Smithfield's stockholders. After giving
effect to such synergies, and based on public analyst estimates, we would expect
that our proposed transaction would be accretive to earnings in the first year.

In furtherance of the value of the combination, we recognize that great
companies are built on a foundation of great management teams. We would be
pleased to have Robert L. Peterson and Richard L. Bond serve on our management
committee after the merger and, given our high regard for your operating
management, we would envision integrating IBP's and Smithfield's management
teams in a manner that would create the strongest possible combined company.
Based on the information available to us, we do not anticipate any significant
reduction in employment levels. We would also like to discuss with you the
possibility of offering some of IBP's outside directors who may be interested in
the opportunity to join our board of directors after the merger.

We have reviewed the management buyout merger agreement and it is evident
that our offer constitutes a "Superior Proposal", as defined in such agreement,
which would permit you to terminate the merger agreement in a manner consistent
with its terms. As indicated above, our offer represents a 12.4% premium to the
amount of consideration offered in the management buyout, totaling approximately
$290 million of additional aggregate consideration.

Unlike the buyout transaction, our offer is not subject to a financing
condition. Of course our offer is subject to negotiation and execution of a
mutually acceptable agreement containing customary terms, the receipt of
required regulatory and stockholder approvals, our ability to utilize pooling of
interest accounting and completion of a brief confirmatory due diligence review,
including as to the recent restatement of your financial results and any ongoing
implications of such restatement.

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We are confident in light of the fact that the Company has already entered
into a merger agreement that we will be able to enter into a mutually
satisfactory agreement expeditiously. We anticipate that there will be no issue
with respect to our stockholders' approval. As to regulatory matters, we have
done a thorough analysis of the regulatory approvals that would be required to
consummate the transaction, and we are confident that there are no meaningful
impediments to our offer from an antitrust or other regulatory point of view. In
addition, to the extent issues might be raised regarding concentration in
certain areas of our respective businesses, we have developed a plan to address
such issues which may include the divestiture of certain assets, and are
prepared to discuss with you and your advisors the steps that we believe will
resolve any issues that might be raised by regulators. Based on publicly
available information, we and our advisors believe that there should be no
impediments to using pooling of interest accounting and we would expect that you
would not take any actions to prevent us from accounting for the transaction in
such a manner.

Since the merger agreement with respect to the management buyout does not
require you even to conclude in advance that our offer is in fact a Superior
Proposal in order to commence discussions and share information with us, but
only determine that our offer "is reasonably likely to result" in a Superior
Proposal, we would like to commence discussions with you as soon as possible. We
are prepared to discuss all aspects of our offer with you, particularly if the
results of our due diligence allow us to identify additional value or synergies
in the Company, consistent however with our policy of only participating in
transactions that we believe enhance value for our stockholders and are
accretive to earnings in the near term.

We urge you to recognize the immediate and long-term superior value of this
transaction to all of your stockholders. As you may know, our management team is
very focused on stockholder value creation and has delivered superior long-term
returns to our stockholders through our ability to manage our operations
efficiently and successfully to integrate value added acquisitions, which we are
confident we could do with IBP. We view a combination with IBP as an opportunity
to create significant value for both of our stockholder bases by continuing to
expand the movement into case ready products, by creating a national brand and
by implementing best of breed operating procedures. As a stock-for-stock
transaction, our proposal would permit our combined management team to grow the
combined business to create greater value free of the added debt burdens that
IBP would labor under in a highly leveraged transaction such as the proposed
management buyout.

Because of the importance of this proposal to our respective stockholders
and in light of our obligations under the securities laws, we are compelled to
release this letter publicly and will accordingly do so.

We look forward to meeting with you and your advisors as soon as possible so
that we can further discuss our offer and promptly enter into a definitive
agreement with respect to a transaction that benefits both of our companies and
all of our respective stockholders and constituencies.

Sincerely,

Joseph W. Luter, III

On November 13, 2000, the special committee met twice by conference call to
discuss the Smithfield letter. The special committee's legal and financial
advisors reviewed the terms of Smithfield's proposal. Counsel to the special
committee reviewed on a preliminary basis the potential regulatory concerns
regarding the Smithfield proposal, and the representatives of J.P. Morgan
discussed the financial aspects of the proposal. Counsel to the special
committee outlined what the special committee's options and obligations were
under the Rawhide merger agreement when evaluating an alternative acquisition
proposal. After a full discussion, the special committee concluded that the
proposal set forth in the Smithfield letter met the applicable standard under
the Rawhide merger

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<PAGE>
agreement to permit the initiation of discussions with Smithfield, and the
special committee determined that it would begin discussions with Smithfield.

The special committee agreed that it would send a letter to Smithfield
expressing its willingness to discuss the Smithfield proposal.

The following letter from Ms. Smith was delivered to Smithfield on
November 13 after the special committee's legal advisor gave notice to Rawhide
Holdings of such:

November 13, 2000

Mr. Joseph W. Luter III
Chairman
Smithfield Foods, Inc.
200 Commerce Street
Smithfield, Virginia 23430

Dear Mr. Luter:

The Special Committee of the Board of Directors of IBP, inc., was pleased to
receive your letter dated November 12, 2000 in which you propose a merger in
which IBP shareholders would receive $25 per share, payable in Smithfield common
stock, subject to the terms and conditions set forth therein. Please be assured
that the Special Committee is fully committed to the objective of maximizing
value for the IBP shareholders.

As you have acknowledged in your letter and public comments, there are a
number of issues that need to be addressed in connection with your proposal.
Nevertheless, the Special Committee has determined that your proposal meets the
applicable threshold under IBP's merger agreement with Rawhide Holdings
Corporation and is therefore prepared to enter into discussions with you
regarding your proposal.

You indicated in your letter that you are interested in performing a brief
confirmatory due diligence review. We are of course happy to accommodate you on
that score. Enclosed for your review is a form of confidentiality agreement. In
addition to commitments not to hire IBP employees and to keep confidential any
nonpublic information, it further requires Smithfield to not make any offer for
IBP which does not involve the acquisition of all of its shares, and not to
acquire any additional shares of IBP other than pursuant to such an offer. I am
sure you can appreciate the necessity for these requirements and assume they
cause no difficulty.

Among the subjects we hope you will be in a position to address are the
details of the plan referred to in your letter to address antitrust issues. We
are pleased by your willingness to take the steps necessary to resolve any
issues that may be raised by regulators, and want to avail ourselves of your
invitation to have our advisors meet with you. These assurances are, of course,
of critical importance to us.

It is also encouraging to us that you acknowledge the political
sensitivities of your proposal which introduce elements of uncertainty as to
timing and ultimate consummation. The initial reaction to your proposal by some
state and federal officials certainly indicates there is a basis for those
concerns. Thus, your willingness to commit to resolve regulatory issues, as you
have indicated, is made even more important.

Another important issue we have focused on is the so-called "collar" on the
exchange ratio. The closing price of Smithfield stock on the last trading day
prior to your announcement of your merger proposal was its highest closing price
in the past year; subsequent to the announcement, your stock

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traded below the lower end of your proposed collar. In light of these facts, as
well as the general volatility of share prices in the current environment, we
will be very interested in discussing with you ways to protect the value for IBP
shareholders. This, in addition to other things, should include starting from a
base price higher than $25 per share. In that regard, we were also encouraged by
other indications in your letter that you are prepared to consider a higher
price.

Again, we are appreciative of your interest and look forward to working with
you on a cooperative basis to determine whether a satisfactory transaction can
be developed.

Very truly yours,
Jo Ann R. Smith

On November 16, 2000, IBP and Smithfield entered into a confidentiality
agreement pursuant to which Smithfield agreed to keep confidential certain
information it and its advisors may receive from IBP and its advisors in
connection with Smithfield's evaluation of a potential transaction. Under the
confidentiality agreement, Smithfield is prohibited prior to March 31, 2001 from
making any proposals to acquire less than all of the outstanding shares of IBP
common stock, and from acquiring additional shares of IBP common stock in the
open market if such acquisition would result in Smithfield beneficially owning
more than 9.9% of IBP's outstanding common stock, except in each case under
certain circumstances.

RECOMMENDATION OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS; PURPOSE AND
REASONS FOR THE MERGER

At its meeting on October 1, 2000, the special committee determined that the
terms of the merger agreement were fair to and in the best interests of the
shareholders of IBP and unanimously recommended the approval of the merger
agreement by the board of directors. At a meeting of the board of directors on
October 1, 2000 held after the special committee's meeting on that date, at
which all directors of IBP were present, the board unanimously approved the
merger agreement and recommended that the shareholders vote in favor of the
merger proposal. Because of their proposed financial interest in the buyout
group after the merger, Messrs. Bond, Leman and Peterson abstained from voting
on this matter, and Mr. Chalsty abstained because of his relationship with
DLJMB.

SPECIAL COMMITTEE

In reaching its conclusion, the special committee considered the benefits
offered by the merger and weighed them against the detriments associated with
the merger. While the special committee did not consider the detriments
associated with the merger to be insignificant, it ultimately concluded that
these detriments were outweighed by the potential benefits of the merger to the
shareholders. See "--Benefits and Detriments of the Merger to IBP and its
Shareholders." In reaching this determination, the special committee relied,
among other things, on the advice of the special committee's financial and legal
advisors.

As part of its analysis the special committee considered the alternative
available to IBP to remain as a public company. The special committee considered
IBP's limitations as a public company and the fact that the absence of truly
comparable publicly traded companies and limited research attention from market
analysts had adversely affected the trading market for, and the value of, IBP's
common stock. The special committee also focused on the fact that the common
stock of IBP, a beef and pork processor, carried a lower price/earnings ratio
than companies in the poultry and pork processing businesses. The special
committee believed that an improvement in this situation was not likely in the
foreseeable future, especially in light of the significant capital expenditures
that would be required to complete the hoped for transformation of IBP into more
of a branded products company. The special committee believed that this strategy
involved significant risks and would take considerable time to

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implement and that there was no assurance that this transformation would be
successfully executed or fully appreciated in the marketplace and reflected in
IBP's stock price.

The special committee also reviewed an analysis performed by J.P. Morgan of
the possibility of a public recapitalization in which IBP would purchase between
approximately 36% and 60% of its shares at prices ranging between $20 and $24
per share. J.P. Morgan advised the special committee that it believed such a
transaction would have a blended per share value of between $14 and $18 per
share, based on management's forecast of IBP results. Because this value was
substantially less than that which shareholders would realize under the DLJMB
proposal, and because there would be significant risks associated with
leveraging IBP to the extent necessary to accomplish such a transaction, the
special committee determined not to pursue a public recapitalization.

The special committee had the authority to contact third parties with
respect to potential alternative transactions. DLJMB stated that its willingness
to proceed with any proposal was conditioned on the special committee not
initiating discussions with any other potential bidder prior to the execution of
a merger agreement. In addition, the special committee believed that soliciting
bids from others before the DLJMB group was legally committed to proceed with
the merger could lead to inadvertent public disclosure of the process and
significant disruption to IBP's operations, with no assurance that any bid for
IBP would ultimately emerge. The special committee also considered that the
merger agreement is structured in a way that it believes ensures that the
interests of IBP shareholders are protected. It contains no material impediments
to the emergence of a higher bid. The merger agreement can be terminated to
accept a higher offer on the payment of a break-up fee representing
approximately 2.5% of the equity value of the DLJMB bid and the reimbursement of
fees and expenses not exceeding $7.5 million. In addition, the merger requires
the approval of a majority of the shares voting at the special meeting held
other than by persons with an interest in the buyout group.

The special committee recognized that a decision by the board to accept
DLJMB's proposal changed the board's fiduciary duty to IBP's shareholders from
the preservation of IBP as a corporate entity to the maximization of IBP's value
at a sale for the shareholders' benefit and that the special committee had a
duty to inform itself about available alternatives and to obtain the best price
reasonably available. After review and evaluation of all information provided to
the special committee from J.P. Morgan for its consideration, and consideration
of the advice provided by the special committee's financial and legal advisors,
the special committee concluded that, in the circumstances then existing, the
offer of $22.25 per share pursuant to a merger agreement which does not pose any
material obstacles to the making of a higher bid was, for IBP's shareholders,
preferable to continuing to hold shares in the public company.

BASIS OF RECOMMENDATION. IBP's purpose for engaging in the merger is to
allow IBP's shareholders to realize the value of their investment in IBP in cash
at a price which represents a significant premium to the market price of IBP
common stock before the announcement of the merger. After review and evaluation
of all information provided to the special committee for its consideration,
consideration of the advice provided by the special committee's financial and
legal advisors, and further discussion and deliberation, the special committee
concluded that the terms of the merger agreement were fair to and in the best
interests of IBP shareholders and unanimously recommended the approval of the
merger agreement by the board of directors. The decision to recommend that the
board of directors approve the merger agreement was based, in part, on the
following important factors:

- The special committee was presented with a proposal that offered IBP
shareholders a significant premium over the then current market price of
IBP's common stock;

- The special committee received an opinion from J.P. Morgan that the
proposed consideration to be received by IBP shareholders in the merger
was fair from a financial point of view to such shareholders;

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- The view of the special committee that the terms of the merger agreement
and the related agreements entered into with ADM, Booth Creek, Jeffrey J.
Joyce, Robert L. Peterson and Richard L. Bond were reasonable and would
not deter competing bids that were materially better for IBP shareholders;
and

- The special committee considered that the alternative of IBP remaining as
a public company would not allow shareholders to take advantage of the
immediate cash premium offered by DLJMB and would not address the
disadvantages inherent in IBP remaining a publicly traded company that are
described above. In this context, the special committee noted that the
agreement with DLJMB did not preclude other higher offers being made.

KEY FACTORS. The factors reviewed by the special committee, in consultation
with its legal and financial advisors, and which supported the special
committee's determination to recommend the merger included, among others, the
following:

- The special committee's knowledge of IBP's business, operations,
properties, assets, financial condition, operating results and prospects,
including without limitation IBP's recent and current financial
performance and the implications thereof with respect to the potential
market performance of IBP common stock on a stand-alone basis, which the
special committee considered in light of the premium offered under the
terms of the merger agreement;

- The special committee also considered the fact that no offer had been made
by any person for any business combination with IBP prior to or during the
time the discussions with DLJMB took place. The absence of any such offer
supported the special committee's conclusions;

- The oral and written presentations of J.P. Morgan, and the opinion of J.P.
Morgan which is described below. See "Special Factors--Opinion of the
Financial Advisor for the Special Committee" for a discussion of the
factors that J.P. Morgan considered in rendering its opinion. This
opinion, which is subject to limitations, qualifications and assumptions,
is included as Appendix C to this proxy statement. We encourage you to
read it carefully in its entirety;

- The history of the negotiations with respect to the merger consideration
that, among other things, led to an increase in DLJMB's offer from $20.00
per share of IBP common stock to $22.25 per share of IBP common stock and
the belief of the members of the special committee that $22.25 per share
of IBP common stock was the highest price that DLJMB would agree to pay;

- The terms and conditions of the merger agreement. The special committee
considered in particular the non-solicitation, termination and termination
fee provisions of the merger agreement, which permit IBP's board of
directors to fulfill its fiduciary duties. The special committee sought to
negotiate provisions in the merger agreement that would allow the board of
directors to fulfill its fiduciary duties in the event an unsolicited
offer from a third party were received. While the merger agreement
prohibits IBP from soliciting third-party offers, it does not prohibit the
special committee, where it believes that doing so is reasonably likely to
result in a higher offer, from considering unsolicited third-party offers,
negotiating with these third parties or furnishing these third parties
with information about IBP, subject to confidentiality agreements it deems
appropriate. Also, the special committee negotiated provisions in the
merger agreement that would permit the termination of the merger agreement
in the event an offer more favorable from a financial point of view than
the DLJMB offer is received from a third party. The special committee
concluded that the obligation to pay a $59 million termination fee and to
reimburse fees and expenses up to $7.5 million should not be a material
deterrent to a third party from making an offer that was more favorable to
IBP's shareholders;

- The fact that the merger agreement requires that the merger be submitted
to IBP's shareholders for approval, which allows for an informed vote of
shareholders on the merits of the transaction,

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and may be terminated in the event this approval is not obtained, and that
the merger agreement further provides that it is a condition to IBP's
obligation to proceed with the transaction that it be approved by the
holders of a majority of IBP shares voting at the stockholder meeting
other than shares beneficially owned by persons having an interest in the
buyout group;

- The fact that Delaware law entitles IBP shareholders to appraisal rights
if the merger is completed (although it is a condition to Rawhide
Holdings' and Rawhide Acquisition's obligation to proceed with the
transaction that the holders of not more than 5% of the outstanding shares
demand appraisal of their shares);

- The conditions to closing in the merger agreement, including the financing
contingency;

- The experience and success of DLJMB in structuring and closing
transactions similar to the merger and the strength and favorable terms of
the financing commitment letters provided or obtained by DLJMB in
connection with the transactions contemplated by the merger agreement, the
terms of which had been reviewed by the special committee and its
financial advisor and counsel;

- The fact that the consideration to be received by IBP shareholders in the
merger represents a:

- 21.5% premium over the $18.31 closing price of IBP common stock on
September 29, 2000, the last full trading day before the public
announcement of the merger agreement,

- 46.5% premium over the $15.19 closing price of IBP common stock on
August 9, 2000, the date on which DLJMB made its first proposal; and

- 30.4% premium over $17.07, which is the 30-day average of IBP closing
prices during the period immediately preceding the announcement;

- The fact that the consideration to be received by IBP shareholders in the
merger will consist entirely of cash; and

- The special committee's belief that the surviving corporation (after the
merger of Rawhide Acquisition with and into IBP) will be solvent, will not
be left with unreasonably small capital and will not have incurred debts
beyond its ability to pay them as they mature. The receipt of an opinion
of an independent advisor to the board of directors confirming this belief
is a condition to IBP's obligation to complete the merger.

In addition to the foregoing positive factors which supported the special
committee's determination to recommend the merger, the special committee
reviewed the following material negative factors, which the special committee
viewed as insufficient to outweigh the positive factors:

- Following the merger, IBP's shareholders (excluding persons associated
with the buyout group) will cease to participate in the future earnings
growth, if any, of IBP or benefit from the increase, if any, in the value
of the company;

- The potential conflicts of interest of IBP's management in connection with
the merger;

- IBP's shareholders would recognize a taxable gain upon completion of the
merger if and to the extent the amount of cash a shareholder receives in
the merger exceeds the shareholder's tax basis in the IBP common stock;
and

- The historical trading prices of IBP common stock on the New York Stock
Exchange. The special committee noted that during the three-year period
and one-year period preceding the announcement of the transaction, shares
of IBP common stock had traded at prices significantly in excess of the
merger consideration of $22.25 per share (see "Common Stock Market Price
and Dividend Information"). The special committee placed greater weight on
its comparison of the merger consideration to recent market prices than to
historical prices as the circumstances of

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IBP are continuously changing. As a result, the special committee
considered valuations placed by investors on IBP's business in the past
less relevant to the fairness of the merger consideration than valuations
placed by investors at the time the merger discussions took place.

The foregoing discussion of the information and factors considered and given
weight by the special committee is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the merger,
the special committee did not find it practicable to, and did not, quantify or
otherwise assign relative weights to the specific factors considered in reaching
its determination. In addition, individual members of the special committee may
have given different weights to different factors. The special committee did not
consider in its analysis either IBP's "liquidation value" or the book value of
IBP common stock or the price paid by IBP in purchasing its own shares as
disclosed under "Common Stock Purchase Information."

With respect to liquidation value, the special committee considered that
liquidation value would likely be significantly lower than the valuation of
IBP's business as a going concern, and as such would not provide a useful
comparison for assessing the fairness of the merger consideration. In that
regard, the special committee noted that J.P. Morgan, its financial advisor, did
not consider liquidation value and assessed the value of the business on the
assumption that the business would continue as a going concern. The special
committee placed significant weight on the going concern valuation of J.P.
Morgan.

In not considering book value, the special committee considered the advice
of its financial advisor, J.P. Morgan that, as opposed to EBITDA (earnings
before interest, taxes, depreciation and amortization) and earnings per share,
which are current period measurements of a firm's operating performance, book
value is a historical cost accounting concept, which may not bear any relevance
to current market indicators of value. In addition, book value fails to exclude
the effects of non-recurring items which may render comparisons to market value
less meaningful.

With respect to the price paid by IBP for purchases of its own shares, the
special committee considered the fact that these purchases were at then current
market prices and were for relatively small amounts of IBP's outstanding shares,
and concluded that the prices of these purchases would not provide as useful a
comparison for the merger consideration as the other factors listed above.

In concluding that the merger was fair to and in the best interests of IBP
shareholders, the special committee was aware that the $22.25 price per share to
be received by IBP shareholders in the merger is less than the high end of all
the equity value per share ranges contained in the financial analyses described
below prepared by J.P. Morgan other than the range associated with the public
recapitalization analyses. The special committee also noted that the $22.25
price exceeded the low end of all of the equity value per share ranges derived
under each of the valuation methodologies employed by J.P. Morgan. On the basis
of the factors summarized above, the special committee determined that accepting
the actual value represented by the merger was in the best interest of IBP
shareholders when compared to the risk of seeking to achieve the theoretically
higher values shown in the financial analyses.

BOARD OF DIRECTORS

After learning that DLJMB was interested in making a proposal to acquire
IBP, IBP's board of directors believed it was appropriate to explore the
proposal, inform itself regarding other available alternatives and in the event
it decided to sell the company, to obtain the best price reasonably available to
its shareholders. The board unanimously voted to form the special committee to
act on behalf of IBP's shareholders for purposes of evaluating any proposal
received by DLJMB, negotiating the price and terms of this proposal and
achieving the best price reasonably available for IBP's shareholders. The
special committee, in turn, retained J.P. Morgan to prepare and deliver an
opinion as to the fairness of the merger consideration to the IBP shareholders
from a financial point of view.

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In reaching its determination that the terms of the merger agreement are
fair to and in the best interests of IBP shareholders, the board of directors
adopted the analysis of the special committee as to the fairness of the merger
consideration. In adopting the special committee's analysis, the board
considered and relied upon:

- the process conducted by the special committee in considering the merger;

- the special committee's conclusions, recommendations and unanimous
approval concerning the merger agreement and the transactions contemplated
thereby;

- the special committee's declaration of the merger agreement's
advisability; and

- the opinion of J.P. Morgan that, as of the date of such opinion, based
upon and subject to various considerations, assumptions and limitations
stated therein, the $22.25 per share in cash to be received by IBP's
shareholders in the merger was fair to such shareholders from a financial
point of view, on the basis of the related analyses presented by J.P.
Morgan.

The board of directors also believes that sufficient procedural safeguards
to ensure fairness of the transaction and to permit the special committee to
effectively represent the interests of IBP's shareholders were present. The
board of directors reached this conclusion in view of, among other things:

- the fact that the special committee consisted of disinterested directors
(none of whom have a financial interest in the buyout group or will be
directors or investors in the surviving company or DLJMB) whose sole
purpose was to represent the interests of IBP's shareholders;

- the retention by the special committee of independent legal counsel and
financial advisors;

- the fact that the merger was approved by all of the directors of IBP who
are not employees of IBP or affiliated with DLJMB;

- the fact that the special committee, even though consisting of directors
of IBP and therefore not completely unaffiliated with IBP, is a mechanism
well recognized to provide for fairness in transactions of this type;

- the fact that under the merger agreement, it is a condition of IBP's
obligation to complete the transaction that a majority of unaffiliated
shares voting at the special meeting approve the merger proposal;

- the fully arms-length negotiations that had taken place between DLJMB and
the representatives of the special committee; and

- the fact that the special committee unanimously approved the merger
agreement.

The board of directors noted that the disinterested directors believed there
was no need for them to retain any additional unaffiliated representative to act
on behalf of IBP's shareholders. The board took this factor into account in its
assessment of the fairness of the transaction but determined that, in light of
the factors described above, sufficient procedural safeguards were in place to
ensure the fairness of the transaction.

BASED PRIMARILY UPON THE RECOMMENDATION OF THE SPECIAL COMMITTEE, THE BOARD
OF DIRECTORS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
MERGER PROPOSAL. BECAUSE OF THEIR PROPOSED FINANCIAL INTEREST IN THE BUYOUT
GROUP AFTER THE MERGER, MESSRS. BOND, LEMAN AND PETERSON ABSTAINED FROM VOTING
ON THIS MATTER, AND MR. CHALSTY ABSTAINED DUE TO HIS RELATIONSHIP WITH DLJMB.

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BENEFITS AND DETRIMENTS OF THE MERGER TO IBP AND IBP'S SHAREHOLDERS

BENEFITS AND DETRIMENTS OF THE MERGER TO IBP. IBP believes that the merger
will have the following benefits to IBP:

- by becoming a private company (which will occur as a result of the
merger), the operating flexibility of IBP will be increased by enabling
IBP's management to react with greater speed and flexibility to changing
conditions and opportunities and to make decisions based on IBP's
long-range business interests without the necessary consideration of the
possible adverse short-term effect of such decisions upon the market price
of IBP's common stock and thus possibly upon the interests of IBP's public
shareholders and without the constraint of the public market's emphasis on
quarterly earnings; and

- by reverting to private ownership, the overall operational and
administrative costs arising from and in connection with IBP's status as a
public reporting company will be reduced, and the general availability of
information about IBP that arises from its status as a public reporting
company will be reduced, which may be an advantage in dealing with third
parties.

IBP believes the detriments to IBP of the completion of the merger are:

- the significant cash outlay required to complete the merger and the level
of indebtedness to be incurred in connection with the merger which will
require IBP to dedicate a substantial portion of its cash flow from
operations to make payments on its debt, thereby reducing cash flow
available for general corporate purposes, including capital expenditures
and acquisitions;

- IBP will be unable to use publicly traded securities as acquisition
capital; and

- IBP will be unable to grant options to its employees exercisable for
publicly traded securities.

BENEFITS AND DETRIMENTS OF THE MERGER TO IBP'S SHAREHOLDERS. We believe
that the merger will result in the following benefits to you:

- it will allow you to realize the value of your investment in IBP in cash
at a price which represents a significant premium to the market price for
IBP common stock before the announcement of the merger agreement. The
merger consideration of $22.25 per share represents a 21.5% premium over
the $18.31 closing price of IBP common stock on September 29, 2000, the
trading day immediately preceding the date on which the merger agreement
was announced, an approximately 46.5% premium over the $15.19 closing
price of IBP common stock on August 9, 2000, the date on which DLJMB made
its first proposal, and an approximately 30.4% premium over $17.07, which
is the 30-day average of closing prices of IBP common stock during the
period immediately preceding the announcement; and

- it will eliminate the risk of a decline in the value of your investment in
IBP.

We believe the detriments to you of the completion of the merger are:

- you will cease to have any ownership in IBP and will cease to participate
in IBP's future earnings or growth, if any, or benefit from increases, if
any, in IBP's value; and

- you may recognize a taxable gain as a result of the merger (see
"--Material Federal Income Tax Considerations").

Persons associated with the buyout group will share in these benefits and
detriments to the extent they are reducing their interest in IBP as a result of
the merger. With respect to the common equity of Rawhide Holdings (which will be
sole shareholder of IBP after the merger) that they will own following the
merger, they will have the opportunity to participate in IBP's future earnings
and growth, but they will bear the risk of any decrease in the value, or
increase in the leverage, of IBP.

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All outstanding options to purchase IBP shares will be cancelled at the
effective time of the merger. Holders of options (including Messrs. Peterson and
Bond) will have the right to receive a cash payment in respect of the
cancellation of any outstanding option with an exercise price less than $22.25.
In addition, certain members of IBP management are expected to be given the
opportunity, prior to the effective time of the merger, to waive the right to
this cash payment and to elect instead to convert their options into "phantom"
shares of common stock.

OPINION OF THE FINANCIAL ADVISOR FOR THE SPECIAL COMMITTEE

Pursuant to an engagement letter dated July 21, 2000, the special committee
of the board of directors retained J.P. Morgan to act as the special committee's
exclusive financial advisor in connection with the proposed merger. At the
special committee meeting on October 1, 2000, J.P. Morgan gave its oral opinion,
confirmed in writing, to the special committee that, as of that date and on the
basis of and subject to the matters described in the opinion, the consideration
to be paid to IBP stockholders in the proposed merger is fair, from a financial
point of view, to such stockholders.

We have attached as Appendix C to this proxy statement the full text of the
written opinion of J.P. Morgan dated October 1, 2000, which sets forth the
assumptions made, matters considered and limits on the review undertaken. We
incorporate J.P. Morgan's opinion into this proxy statement by reference and
urge you to read the opinion in its entirety. The summary of the opinion of J.P.
Morgan set forth in this proxy statement is qualified in its entirety by
reference to the full text of such opinion.

J.P. Morgan's opinion is addressed to the special committee, is directed
only to the consideration to be received by the stockholders in the proposed
merger and does not constitute a recommendation to any stockholder as to how to
vote with respect to the proposed merger.

In arriving at its opinion, J.P. Morgan reviewed, among other things:

- the Agreement and Plan of Merger and the Voting Agreement;

- certain publicly available information concerning the business of the
company and of certain other companies in the meat processing and branded
foods sector and the reported market prices for such other companies'
securities;

- publicly available terms of certain transactions involving companies in
the meat processing and branded foods sector and the consideration
received for such companies;

- current and historical market prices of IBP common stock;

- IBP's audited financial statements for the fiscal year ended December 31,
1999, and IBP's unaudited financial statements for the period ended
June 30, 2000;

- certain internal financial analyses and forecasts prepared by IBP's
management; and

- the terms of other business combinations J.P. Morgan deemed relevant.

In addition, J.P. Morgan has held discussions with certain members of the
management of IBP and the investor group with respect to certain aspects of the
merger, and IBP's past and current business operations, IBP's financial
condition and future prospects and operations, the effects of the proposed
merger on IBP's financial condition and future prospects, and certain other
matters J.P. Morgan believed necessary or appropriate to its inquiry. J.P.
Morgan also reviewed other financial studies and analyses and considered such
other information as it deemed appropriate for the purposes of its opinion.

In giving its opinion, J.P. Morgan relied upon and assumed, without
independent verification, the accuracy and completeness of all information that
was publicly available or was furnished to it by the company or the investor
group or otherwise reviewed by J.P. Morgan, and has not assumed any
responsibility or liability for such information. J.P. Morgan did not conduct
any valuation or appraisal

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of any assets or liabilities, and no such valuations or appraisals were provided
to J.P. Morgan. In relying on financial analyses and forecasts provided to it,
J.P. Morgan assumed that they were reasonably prepared based on assumptions
reflecting the best currently available estimates and judgments by IBP's
management as to the expected future results of IBP's operations and IBP's
financial condition to which such analyses or forecasts relate. J. P. Morgan
also assumed that the proposed merger will have the tax consequences described
in discussions with, and materials furnished to J.P. Morgan by, IBP's
representatives, and that the other transactions contemplated by the Agreement
and Plan of Merger will be consummated as described in such agreement. J.P.
Morgan relied as to all legal matters relevant to rendering its opinion upon the
advice of counsel.

In its opinion, J.P. Morgan noted that it was not authorized to and did not
solicit any expressions of interest from any other parties with respect to the
sale of all or any part of the company or any other alternative transaction.
Consequently, J.P. Morgan expressed no opinion as to whether any alternative
transaction might produce consideration for IBP's stockholders in an amount in
excess of that contemplated in the merger.

As is customary in the rendering of fairness opinions, J.P. Morgan based its
opinion on economic, market and other conditions as in effect on, and the
information made available to J.P. Morgan, as of October 1, 2000. Subsequent
developments may affect J.P. Morgan's opinion and J.P. Morgan does not have any
obligation to update, revise or reaffirm its opinion.

In accordance with customary investment banking practice, J.P. Morgan
employed generally accepted valuation methods in reaching its opinion. The
following is a summary of the material financial analyses performed by J.P.
Morgan in connection with its opinion. IBP has presented some of the summaries
of the financial analyses in tabular format. In order to understand the
financial analyses used by J.P. Morgan more fully, you should read the tables
together with the text of each summary. The tables alone do not constitute a
complete description of J.P. Morgan's financial analyses.

HISTORICAL COMMON STOCK PERFORMANCE. J.P. Morgan conducted a historical
analysis of the closing price of IBP's common stock based on closing prices on
the New York Stock Exchange and also examined prices of other companies in the
meat processing and branded foods sector.

- J.P. Morgan noted that in the three-month period prior to October 1, 2000,
IBP's stock price ranged between $14.125 and $18.313 per share.

- J.P. Morgan also pointed out that IBP's stock in the period from
August 9, 2000 (the date of DLJMB's first indicative offer to purchase the
company) until September 29, 2000, outperformed the stocks of Smithfield
Foods, Hormel, ConAgra, Tyson Foods, Pilgrim's Pride and Sanderson Farms,
as well as the S&P 500 index. Specifically, IBP's stock appreciated 20.6%
over this period while the S&P 500 was down 1.6%. The stock prices of
Smithfield Foods, Hormel, ConAgra and Tyson Foods appreciated between 0.2%
and 4.6% over this period.

- J.P. Morgan also found that in the one-year period prior to October 1,
2000, IBP's stock price ranged between $11.188 and $25.00 per share. In
addition, IBP's stock generally followed the trend of an index comprised
of the equally weighted stock prices of Pilgrim's Pride, Sanderson Farms,
WLR Foods, Cagle's, Smithfield Foods, Hormel, ConAgra and Tyson Foods.

- J.P. Morgan also noted that in the three-year period prior to October 1,
2000, IBP's stock price ranged between $11.188 and $29.250 per share. In
addition, IBP's stock performed in line with an index comprised of the
equally weighted stock prices of Pilgrim's Pride, Sanderson Farms, WLR
Foods, Cagle's, Smithfield Foods, Hormel, ConAgra and Tyson Foods.

ANALYSIS OF PREMIUM. J.P. Morgan calculated the premium implied by $22.25
per share relative to certain base prices.

34
<PAGE>
The table below sets forth J.P. Morgan's premium analysis:

<TABLE>
<CAPTION>
PREMIUM
BASE IMPLIED BY
DESCRIPTION OF BASE PRICE $22.25
------------------- -------- ----------
<S> <C> <C>
DLJMB's first offer (August 9).............................. $15.19 46.5%
Last trading day before announcement (Sept. 29)............. 18.31 21.5
5-day prior average......................................... 17.84 24.7
30-day prior average........................................ 17.07 30.4
1 year prior average........................................ 17.13 29.9

1 year prior high........................................... 25.00 (11.0)
3 year prior high........................................... 29.25 (23.9)

1 year prior low............................................ 11.19 98.9
3 year prior low............................................ 11.19 98.9
</TABLE>

J.P. Morgan noted that the premium analysis does not constitute a valuation
technique as such, but serves as a comparison of the proposed merger price to
various base prices.

DISCOUNTED CASH FLOW ANALYSIS. J.P. Morgan conducted a discounted cash flow
analysis for the purpose of determining the fully diluted equity value per share
for IBP's common stock. J.P. Morgan utilized projections provided by IBP's
management team. Shareholders should note the introductory paragraphs to the
section of this proxy statement captioned "Certain Financial Projections", which
are applicable to the projections referred to below as well.

The following table sets forth the summary of these projections:

<TABLE>
<CAPTION>
$ MILLIONS
(EXCEPT PER SHARE AND
PER HEAD INFORMATION) 2000 2001 2002 2003 2004 2005
--------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................... $16,600 $17,300 $18,000 $18,600 $18,800 $19,500
% CHANGE........................... 13.4% 4.2% 4.0% 3.3% 1.1% 3.7%
Earnings Before Interest, Taxes,
Depreciation and Amortization
(EBITDA)......................... $ 709 $ 642 $ 762 $ 861 $ 954 $ 1,035
% MARGIN........................... 4.3% 3.7% 4.2% 4.6% 5.1% 5.3%
Earnings Before Interest and Taxes
(EBIT)........................... $ 540 $ 446 $ 543 $ 619 $ 693 $ 760
% MARGIN........................... 3.3% 2.6% 3.0% 3.3% 3.7% 3.9%
Net Income......................... 240 208 267 318 372 424
Earnings Per Share (EPS)........... $ 2.48 $ 1.93 $ 2.49 $ 2.96 $ 3.48 $ 3.95

Capital expenditures............... $ 500 $ 500 $ 400 $ 400 $ 300 $ 250

Beef EBIT/head..................... $ 27.5 $ 16.5 $ 15.0 $ 16.5 $ 16.5 $ 17.5
Pork EBIT/head..................... 4.0 4.8 4.8 4.8 4.8 4.8
Total Fresh Meats EBIT............. 417 309 362 391 420 462
Foodbrands EBIT.................... 125 137 181 228 273 297
</TABLE>

J.P. Morgan also compared these projections to projections published by
analysts following IBP's stock. J.P. Morgan also noted that the consensus 2001
EPS estimate published by I/B/E/S was $2.66 per share.

35
<PAGE>
The following table sets forth the consensus projections of the analysts
following IBP's stock:

<TABLE>
<CAPTION>
$ MILLIONS
(EXCEPT EPS) 2000 2001
------------ -------- --------
<S> <C> <C>
Revenues.................................................... $15,755 $16,406
% CHANGE.................................................... 12.1% 4.0%
EBITDA...................................................... $ 712 $ 716
% MARGIN.................................................... 4.5% 4.4%
EBIT........................................................ $ 521 $ 523
% MARGIN.................................................... 3.3% 3.2%
Net Income.................................................. $ 269 $ 269
EPS......................................................... $ 2.50 $ 2.66
</TABLE>

J.P. Morgan calculated the unlevered free cash flows that IBP is expected to
generate during the remainder of fiscal year 2000 and fiscal years 2001 through
2005 based on management projections. J.P. Morgan also calculated a range of
terminal asset values of IBP at the end of fiscal 2005 by calculating a range of
terminal cash flows by valuing such terminal cash flows as growing perpetuities.
J.P. Morgan developed terminal cash flows based upon EBIT margins and growth
rates taking into account EBIT margins and growth rates achieved by IBP over the
last 10 years and EBIT margins and growth rates predicted by management for the
fiscal years 2000 through 2005. Specifically, J.P. Morgan utilized a terminal
EBIT margin of 3.9% and terminal sales growth rates of 1.0% to 2.0%. The
unlevered free cash flows and the range of terminal asset values were then
discounted to present values using a range of discount rates from 9.00% to
11.00%, which were chosen by J.P. Morgan based upon an analysis of IBP's
weighted average cost of capital. The present value of the unlevered free cash
flows and the range of terminal asset values were then adjusted for IBP's
estimated October 1, 2000 excess cash, option exercise proceeds and total debt.
Based on the projections and a range of discount rates from 9.50% to 10.50%, the
discounted cash flow analysis indicated a range of equity values of between $20
and $28 per share of IBP stock.

LEVERAGED BUYOUT ANALYSIS. Using management projections, J.P. Morgan
calculated potential returns to equity investors in connection with a potential
leveraged acquisition of the company. For purposes of this analysis, J.P. Morgan
assumed that a transaction would be completed on January 1, 2001, that IBP could
support total maximum debt of approximately $2.8 billion (equal to 4.0x 2000
EBITDA) and that the minimum equity necessary to complete a buyout would have to
be at least 20% of the total capitalization. J.P. Morgan determined the range of
minimal initial common equity investment assuming an acquisition of all stock of
the company at prices ranging from $18 per share to $26 per share assuming such
capital structure constraints. J.P. Morgan calculated the free cash flows
available for annual debt reduction assuming approximately $2.8 billion in
beginning debt and calculated the estimated debt outstanding on December 31,
2005 assuming that such annual cash flows are utilized to reduce debt
outstanding. J.P. Morgan then calculated potential firm values for IBP at such
time assuming a range of exit firm value to 2005 EBITDA multiples of 4.5x to
6.5x. Finally, J.P. Morgan determined the implied equity values on December 31,
2005 based on the estimated firm values and projected debt outstanding at such
time and calculated the implied returns (determined as internal rates of return)
to minimum initial equity invested on January 1, 2001. J.P. Morgan noted that,
assuming an $18 per share acquisition price and a 4.5x 2005 EBITDA firm value
exit multiple, the implied return to equity would be approximately 25%. In
addition, J.P. Morgan noted that, assuming a $24 per share acquisition price and
a 6.5x 2005 EBITDA firm value exit multiple, the implied return to equity would
be approximately 27%.

Based on this analysis, J.P. Morgan established a reference range of $18 per
share to $24 per share which implied a range of annual returns to equity in
leveraged buyout transactions utilizing these assumptions of approximately 10%
to 44%.

36
<PAGE>
PUBLIC RECAPITALIZATION ANALYSIS. Using management projections, J.P. Morgan
calculated the potential stock price of the company assuming the company pursued
a public recapitalization. For purposes of this analysis, J.P. Morgan assumed
that IBP would repurchase its common stock from public stockholders at
repurchase prices ranging from $20 per share to $24 per share. Further, J.P.
Morgan assumed that the maximum debt IBP could support on its balance sheet
would range from 3.5x to 4.0x 2000 EBITDA. J.P. Morgan calculated at each
repurchase price how much stock IBP could repurchase and the resulting pro forma
2003 earnings per share outstanding that would result. J.P. Morgan then
calculated potential 2003 stock prices assuming a price to earnings multiple of
4.0x to 6.0x. J.P. Morgan discounted such potential 2003 stock prices to the
present time assuming discount rates ranging from 14.0% to 16.0%. Finally, J.P.
Morgan determined the blended value available to shareholders by adding the
ratio of each repurchase price times the portion of all outstanding shares
repurchased to the ratio of each discounted implied potential 2003 share price
times the fraction resulting from subtracting such portion from one.

J.P. Morgan noted that the implied blended values derived through this
analysis ranged from $14 per share to $18 per share utilizing management's
projections.

In addition, J.P. Morgan performed a similar analysis utilizing projections
developed by J.P. Morgan based on projections published for the company by
equity analysts, the consensus earnings estimates as published by I/B/E/S and
projected earnings growth rated published by equity analysts. J.P. Morgan noted
that the implied blended values derived through this analysis ranged from $15
per share to $19 per share utilizing such analyst projections.

PUBLIC TRADING MULTIPLES. Using publicly available information, J.P. Morgan
compared selected financial data, ratios and multiples of IBP with similar data,
ratios and multiples for selected publicly traded companies engaged in the meat
processing and branded foods sector. J.P. Morgan noted that it did not deem
these companies fully comparable to IBP and thus evaluated this information for
reference only.

The companies selected by J.P. Morgan were:

Smithfield Foods, Inc.
Hormel Foods Corporation
ConAgra Foods, Inc.
Tyson Foods, Inc.
WLR Foods, Inc.
Sanderson Farms, Inc.
Pilgrim's Pride Corporation
Cagle's, Inc.

For each of these companies, publicly available financial performance
through the twelve months ended June 30, 2000 was measured. In addition, J.P.
Morgan derived estimates of sales, EBITDA, and net income for calendar years
2000 and 2001 from public equity analyst estimates. The analysis produced a
range of multiples for firm value (which J.P. Morgan defined for purposes of its
analyses as market value of common equity and preferred stock plus debt net of
cash and marketable securities and minority interest) over various estimated
financial benchmarks, including sales and EBITDA, and for the market value of
common equity (price) over earnings (the price-to-earnings multiple or P/E). The
analysis indicated firm value to projected 2000 EBITDA multiples from 3.3x to
6.9x and firm value to projected 2001 EBITDA from 2.9x to 6.0x. The analysis
also showed multiples of price to latest twelve months earnings of 3.0x to
17.8x, 2000 P/E ratios of 4.0x to 22.2x and 2001 P/E ratios of 3.7x to 14.2x. In
addition, the analysis showed multiples of equity value to book value ranging
from 0.5x to 3.3x.

37
<PAGE>
J.P. Morgan noted that, utilizing management projections, the proposed
merger implies multiples of firm value to projected 2000 EBITDA of 5.4x and 2001
EBITDA of 5.3x, respectively. In addition, J.P. Morgan noted that the implied
2000 P/E multiple in the merger is 8.9x and the implied 2001 P/E multiple is
11.4x.

SELECTED TRANSACTION ANALYSIS. Using publicly available information, J.P.
Morgan examined selected transactions and transaction proposals involving
companies in the meat processing and branded foods industry. J.P. Morgan noted
that it did not deem these transactions fully comparable to the proposed merger
and thus evaluated this information for reference only.

Specifically, J.P. Morgan reviewed the following transactions:

<TABLE>
<CAPTION>
DATE TARGET ACQUIROR
---- ------ --------
<S> <C> <C>
Sep-00 WLR Foods, Inc. Pilgrim's Pride Corporation
Dec-99 Corporate Brand Food America, Inc. IBP, inc.
Dec-99 Seaboard Corporation -- poultry division ConAgra Foods, Inc.
Sep-99 Tyson Foods, Inc. -- pork division Smithfield Foods, Inc.
Sep-99 Murphy Farms, Inc. Smithfield Foods, Inc.
Jul-99 Thorn Apple Valley, Inc. IBP, inc.
Feb-99 Carroll's Foods, Inc. Smithfield Foods, Inc.
Dec-98 Ross Breeders Investor Group
Jul-98 Nestle USA, Inc. -- Libby's division International Home Foods, Inc.
Jan-98 Goodmark Foods, Inc. ConAgra Foods, Inc.
Dec-97 Schneider Corporation Smithfield Foods, Inc.
Sep-97 Hudson Foods, Inc. Tyson Foods, Inc.
Sep-97 Golden Poultry Co., Inc. Gold Kist, Inc.
Mar-97 Foodbrands America, Inc. IBP, inc.
Sep-95 Cargill, Inc. -- boiler and McCarty units Tyson Foods, Inc.
Jan-94 WLR Foods, Inc. Tyson Foods, Inc.
Aug-89 Holly Farms Corporation Tyson Foods, Inc.
</TABLE>

J.P. Morgan calculated a range of multiples of firm value to EBITDA for the
twelve month periods prior to the respective transaction announcements implied
in these transactions. J.P. Morgan noted that the range of EBITDA multiples
implied by these transactions ranged from 5.0x to 12.6x. J.P. Morgan noted that,
utilizing management projections, the proposed merger implies multiples of firm
value to projected 2000 EBITDA of 5.4x.

The summary set forth above is not a complete description of the analyses or
data presented by J.P. Morgan. The preparation of a fairness opinion is a
complex process and is not necessarily susceptible to partial analysis or
summary description. J.P. Morgan believes that you must consider its opinion,
the summary and its analyses as a whole. Selecting portions of this summary and
these analyses, without considering the analyses as a whole, would create an
incomplete view of the processes underlying the analyses and opinion. In
arriving at its opinion, J.P. Morgan considered the results of all of the
analyses as a whole. No single factor or analysis was determinative of J.P.
Morgan's fairness determination. Rather, the totality of the factors considered
and analyses performed operated collectively to support its determination. J.P.
Morgan based its analysis on assumptions that it deemed reasonable, including
assumptions concerning general business and economic conditions and industry
specific factors. This summary sets forth under the description of each analysis
the other principal assumptions upon which J.P. Morgan based that analysis.
Analyses based upon forecasts of future results are inherently uncertain, as
they are subject to numerous factors or events beyond the control of the parties
and their advisors. Accordingly, these forecasts and analyses are not
necessarily indicative of actual future results, which may be significantly more
or less favorable than suggested by those

38
<PAGE>
analyses. Therefore, neither IBP nor J.P. Morgan nor any other person assumes
responsibility if future results are materially different from those forecasted.

As a part of its investment banking business, J.P. Morgan and its affiliates
are continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, investments for passive and control
purposes, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes. The special committee selected J.P. Morgan to deliver an
opinion with respect to the proposed merger on the basis of such experience.

J.P. Morgan acted as exclusive financial advisor to the special committee of
IBP's board of directors with respect to the proposed merger and received at the
signing of the merger agreement a fee of $1.0 million from IBP for its services.
J.P. Morgan will also be reimbursed for its reasonable expenses and will receive
an additional fee of $4.0 million upon consummation of the proposed merger. In
the ordinary course of their businesses, J.P. Morgan and its affiliates may
actively trade the debt and equity securities of IBP or members of the investor
group and/or affiliates thereof, as applicable, for their own account or for the
accounts of customers and, accordingly, they may at any time hold long or short
positions in such securities.

PURPOSE OF RAWHIDE HOLDINGS AND DLJMB; REASONS FOR AND STRUCTURE OF THE MERGER

PURPOSE OF RAWHIDE HOLDINGS AND DLJMB

The purpose of Rawhide Holdings and DLJMB in proceeding with the merger is
to obtain control of IBP, while providing IBP shareholders with the opportunity
to liquidate their investment in IBP for cash at a price representing a
significant premium to market prices for IBP common stock before the public
announcement of the merger agreement. The desire on behalf of Rawhide Holdings
and DLJMB to complete the merger was motivated largely by the continuing low
valuation placed on IBP's common stock in the public markets despite IBP's
ongoing transition from a traditional packer of fresh beef and pork to a leading
processed foods company supplying value added specialty foods and case ready
meat products to a variety of niche markets. Rawhide Holdings and DLJMB believe
that this focus will over time diversify IBP's revenue and earnings stream as
well as improve its overall growth prospects and profit margins.

Because of IBP's low public market valuation, which Rawhide Holdings and
DLJMB believe is driven by a demand for short-term return and liquidity, Rawhide
Holdings and DLJMB believe that management felt pressured to take further
actions to increase shareholder value. This short-term focus on increasing
shareholder value contributed to the desire of Rawhide Holdings and DLJMB to
undertake the merger. Rawhide Holdings and DLJMB came to believe that IBP's
future could be better managed without the short-term focus of the public
markets, especially in light of IBP's business strategy to become a more
diversified food company with significant operations in processed foods, branded
food products and case ready meat products. Rawhide Holdings and DLJMB believe
that this strategy, which will take significant time and resources to fully
implement, involves risks that would not be readily acceptable to public
shareholders but in the long run will pay off in terms of providing more stable
recurring revenue.

Rawhide Holdings and DLJMB believe that IBP, as a private company, would be
better positioned to implement its business strategy to reduce the proportion of
its revenue derived from traditional fresh beef and pork packing operations and
focus on increasing its presence as a value added processor of specialty food
and case ready meat products. Rawhide Holdings and DLJMB believe that this focus
will lead to a more stable revenue and earnings mix. While DLJMB believes that
IBP's track record for

39
<PAGE>
operating value added processed foods operations is strong so far, this strategy
has many risks, including:

- The pace of change in consumer tastes affecting IBP's end markets has been
rapid and could make some of IBP's branded processed food offerings
obsolete before IBP has recovered the cost of developing them or obtained
the planned return on investment.

- The processed foods business is highly competitive and many of IBP's
competitors may have greater capital, management and other resources than
IBP.

- The strategy of delivering fresh beef and pork in case ready form is
unproven and requires significant capital expenditures. IBP may experience
unforeseen problems including, but not limited to, manufacturing
execution, cost management and customer acceptance that could adversely
affect its ability to obtain its planned return on investment on these
capital expenditures.

Based on the relatively low stock prices of IBP's common stock during the
six months prior to the announcement of the merger agreement, each of Rawhide
Holdings and DLJMB believes that the public markets had determined that the lack
of liquidity, demand for short-term results and the risks outlined above
outweigh the potential benefits of IBP's business strategy. Each of Rawhide
Holdings and DLJMB, however, believes that long-term, such risks do not outweigh
the potential benefits and therefore desire to effect the merger. The low
trading price of IBP's common stock was a significant factor in the decision of
Rawhide Holdings and DLJMB to proceed with the merger as they believed IBP's
stock price at the time of their offer did not reflect the long-term value of
IBP's business which, based on their confidence in IBP's business for the
reasons set forth above, they hoped to realize.

REASONS FOR AND STRUCTURE OF THE MERGER

DLJMB continuously evaluates investment opportunities on both a domestic and
international basis. As a result of such continual evaluation, DLJMB concluded
that IBP might be an attractive candidate for a possible investment. DLJMB based
its decision to proceed with the proposed transaction on its assessment of the
values inherent in IBP and the potential investment returns that a transaction
of the type ultimately negotiated and described in this proxy statement could
yield for DLJMB.

After meeting with Robert L. Peterson and Richard L. Bond on June 29, 2000,
DLJMB approached ADM, Booth Creek and Jeffrey J. Joyce, all of whom were
existing stockholders of IBP, to assess whether they would be interested in
participating in the proposed transaction with DLJMB as an additional source of
equity capital.

As mentioned above, the benefit of the merger to Rawhide Holdings and DLJMB
is the acquisition of control of a company that it has assessed has certain
inherent qualities.

The detriments to the completion of the merger to Rawhide Holdings and DLJMB
include:

- the significant cash outlay required by Rawhide Holdings and DLJMB to
complete the merger; and

- the surviving company's inability to use publicly traded equity securities
as acquisition capital.

POSITION OF RAWHIDE HOLDINGS AND DLJMB

The rules of the SEC require each of Rawhide Holdings and DLJMB to express
its belief as to the fairness of the merger to IBP's shareholders (excluding
persons associated with the buyout group). As described in more detail under
"Special Factors--Background of the Merger," the terms of the merger agreement
and the voting agreement were negotiated at arms' length among IBP, Rawhide
Acquisition,

40
<PAGE>
Rawhide Holdings, ADM, Booth Creek and Jeffrey J. Joyce. Neither Rawhide
Holdings nor DLJMB independently considered the fairness of the merger
consideration to IBP's shareholders. Based exclusively on the evaluation of the
merger by the special committee, its financial advisor, and the board of
directors, including a review of the description in this proxy statement of the
information and factors considered by each of them in concluding that the terms
of the merger agreement are fair to and in the best interests of IBP's
shareholders, each of Rawhide Holdings and DLJMB has adopted the analysis of the
special committee as to the fairness of the merger consideration and believes
that the terms of the merger agreement are fair to and in the best interests of
IBP's shareholders (excluding persons associated with the buyout group).

Based exclusively on the evaluation of the special committee and the board
of directors of IBP, including a review of the description in this proxy
statement of the factors that the board of directors considered in rendering
their conclusion that sufficient procedural safeguards to ensure the fairness of
the transaction were present, each of Rawhide Holdings and DLJMB believes that
sufficient procedural safeguards to ensure the fairness of the transaction were
present.

While there may be some detriments to IBP's shareholders (excluding persons
associated with the buyout group) as a result of the merger, such as ceasing to
have an interest in IBP's future growth, if any, going forward, IBP's
shareholders will benefit from the merger, if it is approved, since the merger
consideration to be paid to the shareholders represents a significant premium
over the market price of IBP's shares prior to the public announcement of the
merger agreement. Neither Rawhide Holdings nor DLJMB has received any report,
opinion or appraisal from an outside party which is materially related to the
merger agreement or the merger. In particular, neither Rawhide Holdings nor
DLJMB has received any report, opinion or appraisal relating to the fairness of
the merger agreement and the merger to IBP or its shareholders.

INTERESTS OF CERTAIN PERSONS IN THE MERGERS; CERTAIN IBP BENEFIT PLANS; AND
CONTINUED OWNERSHIP OF IBP AFTER THE MERGER

GENERAL

In considering the recommendation of the special committee and the board of
directors, you should be aware that certain of IBP's officers and directors have
interests in the merger or have certain relationships, including those referred
to below, that present actual or potential, or the appearance of actual or
potential, conflicts of interest in connection with the merger. The special
committee and the board of directors were aware of these actual or potential
conflicts of interest and considered them along with other matters described
under "--Recommendation of the Special Committee and the Board of Directors;
Purpose and Reasons for the Merger."

CONTINUING OWNERSHIP

Immediately prior to the merger, Robert L. Peterson, Richard L. Bond and
certain other members of IBP management are expected to acquire shares of
Rawhide Holdings common stock both for cash and in exchange for shares of IBP
common stock valued at $22.25 per share.

It is contemplated that certain management and officers of IBP and its
subsidiaries will be offered the opportunity to retain all or a portion of their
interest in IBP after the merger becomes effective. Just before the merger
becomes effective, such management and officers who so elect are expected to
exchange a portion of their shares of IBP common stock valued at $22.25 per
share for newly authorized shares of Rawhide Holdings common stock. The process
of exchanging some of their shares of IBP common stock for Rawhide Holdings
shares would allow them to retain an equity interest through the merger without
suffering adverse tax consequences.

41
<PAGE>
Robert L. Peterson currently intends to exchange $2,500,000 in cash and
467,200 shares of IBP common stock he already owns for Rawhide Holdings common
stock. Richard L. Bond currently intends to exchange $1,500,000 in cash and
8,350 shares of IBP common stock he already owns for Rawhide Holdings common
stock.

In addition, following the merger, it is contemplated that equity plans and
other incentives relating to IBP's equity securities will be made available to
some of IBP's employees (including the members of IBP management referred to
above). It is contemplated that the equity plans will involve the opportunity to
invest directly in the common stock of Rawhide Holdings and the availability of
non-recourse loans to participating employees.

MANAGEMENT INVESTMENT PROGRAM

Rawhide Holdings expects to adopt a program under which members of
management may purchase up to a total of 8% of the common stock of Rawhide
Holdings (excluding warrants and options) at $22.25 per share. It is
contemplated that non-recourse loans to purchase a portion of the common stock
available for purchase under this program will be made available to members of
management. The opportunity to purchase shares under the management investment
program will be allocated among members of management by Robert L. Peterson,
subject to the reasonable approval of DLJMB.

NEW OPTION PLAN

Rawhide Holdings expects to adopt a new option plan, to take effect as of
the effective time of the merger, under which options to purchase up to a total
of 10% of the common stock of Rawhide Holdings (excluding warrants and options)
will be available for award to members of management at $22.25 per share. Of the
options to be awarded under the plan, 60% will vest based on the lapse of time,
at the fifth anniversary of the effective time of the merger (or, if sooner,
upon a change in control), provided the optionee remains an employee as of that
date. The remaining 40% of options available for award under the plan will vest
based on achievement of specified EBITDA targets for the five fiscal years after
the effective time of the merger. Options under the new option plan will be
allocated by Robert L. Peterson, subject to the reasonable approval of DLJMB.

TREATMENT OF EXISTING OPTIONS; PHANTOM EQUITY PROGRAM

Certain directors, officers and employees have previously received options
to acquire shares of IBP common stock under various IBP stock plans. At the
effective time of the merger, all outstanding options will be cancelled. In
general, each option with an exercise price of less than $22.25 held by such
individuals will be cashed out at the effective time of the merger, in the
amount of the difference between $22.25 and the exercise price of the option,
multiplied by the number of shares to which the option relates. No payment will
be made with respect to any option with an exercise price greater than or equal
to $22.25. Certain members of management are expected to be given the
opportunity, in advance of the effective time of the merger, to waive the right
to this cash payment and to elect instead to convert that right into "phantom"
shares of common stock, as further described below.

The table below shows the number of options currently held by each of IBP's
executive officers and directors, and all other individuals as a group, and the
amounts to be paid to these individuals at the effective time of the merger in
exchange for cancellation of these options, assuming none of such

42
<PAGE>
individuals elected to convert their right to receive those amounts into phantom
shares of common stock.

<TABLE>
<CAPTION>
OUTSTANDING PAYMENT AT
NAME OPTIONS* EFFECTIVE TIME
---- ----------- --------------
<S> <C> <C>
INDEPENDENT DIRECTORS:
John S. Chalsty........................................... 6,500 $ 45,531.00
Wendy L. Gramm............................................ 6,500 $ 43,281.25
John Jacobson, Jr......................................... 2,500 $ 5,781.25
Martin A. Massengale...................................... 3,000 $ 4,531.25
Michael L. Sanem.......................................... 2,500 $ 5,781.25
Jo Ann R. Smith........................................... 4,300 $ 19,131.25
EXECUTIVE OFFICERS:
Richard L. Bond........................................... 218,020 $ 1,155,155.00
Randy Devening............................................ 22,000 $ 110,250.00
Craig J. Hart............................................. 32,890 $ 148,732.50
Eugene D. Leman........................................... 145,200 $ 866,987.50
Robert L. Peterson........................................ 420,000 $ 2,608,125.00
Larry Shipley............................................. 87,660 $ 352,620.00
ALL OTHER INDIVIDUALS AS A GROUP............................ 4,025,714 $19,920,921.63
* INCLUDES BOTH IN AND OUT OF THE MONEY OPTIONS
</TABLE>

The actual amounts to be paid to these persons will be reduced by any
applicable federal and state income and payroll tax withholding.

Certain members of IBP's senior management team to be designated by Robert
L. Peterson are expected to be offered an irrevocable election to either receive
the cash-out of their option values as described above, or instead to convert
the right to that cash-out into "phantom" common shares. If a member of
management makes this election, he or she will be awarded a number of phantom
shares with a value equal to the cash amount to which he would have been
entitled in connection with his or her options, as described above. Each phantom
share will represent an unfunded, contractual obligation on the part of Rawhide
Holdings to issue the holder a common share at the earlier of the fifth
anniversary of the effective time of the merger, in limited circumstances on the
holder's termination of employment, or an initial public offering. Each phantom
share will be immediately fully vested upon the date of grant.

TREATMENT OF EXISTING RESTRICTED SHARES

Certain officers and employees have received restricted shares of IBP common
stock under various IBP stock plans. Vesting of all restricted shares will
accelerate upon the effective time of the merger and, unless they elect
otherwise as described below, the holders will receive merger consideration on
the same basis as all other shareholders of IBP. If the holder of restricted
shares so elects, the merger consideration to which he or she would otherwise be
entitled will not be paid at the effective time of the merger, but will instead
be deferred under the terms of IBP's Retirement Income Plan, a nonqualified
deferred compensation arrangement.

PUT AND CALL RIGHTS

It is contemplated that members of management will have the right to sell,
or "put," their shares of Rawhide Holdings common stock to Rawhide Holdings upon
termination of employment under certain circumstances. For example, upon an
executive's death or disability or retirement on or after the later of his or
her 65th birthday and the sixth anniversary of the effective time of the merger,
the executive (or his or her estate) may sell all shares purchased under the
management investment program and new option plan described above to Rawhide
Holdings at fair market value. Members of management also have the right to put
(and, in some cases, Rawhide Holdings has the right to call) their shares upon
termination of employment for other reasons. The existence of these rights, and
the prices at which they may be exercised, depend upon the plan or program under
which the shares were acquired and the circumstances of termination of
employment.

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<PAGE>
EMPLOYMENT AGREEMENTS

It is contemplated that Rawhide Acquisition will enter into employment
agreements with Robert L. Peterson and Richard L. Bond, which will become
effective upon the completion of the merger.

Mr. Peterson's new employment agreement is expected to have a term of five
years, during the first two years of which he will serve as Chief Executive
Officer and receive annual salary of $1 million, and during the last three years
of which he will serve as Chairman of the board of directors of Rawhide Holdings
and receive annual salary of $500,000, adjusted for inflation. The agreement is
also expected to provide for a one-time grant to Mr. Peterson, as of the
effective time of the merger, of restricted common stock of Rawhide Holdings
with a value of $21 million (valued at $22.25 per share). This restricted stock
will vest as to 20% per year over the five-year period beginning on the
effective time of the merger. In addition, Mr. Peterson will be eligible for
awards under the new option plan described above, and for annual bonuses at the
discretion of the board of directors of Rawhide Holdings. The agreement is
expected to provide that if Mr. Peterson is involuntarily terminated without
"cause", voluntarily terminates for "good reason," as those terms are defined in
the agreement, or dies or becomes disabled, he will receive a lump sum payment
equal to five times his annual base salary for the prior calendar year and full
vesting of restricted stock and any unvested time-vesting options. "Good reason"
will be defined to include the failure by the board of directors of Rawhide
Holdings to follow Mr. Peterson's good faith recommendation as to two or more
significant policy decisions during the term of his agreement.

Mr. Bond's new employment agreement is expected to be similar to
Mr. Peterson's, except that:

- during the first two years of the agreement's term Mr. Bond will serve as
Chief Operating Officer, and during the last three years he will serve as
Chief Executive Officer;

- Mr. Bond will receive an annual salary of $800,000 during the first year
of the agreement's term, $900,000 during the second year, and $1 million,
adjusted for inflation, during the remaining three years;

- Mr. Bond will receive a minimum annual bonus of 0.3% of the surviving
corporation's operating earnings (as adjusted consistent with his current
bonus plan) during the first year of the agreement's term, 0.4% during the
second year, and 0.5% during each of the remaining three years;

- Mr. Bond is not entitled to an award of restricted stock; and

- the definition of "good reason" under Mr. Bond's agreement does not
include the board's failure to follow recommendations by Mr. Peterson, but
does include enhanced protection against demotion or reduction in
Mr. Bond's responsibilities following a departure by Mr. Peterson for good
reason.

The following table illustrates the amount of the lump sum payments that
Messrs. Peterson and Bond would be entitled to receive under the agreements
described above if their employment were terminated within six months after the
effective date of the merger:

<TABLE>
<CAPTION>
AMOUNT OF
EXECUTIVE PAYMENT
--------- ------------
<S> <C>
Robert L. Peterson..................................... $5.0 million
Richard L. Bond........................................ $4.0 million
</TABLE>

OTHER SEVERANCE AGREEMENTS

Rawhide Acquisition is also expected to enter into severance agreements with
four other executives, to be designated by Mr. Peterson. These agreements will
provide for benefits upon

44
<PAGE>
termination similar to the severance benefits provided under Mr. Bond's
employment agreement, as described above, except that the cash lump sum to be
paid upon termination of employment will be equal to two times the executive's
annual base salary.

OTHER BENEFIT AGREEMENTS

It is contemplated that a transaction bonus pool totaling $6 million will be
made available for allocation among the members of management immediately after
the effective time of the merger. Awards from the bonus pool will be allocated
by Mr. Peterson, subject to the reasonable approval of DLJMB.

In addition, for a period of at least five years following the effective
time of the merger, Rawhide Holdings has agreed to maintain employee benefits
and cash compensation providing substantially comparable value, in the
aggregate, to the employee benefits and cash compensation currently provided by
IBP to its employees. During the 30-month period beginning at the effective time
of the merger, the Chief Executive Officer of Rawhide Holdings will have the
right to direct that its Retirement Income Plan, a nonqualified deferred
compensation arrangement, be terminated and the benefits under the plan
immediately distributed.

OTHER EMPLOYMENT ARRANGEMENTS

The merger agreement provides that, for a period of at least one year
following the effective time of the merger, Rawhide Holdings will cause IBP and
its subsidiaries to provide benefits to their respective employees (other than
those represented for purposes of collective bargaining) which will, in the
aggregate, be comparable to those currently provided by IBP and its subsidiaries
to its employees (other than any stock option or other equity based incentive
plan currently provided by IBP).

INDEMNIFICATION AND INSURANCE

Pursuant to the merger agreement, for six years after the closing date of
the merger, Rawhide Holdings will cause the surviving corporation to indemnify
and hold harmless IBP's present and former officers and directors for acts or
omissions occurring before the close of the merger to the extent provided under
IBP's articles of incorporation and by-laws in effect as of the date of the
merger agreement. For six years after the close of the merger, Rawhide Holdings
will cause the surviving corporation to provide officers' and directors'
liability insurance for acts or omissions occurring before the close of the
merger covering each such person currently covered by IBP's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on October 1, 2000;
provided, that if the cost of such insurance on a per annum basis exceeds 200%
of the amount per annum IBP paid in its last fiscal year, then Rawhide Holdings
will cause the surviving corporation to provide only such coverage as is
available at a cost of 200% of such amount.

TRANSACTIONS IMMEDIATELY PRIOR TO THE MERGER

Immediately prior to the merger:

- DLJMB will purchase some of the shares of IBP common stock owned by ADM,
Booth Creek and Jeffrey J. Joyce for $22.25 per share.

45
<PAGE>
- DLJMB will purchase shares of Rawhide Holdings common stock, senior
discount debentures of Rawhide Holdings and warrants to acquire Rawhide
Holdings common stock. The purchase price will be payable in cash and in
shares of IBP common stock valued at $22.25 per share.

- Robert L. Peterson, Richard L. Bond and certain other members of IBP
management will acquire shares of Rawhide Holdings common stock. The
purchase price will be payable in cash and in shares of IBP common stock
valued at $22.25 per share.

CONSEQUENCES OF THE MERGER

Pursuant to the merger agreement, following approval of the merger proposal
and subject to the fulfillment or waiver of certain conditions, Rawhide
Acquisition will be merged with IBP, and IBP will continue as the surviving
company in the merger and a wholly-owned subsidiary of Rawhide Holdings. As a
result of the merger, you will be entitled to receive $22.25 in cash for each of
your shares of IBP common stock outstanding at the time of the merger, shares of
IBP common stock held by Rawhide Holdings will be cancelled and each share of
common stock of Rawhide Acquisition will be converted into one share of common
stock of IBP, the surviving corporation.

Following the merger, IBP's shareholders (excluding ADM, Booth Creek and
Jeffrey J. Joyce, as well as Robert L. Peterson, Richard L. Bond and certain
other members of IBP management) will cease to participate in IBP's future
earnings or growth or benefit from any increases, if any, in the value of IBP
stock. As a result of the merger, approximately 61.3% of Rawhide Holdings common
stock outstanding immediately after the merger will be owned by DLJMB, 24.5% by
ADM, 4.4% by Booth Creek and Jeffrey J. Joyce, and 9.8% by Robert L. Peterson,
Richard L. Bond and certain other members of IBP management.

IBP's common stock will be delisted from the New York Stock Exchange and
will not be eligible for listing or trading on any exchange. IBP common stock is
currently registered under the Securities Exchange Act of 1934. Following the
merger, registration of IBP common stock under the Exchange Act will be
terminated, and, other than as a result of IBP issuing any registered
indebtedness, IBP will be relieved of the obligation to comply with the public
reporting requirements of the Exchange Act.

At the effective time of the merger, options to purchase common stock under
IBP's stock option plans will be cancelled, and the holders of such options will
have the right to receive an amount of cash equal to $22.25 less the per share
exercise price of that option, with all "out of the money" options terminated.
See "Special Factors--Interests of Certain Persons in the Merger; Certain
Company Benefit Plans; and Continued Ownership of IBP."

The Certificate of Incorporation of IBP in effect immediately before the
merger will remain IBP's Certificate of Incorporation immediately after the
merger; however, the bylaws of Rawhide Holdings will be the bylaws of IBP
immediately after the merger, in each case until amended in accordance with
applicable law.

IBP's executive officers immediately before the merger will remain as IBP's
executive officers immediately after the merger. Rawhide Acquisition's directors
immediately prior to the merger will become IBP's directors immediately after
the merger.

PLANS FOR IBP AFTER THE MERGER

EXTRAORDINARY CORPORATE TRANSACTIONS

Except as described in this proxy statement, IBP has not, and IBP has been
advised by Rawhide Holdings and DLJMB that they have not, approved any:

- specific plans or proposals for any extraordinary corporate transaction
involving IBP, as the surviving company after the completion of the
merger;

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<PAGE>
- sale or transfer of a material amount of assets currently held by IBP
after the completion of the merger; or

- specific plans or arrangements regarding the repayment of the financing of
the merger consideration, except that DLJMB may reduce its equity
participation in IBP to the extent of (i) any equity participation by
employees following the completion of the merger or (ii) any equity
participation by one or more institutional co-investors.

MANAGEMENT

IBP has been advised by Rawhide Holdings and DLJMB that it intends to retain
IBP's senior management in comparable positions after the merger. Rawhide
Acquisition will enter into employment agreements which will become effective
upon the completion of the merger. See "--Interests of Certain Persons in the
Merger; Certain IBP Benefit Plans; and Continued Ownership of IBP After the
Merger." It is contemplated that after the merger, the board of directors of
Rawhide Holdings will consist of nine members, including Robert L. Peterson and
Richard L. Bond. The remaining directors of Rawhide Holdings will include five
individuals to be designated by DLJMB, one individual to be designated by Booth
Creek, and one individual to be designated by ADM.

SHARE OWNERSHIP

IBP has been advised by DLJMB that after the merger it intends to hold its
shares of capital stock of IBP (through Rawhide Holdings) for long-term
investment.

CAPITALIZATION

The equity capitalization of the surviving company following the merger is
expected to consist of common stock, 100% of which will be owned by Rawhide
Holdings. The equity capitalization of Rawhide Holdings following the merger is
expected to consist of a single class of common stock and warrants to acquire
common stock.

RIGHT TO CHANGE PLANS

Although DLJMB believes it is unlikely, it reserves the right to change its
plans at any time. Accordingly, DLJMB may elect to sell, transfer or otherwise
dispose of all or any portion of the shares of capital stock owned by it after
the merger or may decide that the surviving company should sell, transfer or
otherwise dispose of all or any portion of its assets in each case to one or
more of its affiliates or to any other parties as warranted by future
conditions. Although each of Rawhide Holdings and DLJMB believes it is unlikely,
they reserve the right to make whatever personnel changes to the present
management of IBP they deem necessary after completion of the merger.

CONDUCT OF THE BUSINESS OF IBP IF THE MERGER IS NOT COMPLETED

If the merger is not completed, the board of directors expects to retain the
current management team, although there can be no assurance it will be
successful in doing so. There are no plans in such circumstances to operate the
business in a manner substantially different from the manner it is operated
today. From time to time, IBP will evaluate and review its business operations,
properties, dividend policy and capitalization, among other things, make such
changes as are deemed appropriate and continue to seek to identify strategic
alternatives to maximize shareholder value.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following discussion is a summary of material United States federal
income tax consequences of the merger to our shareholders whose shares of common
stock are held as capital assets and

47
<PAGE>
converted into the right to receive $22.25 cash per share in the merger. Because
it is a summary, it does not include an analysis of all potential tax effects of
the merger.

For example, this summary:

- does not consider the effect of any applicable state, local or foreign tax
laws;

- does not address all aspects of federal income taxation that may affect
particular shareholders in light of their particular circumstances;

- is not intended for shareholders that may be subject to special federal
income tax rules, such as:

- insurance companies,

- tax-exempt organizations,

- financial institutions or broker-dealers,

- shareholders who hold their common stock as part of a hedge, straddle or
conversion transaction,

- shareholders who acquired their common stock pursuant to the exercise of
an employee stock option or otherwise as compensation, and

- shareholders who are not citizens or residents of the United States or
that are foreign corporations, foreign partnerships or foreign estates or
trusts as to the United States;

- does not address tax consequences to shareholders who exercise their
dissenters' rights;

- does not address tax consequences to holders of stock options or
restricted stock awards; and

- does not address tax consequences to Rawhide Holdings, other parties that
are part of, or are associated with, the buyout group, any of their
affiliates or any person who would be treated as constructively owning IBP
common stock after the merger by reason of the attribution rules of
Section 318 of the Internal Revenue Code.

This summary assumes that shareholders have held their common stock as a
"capital asset" under the Internal Revenue Code. This summary is based on the
current provisions of the Internal Revenue Code, applicable Treasury
Regulations, judicial authorities and administrative rulings and practice.
Future legislative, judicial or administrative changes or interpretations could
modify the discussion set forth in this summary. Any such changes or
interpretations could be retroactive and could affect the tax consequences of
the merger to you.

You should consult your own tax advisor with respect to the particular tax
consequences to you of the merger, including the applicability and effect of any
state, local or foreign tax laws, and of changes in applicable tax laws.

TREATMENT OF HOLDERS OF COMMON STOCK. The exchange of your shares of IBP
common stock for $22.25 per share in cash in the merger will be taxable to you.
You will recognize a capital gain or loss equal to the difference between
(1) the amount of cash you receive in the merger and (2) your tax basis in the
common stock. Generally, your tax basis in your common stock will be equal to
what you paid for your stock.

If you are an individual, (1) capital gain will be taxable at a maximum
capital gains rate of 20% if you held your shares for more than one year at the
time of the merger and (2) capital loss may generally only be offset against
capital gains or up to $3,000 per year of ordinary income, with a carryover of
capital loss to the extent unused.

BACKUP WITHHOLDING. You may be subject to backup withholding at the rate of
31% with respect to the gross proceeds you receive from the exchange of your
common stock unless you:

48
<PAGE>
- are a corporation or other exempt recipient and, when required, establish
this exemption; or

- provide your correct taxpayer identification number, certify that you are
not currently subject to backup withholding and otherwise comply with
applicable requirements of the backup withholding rules.

If you do not provide us with your correct taxpayer identification number,
you may be subject to penalties imposed by the Internal Revenue Service. Any
amount withheld under these rules will be creditable against your federal income
tax liability, provided that you forward appropriate information to the Internal
Revenue Service. We will report to you and to the Internal Revenue Service the
amount of any reportable payment made to you (including payments made to you
pursuant to the merger) and any amount withheld pursuant to the merger.

FINANCING; SOURCE OF FUNDS

The amount of funds required to (1) fund the payment of the merger
consideration and the surrender of outstanding stock options, (2) refinance
certain existing indebtedness of IBP and (3) pay the fees and expenses in
connection with the merger is estimated to be $3,331.3 million.

Rawhide Holdings and Rawhide Acquisition intend to finance these
transactions and the related fees and expenses from concurrent equity and debt
financings, as follows:

- approximately $1,281.3 million of Rawhide Holdings common stock and senior
discount debentures of Rawhide Holdings with warrants to purchase Rawhide
Holdings common stock will be purchased by DLJMB and its affiliates, ADM,
Booth Creek and Jeffrey J. Joyce, as well as Robert L. Peterson, Richard
L. Bond and certain other members of IBP management;

In addition, all of IBP's outstanding 7.95% Senior Notes due 2010, 7.45%
Senior Notes due 2007, 6.125% Senior Notes due 2006 and 7.125% Senior Notes due
2026 in an aggregate principal amount of approximately $625.0 million, and
referred to in this proxy statement as the continuing senior notes, and certain
existing capital leases of IBP in an aggregate principal amount of approximately
$26.7 million will remain outstanding after the merger.

At the time the merger becomes effective, IBP is expected to borrow the full
amount of the $1,150.0 million term loans.

On October 1, 2000, DLJ Merchant Banking III, Inc. received an executed
commitment letter from each of DLJ Capital Funding, Inc. and DLJ Bridge
Finance, Inc. under which DLJ Capital Funding, Inc. agreed to provide the new
credit facilities, and DLJ Bridge Finance, Inc. agreed, in the event IBP is
unable to raise funds through a public offering or private placement, to
purchase the entire amount of the senior unsecured bridge notes and senior
subordinated bridge notes.

Also on October 1, 2000, Rawhide Holdings received an executed commitment
letter from DLJMB, ADM, Booth Creek, Jeffrey J. Joyce, Robert L. Peterson and
Richard L. Bond under which

49
<PAGE>
each of them agreed to purchase, in the case of ADM, Booth Creek and
Messrs. Joyce, Peterson and Bond, Rawhide Holdings common stock and, in the case
of DLJMB, Rawhide Holdings common stock and senior discount debentures of
Rawhide Holdings with warrants to purchase Rawhide Holdings common stock, in an
aggregate amount of $1,194.2 million.

DLJMB expects that it may seek to have a portion of its equity investment in
Rawhide Holdings made by one or more co-investors. DLJMB does not expect that,
as a result of any such co-investment, its ownership percentage of Rawhide
Holdings common stock would be less than 45%.

Each of these commitments is subject to customary conditions, including the
negotiation, execution and delivery of definitive documentation with respect to
such commitment.

It is anticipated that:

- The $1,650.0 million senior secured credit facility will consist of a
revolving credit facility, a tranche A term loan and a tranche B term
loan. The tranche A term loan and the revolving credit facility will
mature five and one-half years after the closing of the merger, and the
tranche B term loan will mature seven years after the closing of the
merger;

- The new credit facility will be subject to a potential, although
uncommitted, increase of up to $50 million, at IBP's request, at any time
prior to the date falling five and one-half years after the closing of the
merger. The increase will only be available if one or more of the lending
institutions or other financial institutions agree to finance this
increase;

- Loans under the new credit facility will bear interest, at IBP's option,
at either the base rate or reserve-adjusted LIBOR plus, in each case, an
applicable margin;

- All direct and indirect domestic subsidiaries of IBP will be guarantors of
the new credit facility; and

- The new credit facility will be secured by substantially all of the assets
of IBP and such subsidiaries, the capital stock of IBP and all direct and
indirect domestic subsidiaries of IBP, 65% of the capital stock of all
foreign direct subsidiaries of IBP and its direct and indirect domestic
subsidiaries and all intercompany indebtedness held by IBP and its direct
and indirect domestic subsidiaries. As required under the terms of the
indentures governing the continuing senior notes, such continuing senior
notes will be secured equally and ratably with the new credit facility.

It is anticipated that any public offering of senior unsecured notes would
be senior unsecured notes due 2011 carrying interest at a rate to be determined.
These notes would be general unsecured obligations and will rank, except for
being unsecured, PARI PASSU with IBP's other senior obligations, including any
borrowings under the new credit facility and the continuing senior notes.

It is anticipated that any public offering of senior subordinated notes
would be senior subordinated notes due 2011 carrying interest at a rate to be
determined. These notes would be general unsecured obligations and will rank
junior to IBP's senior obligations, including any borrowings under the new
credit facility, the continuing senior notes and the senior unsecured notes.

The offering of the senior unsecured notes and senior subordinated notes
would be conditioned on the closing of the merger.

FEES AND EXPENSES

IBP estimates that it will incur merger-related fees and expenses,
consisting primarily of commitment fees under certain debt arrangements,
financial advisory fees, SEC filing fees, fees and expenses of investment
bankers, attorneys and accountants and other related charges, totaling

50
<PAGE>
approximately $ million, assuming the merger is completed. This amount
consists of the following estimated fees:

<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
----------- -----------
(DOLLARS IN
MILLIONS)
<S> <C>
Advisory fees and expenses.................................. $ 25.0
Debt financing fees and expenses............................ 69.0
Legal fees and expenses..................................... TBD
Accounting fees and expenses................................ TBD
SEC filing fee.............................................. .5
Printing, solicitation and mailing costs.................... TBD
Miscellaneous and other expenses............................ $ 22.5
------
Total....................................................... $ TBD
</TABLE>

REGULATORY REQUIREMENTS

In connection with the merger, IBP will be required to make a number of
filings with and obtain a number of approvals from various federal and state
governmental agencies, including:

- filing of a certificate of merger with the Secretary of State of the State
of Delaware in accordance with the Delaware General Corporation Law after
the approval of the merger proposal by IBP shareholders;

- complying with federal and state securities laws; and

- notifying and furnishing certain information to the Federal Trade
Commission and the Antitrust Division of the Department of Justice
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or the HSR Act.

Under the HSR Act, the merger may not be completed until the expiration of a
waiting period of 30 calendar days following the receipt of all required
filings, unless the waiting period is earlier terminated by the FTC or the
Antitrust Division, or unless the waiting period is extended by a request for
additional information or documentary material. It is anticipated that IBP,
DLJMB, Rawhide Acquisition, ADM and Booth Creek will make the requisite filings
under the HSR Act. Each of the filing parties believes that consummation of the
merger will not violate any antitrust laws. The FTC and the Antitrust Division
have the authority to challenge the merger on antitrust grounds before or after
the merger is completed. Each state in which IBP, Rawhide Holdings, Rawhide
Acquisition or ADM has operations may also review the merger under state
antitrust laws.

SHAREHOLDER LAWSUITS CHALLENGING THE MERGER

Between October 2 and November 1, 2000, fourteen actions were filed in the
Delaware Court of Chancery entitled: Baruch Mappa v. Richard L. Bond et al.,
Civil Action No. 18373-NC; Michael Taragin v. Richard L. Bond et al., Civil
Action No. 18374-NC; David Shaev v. Rawhide Acquisition Corporation et al.,
Civil Action No. 18375-NC; Charles Miller v. Richard L. Bond et al., Civil
Action No. 18376-NC; Olga Fried v. Richard L. Bond et al., Civil Action
No.18377-NC; Peter Robbins v. IBP, inc. et al., Civil Action No. 18382-NC; Jerry
Krim and Jeffrey Kassoway v. IBP, Inc., et al., Civil Action No. 18383-NC;
Harriet Rand v. Richard L. Bond et al., Civil Action No. 18385-NC; and Albert
Ominsky v. Richard L. Bond et al., Civil Action No. 18386-NC; C. Oliver Burt v.
Richard L. Bond et al., Civil Action No. 18398-NC; Eric Meyer v. Richard L. Bond
et al., Civil Action No. 18399-NC; Lousie E. Murray v. Rawhide Acquisition
Corporation et al., Civil Action No. 18411-NC, Marvin Masel v. Richard L. Bond
et al., Civil Action No. 18413-NC and Rocco Landesman v. Richard L. Bond et al.,
Civil Action No. 18474-NC. On November 13, 2000, the Delaware Court of Chancery
entered an order

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<PAGE>
directing the consolidation of these actions into a single action. At a hearing
on November 21, 2000, the Delaware Court of Chancery stated that it would
designate the Landesman complaint as the consolidated complaint. In addition,
one action was filed in the United States District Court for the District of
South Dakota on November 8, 2000, entitled Teamsters Local Nos. 175 and 505
Pension Trust Fund v. IBP, inc. et al, Civ. No. 00-4211. These actions were
filed by persons alleging to be shareholders of IBP. Though the Landesman and
Teamsters complaints are not identical, both complaints name as defendants IBP,
each of IBP's directors, DLJ and ADM. Seeking to represent a purported class of
IBP's shareholders excluding the defendants, plaintiffs in both actions
generally allege that IBP's directors, aided and abetted by the other
defendants, have breached their fiduciary duties to plaintiffs and the alleged
class by (1) agreeing to sell IBP at an inadequate price (2) advancing their
personal interests at the expense of IBP's public shareholders and (3) erecting
barriers to competing bids, including the $59 million termination fee. The
complaints request preliminary and permanent injunctive relief against
consummation of the merger, rescission of the merger in the event it is
consummated, monetary damages and an award of attorneys' fees. IBP believes that
the actions are without merit and intends to contest the actions vigorously.

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<PAGE>
CERTAIN FINANCIAL PROJECTIONS

IBP does not as a matter of course make public forecasts as to future
revenues, earnings or other financial information. IBP management did, however,
prepare certain projections at the request of J.P. Morgan which were provided to
J.P. Morgan in connection with its analysis of the DLJMB proposal and its
evaluation of IBP's financial position at that time. In addition, prior to
preparing those projections, IBP management provided a significant amount of
information and guidance to each of DLJMB and DLJSC to assist them in their
consideration of a possible transaction. The projections set forth below are
included in this proxy statement solely because of the disclosures that were
made to J.P. Morgan, DLJMB and DLJSC. See "Special Factors--Background of the
Merger" and "Special Factors--Opinion of the Financial Advisor for the Special
Committee."

IBP management does not normally project earnings and is especially wary of
doing so over extended earnings periods due to unpredictability of earnings in
what is a very cyclical business. These projections were prepared solely for the
purpose of this transaction.

IBP management has not historically broken out and reported earnings on the
"divisional" or "segment" lines which are reported in these projections. These
categories are IBP management's subjective categorizations of IBP's business
segments, and cannot be tied to IBP's financial statements.

THE PROJECTIONS SET FORTH BELOW WERE NOT PREPARED WITH A VIEW TO PUBLIC
DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE SEC OR THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROSPECTIVE FINANCIAL
INFORMATION. IN ADDITION, THE PROJECTIONS WERE NOT PREPARED WITH THE ASSISTANCE
OF OR REVIEWED, COMPILED OR EXAMINED BY, INDEPENDENT ACCOUNTANTS. THE
PROJECTIONS REFLECT NUMEROUS ASSUMPTIONS, ALL MADE BY IBP MANAGEMENT, WITH
RESPECT TO INDUSTRY PERFORMANCE, GENERAL BUSINESS, ECONOMIC, MARKET AND
FINANCIAL CONDITIONS AND OTHER MATTERS, ALL OF WHICH ARE DIFFICULT TO PREDICT
AND MANY OF WHICH ARE BEYOND IBP'S CONTROL. THERE CAN BE NO ASSURANCE THAT THE
ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS SET FORTH BELOW WILL PROVE
ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR LESS THAN THOSE
CONTAINED IN THE PROJECTIONS SET FORTH BELOW. SEE "CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING INFORMATION" ON PAGE 10 OF THIS PROXY STATEMENT.

THE INCLUSION OF THE PROJECTIONS IN THIS PROXY STATEMENT SHOULD NOT BE
REGARDED AS AN INDICATION THAT IBP, RAWHIDE HOLDINGS OR RAWHIDE ACQUISITION OR
ANY OF IBP'S, RAWHIDE HOLDINGS' OR RAWHIDE ACQUISITION'S RESPECTIVE
REPRESENTATIVES, OR RESPECTIVE OFFICERS AND DIRECTORS, CONSIDER SUCH INFORMATION
TO BE AN ACCURATE PREDICTION OF FUTURE EVENTS OR NECESSARILY ACHIEVABLE. IN
LIGHT OF THE UNCERTAINTIES INHERENT IN FORWARD LOOKING INFORMATION OF ANY KIND,
IBP CAUTIONS AGAINST RELIANCE ON SUCH INFORMATION. IBP DOES NOT INTEND TO UPDATE
OR REVISE SUCH PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN
PREPARED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, UNLESS REQUIRED BY LAW.

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FINANCIAL PROJECTIONS FURNISHED TO J.P. MORGAN

The following table summarizes the projections that were provided by IBP
management to J.P. Morgan:

<TABLE>
<CAPTION>
FISCAL YEARS ENDING DECEMBER 25,
---------------------------------------------------------------
ITEM 2000 2001 2002 2003 2004 2005
---- -------- -------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C> <C>
Total Revenues............................... $16,600 $17,300 $18,000 $18,600 $18,800 $19,500
EBIT by division
Beef....................................... 273 157 138 152 154 170
Pork....................................... 73 87 90 92 94 95
Hide....................................... 36 38 37 37 37 39
Case Ready................................. (9) (12) 58 71 96 121
Lakeside................................... 22 17 17 17 17 17
Logistics.................................. 22 22 22 22 22 22
Foodbrands................................. 125 137 181 228 273 297
Consolidated EBIT............................ 542 446 543 619 693 760
EBITDA....................................... 709 642 762 861 954 1,035
Capital Expenditures......................... 500 500 400 400 300 250
Net Income................................... 267 208 267 318 372 424
Earnings Per Share........................... 2.48 1.93 2.49 2.96 3.46 3.95
</TABLE>

In preparing the financial projections, management was particularly
attentive to IBP and its competitors' current position within the live cattle
and hog cycles in particular, rather than the larger economic cycle. IBP
management strongly believes that the highs and lows of the individual live
cattle and hog cycles, which may or may not coincide with the larger
macroeconomic cycles, are among the key drivers of financial performance. IBP's
management based its projections on the belief that there will be no new major
competitive entries into market in the foreseeable future. Additionally,
management's projections reflect the belief that the "case ready" product line
will be generating positive earnings before interest and taxes (EBIT) by 2002,
reflecting the timing and execution risks associated with the business.

The projections were driven in part by assumptions about the timing of
livestock cycles. Earnings before interest and taxes (EBIT), earnings before
interest, taxes, depreciation and amortization (EBITDA) and net income were
projected to decrease in 2001 due primarily to a decline in fed cattle numbers
beginning in 2001. Because it has historically taken approximately four years
for fed cattle numbers to increase significantly after the beginning of a low
supply of fed cattle, and the lowest supply of live cattle is expected in 2002,
the price of live cattle was projected to stay relatively flat. The projected
EBIT per head for the "Beef" division was projected to be $27.50, $16.50,
$15.00, $16.50, $16.50 and $17.50 for the years 2000, 2001, 2002, 2003, 2004 and
2005, respectively.

Because the live hog cycle has historically been much shorter than the live
cattle cycle, one price was assumed as the average price for live hogs for the
years 2001 through 2005 instead of predicting the movement of the pork price
cycle during such period. The projected EBIT per head for the "Pork" division
was projected to be $4.00, $4.80, $4.80, $4.80, $4.80 and $4.80 for the years
2000, 2001, 2002, 2003, 2004 and 2005, respectively.

IBP's projected live cattle slaughter ranges between 9.2 million and
9.9 million, while the projected live hog slaughter ranges between 18.2 million
and 19.9 million. The live cattle slaughter for the "Lakeside" division was
projected to be 1.0 million in each year from 2000 through 2005.

Management prepared an initial draft of its projections which it presented
to J.P. Morgan at the beginning of J.P. Morgan's valuation work. This initial
draft projected EBIT to be $532 million, $482 million, $548 million,
$591 million, $620 million and $662 million for the years 2000, 2001, 2002,
2003, 2004 and 2005, respectively, and projected earnings per share of $2.43 and
$2.18 for the years

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2000 and 2001, respectively. After meeting with J.P. Morgan, management revised
its assumptions to reflect an acceleration of capital spending and higher EBIT
for cattle. The numbers set forth in the preceding paragraphs were based on
these revised assumptions.

FINANCIAL PROJECTIONS PREPARED BY DLJMB AND DLJSC

After signing a confidentiality agreement with IBP on July 5, 2000, DLJMB
commenced its due diligence review of IBP and, with the assistance of IBP
management, prepared a set of earnings projections. IBP management agreed with
these projections, and a copy was provided to the special committee of the board
of directors of IBP. The following table summarizes the projections prepared by
DLJMB:

<TABLE>
<CAPTION>
FISCAL YEARS ENDING DECEMBER 25,
---------------------------------------------------------------
2000 2001 2002 2003 2004 2005
-------- -------- -------- -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Total revenues............................... $16,249 $16,786 $17,659 $18,367 $19,069 $19,782
EBIT breakdown by division
Beef....................................... 329 223 158 234 255 275
Pork....................................... 73 82 100 118 66 83
Case Ready................................. (9) (12) 50 66 79 90
Logistics and other........................ 22 27 26 25 24 23
Foodbrands................................. 125 153 161 171 183 195
------- ------- ------- ------- ------- -------
Consolidated EBIT............................ 539 473 495 614 606 668

EBITDA....................................... 722 691 738 879 893 977
Capital expenditures......................... 453 350 255 260 265 270
EBITDA -- Capital Expenditures............... 269 341 483 619 628 707
</TABLE>

Representatives of DLJMB had previously reviewed an additional set of
earnings projections relating to IBP that had been prepared by DLJSC, and which
had been shared with IBP management. These projections were provided by DLJSC
for the June 29, 2000 meeting between DLJMB, DLJSC and IBP and projected EBITDA
to be approximately $786 million, $867 million, $967 million, $1,044 million and
$1,181 million for the years 2001, 2002, 2003, 2004 and 2005, respectively, and
projected EBIT to be approximately $565 million, $617 million, $687 million,
$734 million and $840 million for the years 2001, 2002, 2003, 2004 and 2005,
respectively. IBP management had informed DLJMB and DLJSC that the projections
by DLJSC could be $20 million too high in each year based on management's
expectations about the pork division's profits, and IBP management estimated
that capital expenditures for 2000 and 2001 combined would be between
$900 million and $1,000 million. IBP management also discussed these projections
with J.P. Morgan on June 29, 2000.

These latter projections were not given any weight by DLJMB in its
consideration of a possible transaction or in negotiating the transaction with
the special committee. DLJMB believed such projections were not indicative of
likely performance by IBP but could only be viewed as targets if IBP performed
in excess of reasonable expectations. As a result, DLJMB used DLJSC's
projections only as a basis for setting certain targets for the performance
component of the new management option plans to be adopted by Rawhide Holdings
after the merger.

The various projections set forth above should be read together with the
"Selected Historical Consolidated Financial Data" included in this proxy
statement and IBP's historical financial statements and other financial
information and the "Management's Discussion and Analysis of Financial Condition
and Results of Operations" as set forth in IBP's Annual Report on Form 10-K for
the fiscal year ended December 25, 1999, IBP's Quarterly Reports on Form 10-Q
for the quarters ended March 25, 2000, June 24, 2000, and September 23, 2000,
and IBP's Current Reports on Form 8-K dated October 2, 2000 and November 3,
2000, each of which is incorporated by reference into this proxy statement.

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<PAGE>
THE MERGER AGREEMENT

On October 1, 2000, IBP entered into the merger agreement with Rawhide
Holdings and Rawhide Acquisition. The following is a summary of the material
provisions of the merger agreement. Because it is a summary, it does not include
all of the information that is included in the merger agreement. The text of the
merger agreement, which is attached as Appendix A to this proxy statement, is
incorporated into this section by reference. We encourage you to read the merger
agreement carefully in its entirety.

THE MERGER

Upon effectiveness of the merger, Rawhide Acquisition will be merged with
IBP, and IBP will continue as the surviving company and a wholly-owned
subsidiary of Rawhide Holdings. In connection with the merger, you will be
entitled to receive $22.25 in cash for each of your shares of IBP common stock
outstanding at the time of the merger.

As the surviving company after the merger, IBP will have all the property,
rights and powers of both Rawhide Acquisition and IBP before the merger, and it
will be liable for all of the debts, liabilities and obligations of both Rawhide
Acquisition and IBP before the merger. After the merger, the separate corporate
existence of Rawhide Acquisition will cease.

TIME OF CLOSING

The merger will close as soon as possible after satisfaction or waiver of
the conditions to the merger. To complete the merger, Rawhide Acquisition and
IBP will file a certificate of merger with the Secretary of State of the State
of Delaware.

EXCHANGE AND PAYMENT PROCEDURES

IBP will appoint an exchange agent to handle the exchange of its share
certificates in the merger for cash. Soon after the merger becomes effective,
the exchange agent will mail to you a letter of transmittal and instructions
explaining how to exchange your share certificates for cash. Upon surrender to
the exchange agent of a valid share certificate and a properly completed letter
of transmittal, along with such other documents as the exchange agent may
reasonably require, you will be entitled to receive $22.25 in cash per share.
Until surrendered in this manner, each share certificate will represent only the
right to receive the merger consideration.

You should not send your stock certificates now. You should send them only
after you receive a letter of transmittal from the exchange agent. A letter of
transmittal will be mailed to you soon after the merger becomes effective.

Any merger consideration made available to the exchange agent that remains
unclaimed by IBP shareholders for six months after the time the merger becomes
effective will be returned to IBP, as the surviving company after the merger,
and any IBP shareholders who have not by that time made an exchange must then
look to the surviving company for payment of their claim for merger
consideration. Amounts unclaimed after two years will be kept by IBP, subject to
state unclaimed property laws.

TRANSFERS OF SHARES

No transfers of shares of IBP common stock will be made on IBP share
transfer books after the merger becomes effective.

TREATMENT OF STOCK OPTIONS

At the time the merger becomes effective, the merger agreement provides that
all outstanding options to purchase shares of IBP common stock, including
options exercisable for more than $22.25

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<PAGE>
per share, will be cancelled. In exchange, optionholders will receive, whether
or not their options have vested, an amount determined by multiplying (1) the
excess, if any, of $22.25 over the exercise price per share of the option by
(2) the number of shares subject to the option.

REPRESENTATIONS AND WARRANTIES

In the merger agreement, IBP has represented and warranted certain matters
to Rawhide Holdings. These include representations and warranties relating to:

- its organization, standing and similar corporate matters;

- its authorization to enter into the merger agreement;

- regulatory consents;

- non-contravention of its agreements;

- its capital structure;

- its subsidiaries;

- the accuracy of its SEC filings;

- its financial statements;

- the accuracy of information contained in this proxy statement;

- the absence of certain changes or events since the date of its most recent
annual financial statements filed with the SEC;

- the absence of material undisclosed liabilities;

- the absence of pending or threatened material litigation;

- filing of tax returns and payment of taxes;

- existence of benefit plans and employment matters;

- compliance with applicable laws;

- possession of required material permits;

- ownership of or rights to use its intellectual property;

- environmental liabilities and compliance with environmental laws;

- finders' fees and expenses;

- the inapplicability of certain restrictions of Delaware law; and

- the absence of a shareholder rights plan.

The merger agreement also contains representations and warranties of Rawhide
Holdings relating to, among other things:

- its organization, standing and similar corporate matters;

- its authorization to enter into the merger agreement;

- non-contravention of its agreements;

- the accuracy of information supplied by Rawhide Holdings in connection
with this proxy statement;

- finders' fees and expenses;

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<PAGE>
- financing commitments in connection with the merger;

- ownership of shares of IBP common stock;

- the proposed equity commitment of the proposed shareholders of Rawhide
Holdings; and

- agreements between Rawhide Holdings, Rawhide Acquisition or DLJMB, on the
one hand, and any director, officer, employee or stockholder of IBP, on
the other hand.

The representations and warranties in the merger agreement do not survive
the closing of the merger or termination of the merger agreement.

COVENANTS OF IBP

IBP has undertaken certain covenants in the merger agreement. The following
summarizes the more significant of these covenants:

INTERIM CONDUCT OF IBP'S BUSINESS

From October 1, 2000 until the merger becomes effective, IBP has agreed to
conduct its businesses in the ordinary course and consistent with past practice.
IBP has also agreed to use its reasonable best efforts to preserve its business
and relationships with third parties and employees.

IBP has also agreed to certain specific restrictions during this period,
which are subject to the exceptions described in the merger agreement. These
include restrictions on:

- amending its organizational documents;

- making significant acquisitions, disposals and investments;

- incurring significant debt;

- making significant loans;

- making significant capital expenditures;

- splitting, combining or reclassifying its stock or declaring dividends;

- adopting new employee compensation arrangements or materially increasing
employee compensation or benefits;

- approving any new labor agreements;

- paying unusual claims; and

- changing its tax elections or settling any material income tax liability.

IBP has also agreed not to commit to do any of these things.

NO SOLICITATION

IBP and its subsidiaries and its officers, directors, employees and advisors
have agreed not to take action to solicit, initiate, encourage or facilitate the
making of any acquisition proposal. An acquisition proposal means any offer or
proposal for, or any indication of interest in, any acquisition or purchase of
securities representing more than 50% of IBP's voting power, or a substantial
portion of its assets, or any merger, reorganization, consolidation, share
exchange, business combination or similar transaction involving IBP or its
subsidiaries.

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Restricted actions include:

- soliciting or encouraging the submission of any acquisition proposal or
agreeing to endorse any acquisition proposal;

- engaging in discussions or negotiations with any potential bidder, or
disclosing non-public information relating to IBP or its subsidiaries; or

- granting any waiver or release under any standstill or similar agreement
with respect to any of IBP's equity securities.

However, if IBP receives an unsolicited acquisition proposal which IBP's
board of directors determines in good faith is reasonably likely to be superior
to the merger, and IBP delivers prior written notice to Rawhide Holdings, IBP
may:

- furnish non-public information pursuant to a confidentiality agreement to
the offeror;

- engage in discussions or negotiations with the offeror; and

- withdraw or modify the recommendation of IBP's board of directors
contained in this proxy statement.

COVENANTS RELATING TO THE SPECIAL MEETING AND PROXY MATERIALS

IBP has agreed to call a special meeting to vote on the merger agreement and
the merger. IBP has also agreed that its directors will recommend approval and
adoption of the merger agreement and the merger by IBP's shareholders and that
they will not withdraw their recommendation. This obligation is subject to IBP's
rights discussed above.

The merger agreement provides that IBP must prepare and mail this proxy
statement quickly, use its reasonable best efforts to obtain shareholder
approval for the merger and related matters and comply with all legal
requirements at the special meeting.

CERTAIN OTHER COVENANTS

IBP has agreed that before the merger becomes effective it will provide
evidence to Rawhide Holdings that, except as requested by Rawhide Holdings,
IBP's current directors will resign when the merger becomes effective.

COVENANTS OF RAWHIDE HOLDINGS

Rawhide Holdings has also undertaken certain covenants in the merger
agreement. The following summarizes the more significant of these covenants.

SEC FILINGS

Rawhide Holdings has agreed to file a transaction statement with the SEC
relating to the merger, as required by the SEC's Rule 13e-3 under the Securities
Exchange Act of 1934. The information included in this proxy statement is
intended to comply with Rule 13e-3.

CERTAIN EMPLOYEE MATTERS

Rawhide Holdings has also agreed that for at least one year from the time of
the merger, it will cause IBP, as the surviving company of the merger, and IBP's
subsidiaries to provide benefits to its employees (other than those represented
for purposes of collective bargaining) comparable to those currently provided by
IBP and its subsidiaries. This does not apply to any stock option or other
equity based incentive plan currently provided by IBP.

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<PAGE>
INDEMNIFICATION AND INSURANCE OF IBP'S DIRECTORS AND OFFICERS

Rawhide Holdings has also agreed to cause IBP, as the surviving company
after the merger, to indemnify its present and former officers and directors
against matters occurring before the merger became effective. This obligation
lasts for a period of six years after the close of the merger. Rawhide Holdings
has also agreed that for six years after the closing date of the merger, it will
cause IBP, as the surviving company, to use its best efforts to provide
officers' and directors' liability insurance for each person currently covered
by IBP's officers' and directors' liability insurance policy on terms no less
favorable than IBP's current policy. However, if the cost of such insurance on a
per annum basis exceeds 200% of the amount per annum IBP paid in its last fiscal
year, then Rawhide Holdings will cause IBP, as the surviving company, to provide
only such coverage as is available at the cost of 200% of such amount.

FINANCING

Rawhide Holdings has also agreed to use its reasonable best efforts to
obtain the financing required to complete the merger.

ACQUISITIONS OF IBP COMMON STOCK

Rawhide Holdings also agreed that neither it nor Rawhide Acquisition will
acquire any shares of IBP common stock prior to the closing of the merger, other
than any acquisitions from ADM, Booth Creek or Jeffrey J. Joyce.

ADDITIONAL AGREEMENTS

Both parties to the merger agreement have agreed to use their reasonable
best efforts to do or cause to be done anything necessary or advisable to
consummate the merger and related transactions. The parties have also agreed to
cooperate with each other in relation to certain matters, including making the
necessary SEC filings, obtaining regulatory and other consents and making public
announcements.

CONDITIONS

MUTUAL CLOSING CONDITIONS

Both parties' obligations to consummate the merger are subject to the
satisfaction or, if legally permissible, waiver at or before the time the merger
becomes effective of the following conditions:

- the approval by IBP shareholders of the merger proposal;

- the expiration of the HSR Act waiting period;

- the absence of any legal prohibition preventing completion of the merger;
and

- the receipt of approvals of any governmental body in relation to the
merger.

ADDITIONAL CLOSING CONDITIONS FOR RAWHIDE HOLDINGS' AND RAWHIDE
ACQUISITION'S BENEFIT

Rawhide Holdings' and Rawhide Acquisition's obligations to complete the
merger are subject to the following additional conditions:

- the material performance by IBP of its obligations under the merger
agreement;

- IBP's representations and warranties being accurate as of the closing date
of the merger to the extent specified in the merger agreement;

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<PAGE>
- there being no proceeding by any governmental body, among other things,
challenging, delaying or prohibiting the merger or requiring IBP, as the
surviving company after the merger, to dispose of a material portion of
its assets;

- the receipt by Rawhide Holdings of documents relating to IBP's standing
and authority to enter into the merger agreement;

- the availability to Rawhide Holdings and Rawhide Acquisition of sufficient
funds to complete the merger;

- the holders of no more than 5% of outstanding IBP common stock exercising
their dissenters' rights;

- IBP's total net indebtedness not being more than $1.5 billion at closing;
and

- IBP shall not have revalued any of its assets if the effect of such
revaluation would reasonably be expected to be a material adverse effect
on IBP.

ADDITIONAL CLOSING CONDITIONS FOR IBP'S BENEFIT

IBP's obligation to complete the merger is subject to the following
additional conditions:

- Rawhide Holdings' and Rawhide Acquisition's material performance of their
obligations under the merger agreement;

- Rawhide Holdings' representations and warranties being accurate as of the
closing date of the merger to the extent specified in the merger
agreement;

- the board of directors receiving advice that when the merger becomes
effective, IBP, as the surviving company, will not become insolvent, will
not be left with unreasonably small capital, will not have incurred debts
beyond its ability to pay such debts as they mature and its capital will
not become impaired; and

- the merger agreement must be approved by the holders of a majority of the
shares of IBP common stock voting at the special meeting, other than
shares owned beneficially by ADM, Booth Creek, Jeffrey J. Joyce, Robert L.
Peterson or Richard L. Bond, or any of their affiliates.

This last condition may be waived by IBP, provided that it gives written
notice of such waiver to the stockholders at least 10 business days prior to the
special meeting.

TERMINATION OF THE MERGER AGREEMENT

RIGHT TO TERMINATE

The merger agreement may be terminated at any time before the closing in any
of the following ways:

(a) by mutual written consent of IBP and Rawhide Holdings;

(b) by either IBP or Rawhide Holdings if the merger is not completed by
March 31, 2001. However, the party seeking to terminate for this reason must
not be in breach of its obligations under the merger agreement in any
material respect;

(d) by Rawhide Holdings if the board of directors withdraws, modifies or
amends in a manner adverse to Rawhide Holdings their approval or
recommendation of the merger or certain related matters, or if it recommends
or endorses an alternative transaction, or if IBP fails to mail the

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proxy statement in a timely fashion or fails to include the recommendation
of its board of directors in such proxy statement;

(e) by IBP if the board of directors authorizes it to enter into another
transaction that is superior to the merger in the manner set out in the
merger agreement and IBP pays Rawhide Holdings the $59 million termination
fee described below. However, IBP can only terminate the merger agreement in
these circumstances if it has notified Rawhide Holdings of the material
terms of the alternative transaction at least three business days prior to
entering into such transaction and permitted Rawhide Holdings to make a new
offer during such period which shall be considered by the special committee
of the board of directors in good faith; and

(f) by either IBP or Rawhide Holdings if IBP's shareholders do not
approve the merger agreement and the merger.

If the merger agreement terminates, it will become void. However,
termination will not affect the rights of either party against the other for
breach of the merger agreement. Also, certain obligations survive termination of
the agreement, including the obligation to pay the fees described under
"Termination Fees" below and certain confidentiality obligations.

TERMINATION FEES

IBP has agreed to pay Rawhide Holdings $59 million in cash if the merger
agreement is terminated by IBP or Rawhide Holdings for the reasons described in
(d) or (e) above.

IBP must also pay Rawhide Holdings $59 million in cash if all of the
following events occur:

- the merger agreement is terminated by either IBP or Rawhide Holdings
because IBP's shareholders do not approve the merger at the special
meeting or the merger is not completed by March 31, 2001;

- at the time of such termination or the special meeting, as the case may
be, there is an alternative transaction proposal outstanding from a third
party which is superior to the merger; and

- within 6 months of the termination of the merger agreement, IBP enters
into the alternative transaction or another transaction that is superior
to such alternative transaction.

EXPENSES

Upon termination of the merger agreement for the reasons described in (d),
(e) or (f) above, IBP shall reimburse Rawhide Holdings and its affiliates for
all of their out-of-pocket fees and expenses incurred by them, up to a maximum
reimbursement amount of $7.5 million.

Except as described above, all costs and expenses incurred in connection
with the merger agreement will be paid by the party incurring those costs or
expenses.

AMENDMENTS; WAIVERS

Any provision of the merger agreement may be amended or waived before the
merger becomes effective. After approval of the merger agreement by IBP
shareholders, no amendment or waiver (including of any condition of the merger)
can be made that alters the consideration to be received for IBP common stock or
that would adversely affect the rights of IBP shareholders, without their
further approval. In addition, IBP cannot waive the condition to the merger that
the merger agreement and the merger be approved by IBP stockholders as described
under "Conditions--Additional Closing Conditions for IBP's Benefit" above,
unless it gives at least 10 business days' notice to IBP stockholders of its
intention to waive such condition.

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THE VOTING AGREEMENT

On October 1, 2000, Rawhide Holdings and Rawhide Acquisition entered into a
voting agreement with ADM, Booth Creek and Jeffrey J. Joyce. The following is a
summary of the material provisions of the voting agreement. Because it is a
summary, it does not include all of the information that is included in the
voting agreement. The text of the voting agreement, which is attached as
Appendix B to this proxy statement, is incorporated into this section by
reference. You should read the voting agreement carefully in its entirety.

SCOPE OF AGREEMENT

The voting agreement relates to 3,644,923 shares of IBP common stock owned
by Booth Creek, 643,030 shares owned by Mr. Joyce and 12,951,400 owned by ADM.

TRANSFER OF SHARES

During the period covered by the voting agreement, ADM, Booth Creek and
Mr. Joyce have each agreed that, in the event of any transfer of their IBP
shares, they will require the transferee of such shares to execute and deliver
to Rawhide Holdings and Rawhide Acquisition an agreement identical in form to
the voting agreement. Subject to the preceding sentence, ADM, Booth Creek and
Mr. Joyce are free to transfer their IBP shares as they deem appropriate.

VOTING; PROXY

ADM, Booth Creek and Mr. Joyce have agreed to vote their IBP shares to
approve the merger proposal. This obligation relates to any shareholder meetings
or adjournments or actions by written consent when the merger proposal is voted
on. They have also agreed that for the period covered by the voting agreement
they will not vote their IBP shares in favor of any other merger, consolidation,
sale of assets, reorganization, recapitalization, liquidation or winding up, or
any other extraordinary transaction. They have also agreed not to vote their IBP
shares in favor of any action that would either frustrate the purpose of or
prevent or delay completion of the transactions contemplated by the merger
agreement. They have irrevocably agreed to appoint Rawhide Holdings as their
proxy to vote their IBP shares in this manner.

NO SOLICITATION; NO EXERCISE OF DISSENTERS' RIGHTS

ADM, Booth Creek and Mr. Joyce have agreed that they will not during the
period covered by the agreement:

- take any action to solicit, initiate or encourage an alternative
acquisition transaction;

- engage in negotiations or discussions with or disclose any non-public
information relating to IBP or any of its subsidiaries to any potential
bidder;

- provide access to the properties, books or records of IBP or any of its
subsidiaries; or

- otherwise assist, facilitate or encourage any potential bidder.

In addition, they have agreed not to exercise any rights to dissent or
appraisal with respect to their IBP shares and the merger.

TERMINATION

The voting agreement will terminate at the time the merger becomes
effective, the date of any substantive amendment to the merger agreement which
has not been approved in writing by ADM, Booth Creek and Mr. Joyce or when the
merger agreement is terminated, whichever happens earlier.

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APPRAISAL OR DISSENTER'S RIGHTS

Under Section 262 of the Delaware General Corporation Law, if you do not
vote your outstanding shares of IBP common stock in favor of adoption of the
merger proposal, you will be entitled to dissent and elect to have the "fair
value" of your shares, exclusive of any element of value arising from the
accomplishment or expectation of the merger, together with a fair rate of
interest, if any, judicially determined by the Delaware Court of Chancery and
paid to you in cash.

The following discussion is not a complete statement of the law pertaining
to appraisal rights under the Delaware General Corporation Law and is qualified
in its entirety by the full text of Section 262, a copy of which is provided as
Appendix D to this proxy statement. All references in Section 262 and in this
summary to a "stockholder" are to the record holder of the shares of IBP common
stock as to which appraisal rights are asserted. If you have a beneficial
interest in shares of common stock held of record in the name of another person,
such as a broker or nominee, you must act promptly to cause the record holder to
follow the steps summarized below properly and in a timely manner to perfect
your appraisal rights.

Under Section 262, where a merger agreement is to be submitted for adoption
at a meeting of stockholders, as in the case of the special meeting of IBP
stockholders described in this proxy statement, the corporation, not less than
20 days prior to the meeting, must notify each person who was a stockholder on
the record date and who is entitled to appraisal rights that appraisal rights
are available and include in the notice a copy of Section 262. This proxy
statement is that notice to you, and a copy of Section 262 is attached to this
proxy statement as Appendix D. If you wish to exercise your appraisal rights or
wish to preserve the right to do so, you should review carefully Section 262 and
seek advice of legal counsel, since failure to comply fully with the procedures
of Section 262 will result in the loss of appraisal rights.

Pursuant to the merger agreement, in the event that holders of more than 5%
of outstanding IBP common stock exercise their appraisal rights under
Section 262, Rawhide Holdings and Rawhide Acquisition will be relieved of their
obligation to complete the merger.

If you wish to exercise the right to dissent from the merger and demand
appraisal under Section 262, you must satisfy each of the following conditions:

- You must deliver to us written demand for appraisal of your shares of IBP
common stock before the vote on adoption of the merger proposal at the
special meeting, which demand will be sufficient if it reasonably informs
us of your identity and that you intend to demand the appraisal of your
shares;

- You must not vote your shares in favor of adoption of the merger proposal.
Because a proxy that does not contain voting instructions will, unless
revoked, be voted in favor of the merger proposal, if you vote by proxy
and wish to exercise appraisal rights, you must vote against adoption of
the merger proposal or abstain from voting on adoption of the merger
proposal; and

- You must continuously hold your shares from the date of making your
written demand through the completion of the merger. If you are the record
holder of shares of common stock on the date the written demand for
appraisal is made but thereafter transfer these shares prior to the
completion of the merger, you will lose any right to appraisal in respect
of the shares.

Your failure to vote against the adoption of the merger proposal will not
constitute a waiver of your appraisal rights.

Neither voting in person or by proxy against, abstaining from voting on or
failing to vote on the proposal to adopt the merger proposal will constitute a
written demand for appraisal within the meaning of Section 262. The written
demand for appraisal must be in addition to and separate from any such proxy or
vote.

Only a holder of record of shares of IBP common stock issued and outstanding
immediately prior to the completion of the merger is entitled to assert
appraisal rights for the shares of common stock

64
<PAGE>
registered in that holder's name. A demand for appraisal should be executed by
or on behalf of the stockholder of record, fully and correctly, as that
stockholder's name appears on the stock certificates, should specify the
stockholder's name and mailing address, the number of shares of common stock
owned and that the stockholder intends thereby to demand appraisal of the
stockholder's shares of IBP common stock.

If your shares of IBP common stock are owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, execution of a written
demand should be made in that capacity. If your shares of IBP common stock are
owned of record by more than one person as in a joint tenancy or tenancy in
common, the demand should be executed by or on behalf of all owners. An
authorized agent, including one or more joint owners, may execute a demand for
appraisal on behalf of a stockholder; however, the agent must identify the
record owner or owners and expressly disclose the fact that, in executing the
demand, the agent is acting as agent for the owner or owners.

A record holder such as a broker who holds shares of IBP common stock as
nominee for several beneficial owners may exercise appraisal rights with respect
to the shares of IBP common stock held for one or more beneficial owners while
not exercising those rights with respect to the shares of IBP common stock held
for one or more other beneficial owners; in that case, the written demand should
set forth the number of shares of IBP common stock as to which appraisal is
sought, and where no number of shares is expressly mentioned, the demand will be
presumed to cover all shares of IBP common stock held in the name of the record
owner. If you hold your shares of IBP common stock in brokerage accounts or
other nominee forms and wish to exercise appraisal rights, you are urged to
consult with your broker to determine the appropriate procedures for the making
of a demand for appraisal by the nominee.

A stockholder who elects to exercise appraisal rights under Section 262
should mail or deliver, before the vote on adoption of the merger proposal at
the special meeting, a written demand to IBP, inc., 800 Stevens Port Drive,
Dakota Dunes, South Dakota 57049; Attention: Secretary.

Within ten days after the completion of the merger, the surviving
corporation must send a notice as to the effectiveness of the merger to each
former IBP stockholder who has made a written demand for appraisal in accordance
with Section 262 and who has not voted in favor of adoption of the merger
proposal. Within 120 days after the completion of the merger, but not
thereafter, either IBP or any holder of dissenting shares of IBP common stock
who has complied with the requirements of Section 262 may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of all
shares of IBP common stock held by dissenting stockholders. IBP is under no
obligation, and has no present intent, to file a petition for appraisal, and you
should not assume that IBP will file a petition or that IBP will initiate any
negotiations with respect to the fair value of the shares. Accordingly, if you
desire to have your shares appraised, you should initiate any petitions
necessary for the perfection of your appraisal rights within the time periods
and in the manner prescribed in Section 262.

Within 120 days after the completion of the merger, any stockholder who has
complied with the provisions of Section 262 to that point in time will be
entitled to receive from IBP, upon written request, a statement setting forth
the aggregate number of shares of IBP common stock not voted in favor of
adoption of the merger proposal and with respect to which demands for appraisal
have been received and the aggregate number of holders of the shares. IBP must
mail this statement to the stockholder within 10 days of receipt of a request or
within 10 days after expiration of the period for delivery of demands for
appraisal under Section 262, whichever is later.

A stockholder timely filing a petition for appraisal with the Delaware Court
of Chancery must deliver a copy to IBP, which will then be obligated within
20 days to provide the Delaware Court of Chancery with a duly verified list
containing the names and addresses of all stockholders who have demanded
appraisal of their shares of IBP common stock. After notice to the stockholders,
the Delaware Court of Chancery is empowered to conduct a hearing on the petition
to determine which stockholders are entitled to appraisal rights. The Delaware
Court of Chancery may require stockholders

65
<PAGE>
who have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings, and if any
stockholder fails to comply with the requirement, the Delaware Court of Chancery
may dismiss the proceedings as to that stockholder.

After determining the stockholders entitled to an appraisal, the Delaware
Court of Chancery will appraise the "fair value" of their shares, exclusive of
any element of value arising from the accomplishment or expectation of the
merger, together with a fair rate of interest, if any, to be paid upon the
amount determined to be the fair value. The costs of the action may be
determined by the Delaware Court of Chancery and taxed upon the parties as the
Delaware Court of Chancery deems equitable. Upon application of a holder of
dissenting shares of IBP common stock, the Delaware Court of Chancery may also
order that all or a portion of the expenses incurred by any stockholder in
connection with the appraisal proceeding, including without limitation,
reasonable attorneys' fees and the fees and expenses of experts, be charged pro
rata against the value of all of the shares of IBP common stock entitled to
appraisal.

If you consider seeking appraisal, you should be aware that the fair value
of your shares as determined under Section 262 could be more than, the same as
or less than the merger consideration you would receive under the IBP merger
proposal if you did not seek appraisal of your shares. You should also be aware
that investment banking opinions are not opinions as to fair value under
Section 262.

In determining fair value and, if applicable, a fair rate of interest, the
Delaware Court of Chancery is to take into account all relevant factors. In
WEINBERGER V. UOP, INC., the Delaware Supreme Court discussed the factors that
could be considered in determining fair value in an appraisal proceeding,
stating that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered, and that "fair price obviously requires
consideration of all relevant factors involving the value of a company." The
Delaware Supreme Court stated that, in making this determination of fair value,
the court must consider market value, asset value, dividends, earnings
prospects, the nature of the enterprise and any other facts that could be
ascertained as of the date of the merger that throw any light on future
prospects of the merged corporation. In WEINBERGER, the Delaware Supreme Court
further stated that "elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the date of the merger
and not the product of speculation, may be considered." Section 262 provides
that fair value is to be "exclusive of any element of value arising from the
accomplishment or expectation of the merger."

Any stockholder who has duly demanded appraisal in compliance with
Section 262 will not, after the completion of the merger, be entitled to vote
the shares subject to this demand for any purpose or to receive payment of
dividends or other distributions on those shares (except dividends or other
distributions payable to holders of record of shares as of a record date prior
to the completion of the merger).

If any stockholder who demands appraisal of shares of IBP common stock under
Section 262 fails to perfect, or effectively withdraws or loses, the right to
appraisal, the stockholder's shares of IBP common stock will be converted into
the right to receive the merger consideration in cash in accordance with the IBP
merger agreement, without interest. A stockholder will fail to perfect, or
effectively lose or withdraw, the right to appraisal if no petition for
appraisal is filed within 120 calendar days after the completion of the merger.
A stockholder may withdraw a demand for appraisal by delivering to IBP a written
withdrawal of the demand for appraisal and acceptance of the merger
consideration, except that any such attempt to withdraw made more than 60
calendar days after the completion of the merger will require the written
approval of IBP. Once a petition for appraisal has been filed, the appraisal
proceeding may not be dismissed as to any stockholder, absent approval of the
Delaware Court of Chancery.

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<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The table below presents selected consolidated 52-week historical financial
data that have been derived from IBP's audited consolidated financial statements
and selected consolidated 39-week historical financial data that have been
prepared by IBP and are unaudited. You should read the selected financial data
in conjunction with IBP's separate historical consolidated financial statements,
related notes and other financial information incorporated by reference into
this proxy statement.

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT NET SALES, PER SHARE DATA,
AND RATIO OF EARNINGS TO FIXED CHARGES)

<TABLE>
<CAPTION>
52 WEEKS ENDED 39 WEEKS ENDED
-------------------------------------------------------------- -----------------------
DEC. 25, DEC. 26, DEC. 27, DEC. 28, DEC. 30, SEPT. 23, SEPT. 25,
1999 1998 1997 1996 1995 2000 1999
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net sales (in millions)................ $ 14,635 $ 13,277 $ 13,446 $ 12,539 $ 12,668 $ 12,202 $ 10,626
Gross profit........................... 1,003,728 737,534 471,427 443,582 604,068 787,394 725,184
Selling, general and administrative
expenses............................. 445,606 344,596 233,541 120,674 123,972 415,158 317,996
Merger costs........................... -- -- -- -- -- 31,299 --
Earnings from operations............... 558,122 392,938 237,886 322,908 480,096 340,937 407,188
Interest expense, net.................. 67,816 57,571 44,173 3,373 20,784 64,071 48,710
Income taxes........................... 173,642 127,577 73,739 120,800 179,200 105,200 123,708
Extraordinary loss (1)................. -- (14,815) -- -- (22,189) (15,037) --
Net earnings........................... 316,664 192,975 119,974 198,735 257,923 156,629 234,770

PER SHARE DATA:
Earnings per diluted share -- Earnings
before extraordinary item............ $ 2.94 $ 2.95 $ 1.18 $ 2.07 $ 2.92 $ 1.58 $ 2.19
Extraordinary loss (1)............... -- (0.14) -- -- (0.23) (0.14) --
Net earnings......................... 2.94 1.81 1.18 2.07 2.69 1.44 2.19
Dividends per share.................... 0.10 0.10 0.10 0.10 0.10 0.08 0.08

FINANCIAL CONDITION:
Working capital........................ $ 157,632 $ 251,254 $ 218,400 $ 540,903 $ 427,241 $ (19,785) $ 176,683
Total assets........................... 4,151,292 3,313,019 2,971,512 2,174,495 2,027,601 4,395,247 4,062,852
Long-term obligations.................. 789,861 761,182 635,006 260,008 260,752 663,181 780,680
Stockholders' equity................... 1,717,102 1,408,619 1,243,847 1,203,655 1,022,939 1,888,386 1,638,672

OTHER DATA:
Book value per share................... $ 17.78 $ 14.56 $ 12.98 $ 12.71 $ 10.80 $ 17.84 $ 16.97
Ratio of earnings to fixed charges..... 6.30 5.20 4.00 14.50 11.60 4.10 6.30
Weighted average common shares
outstanding.......................... 96,586 96,774 95,811 94,688 94,745 105,877 96,573
</TABLE>

------------------------------

(1) Extraordinary loss on early extinguishment of debt.

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<PAGE>
COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

IBP common stock is listed on the New York Stock Exchange under the symbol
"IBP". The table below sets forth the high and low sales prices per share for
each quarterly period for the two most recent fiscal years and for the current
fiscal year to date as reported by the New York Stock Exchange, and the cash
dividends declared per share for each such period. These prices do not include
adjustments for commissions or brokerage fees.

<TABLE>
<CAPTION>
IBP COMMON STOCK
-----------------------------
MARKET PRICE CASH
----------------------------- DIVIDENDS
HIGH LOW DECLARED
------------- ------------- ---------
<S> <C> <C> <C>
1998
First Quarter........................................... $ 24 1/2 $ 19 15/16 $0.025
Second Quarter.......................................... 23 1/8 18 3/8 0.025
Third Quarter........................................... 21 1/8 19 9/16 0.025
Fourth Quarter.......................................... 29 7/16 20 0.025
1999
First Quarter........................................... 29 3/16 19 3/8 $0.025
Second Quarter.......................................... 23 1/8 16 3/4 0.025
Third Quarter........................................... 25 3/4 22 0.025
Fourth Quarter.......................................... 25 17 3/4 0.025
2000
First Quarter........................................... 18 1/2 11 $0.025
Second Quarter.......................................... 18 7/8 13 3/4 0.025
Third Quarter........................................... 17 13/16 14 0.025
Fourth Quarter (through November 27).................... 23 1/16 17 1/4 0.025
</TABLE>

On September 29, 2000, the last full trading day prior to the public
announcement of the merger agreement, the closing price for IBP common stock was
$18.31. On November 27, 2000, the most recent practicable date prior to the
printing of this document, the closing price per IBP common stock was $22.0625.
YOU SHOULD OBTAIN CURRENT MARKET PRICE QUOTATIONS FOR IBP COMMON STOCK IN
CONNECTION WITH THE VOTING OF YOUR COMMON STOCK.

The merger agreement permits IBP to pay to holders of common stock, prior to
the effective time of the merger, regular quarterly cash dividends. The merger
agreement prohibits IBP from declaring, setting aside or paying dividends or
distributions other than regular quarterly dividends until the effective date of
the merger.

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<PAGE>
COMMON STOCK PURCHASE INFORMATION

PURCHASES BY IBP

The table below sets forth the purchases by IBP of its common stock since
October 1, 1998 including: (1) the year and fiscal quarter in which the shares
were purchased, (2) the number of shares purchased, (3) the range of prices paid
for the shares and (4) the average purchase price per share for each fiscal
quarter:

<TABLE>
<CAPTION>
RANGE OF PRICES
------------------- AVERAGE PRICE
PURCHASE QUARTER NUMBER OF SHARES LOW HIGH PER QUARTER
---------------- ---------------- -------- -------- -------------------
<S> <C> <C> <C> <C>
Third Quarter 1998...................... 234,800 $16.96 $19.41 $17.25
Fourth Quarter 1998..................... 45,000 20.98 27.60 24.85

First Quarter 1999...................... 45,000 22.54 27.17 24.50
Second Quarter 1999..................... 45,000 18.41 21.95 20.74
Third Quarter 1999...................... 45,000 23.12 24.15 23.63
Fourth Quarter 1999..................... 45,000 22.05 22.90 23.33

First Quarter 2000...................... 171,900 12.94 15.75 14.49
Second Quarter 2000..................... 695,000 14.35 18.38 15.96
Third Quarter 2000...................... 45,000 14.56 16.16 15.57
Fourth Quarter through November 24,
2000.................................. 0 N/A N/A N/A
</TABLE>

PURCHASES BY DLJMB

DLJMB has not purchased any shares of IBP common stock during the past two
years.

PURCHASES BY ADM

ADM has not purchased any shares of IBP common stock during the past two
years.

PURCHASES BY BOOTH CREEK AND JEFFREY J. JOYCE

Booth Creek and Jeffrey J. Joyce acquired their shares of IBP common stock
as a result of IBP's acquisition of Corporate Brand Foods America, Inc. in
February, 2000. Neither Booth Creek nor Jeffrey J. Joyce has purchased any
shares of IBP common stock since such transaction.

PURCHASES BY EXECUTIVE OFFICERS AND DIRECTORS

The following tables set forth the transactions by each of the executive
officers and directors of IBP involving common stock of IBP, including: (1) the
name of the executive officer or director, (2) the date of the transaction,
(3) the type of transaction, (4) the number of shares or options involved in the
transaction and (5) the price per share. Transactions involving call options are
presented in a separate table below.

<TABLE>
<CAPTION>
NUMBER OF
SHARES/OPTIONS
NAME DATE INVOLVED PRICE PER SHARE
---- ---- TYPE OF TRANSACTION -------------- ---------------
<S> <C> <C> <C> <C>
Martin Massengale 03/08/99 Shares Purchased 150 $ 22.625
Randy Devening 03/23/99 Options Granted 10,000 19.625
Martin Massengale 03/30/99 Shares Purchased 150 19.75
John Chalsty 04/22/99 Options Granted 500 19.8125
Wendy Gramm 04/22/99 Options Granted 500 19.8125
John Jacobson, Jr. 04/22/99 Options Granted 500 19.8125
</TABLE>

69
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES/OPTIONS
NAME DATE INVOLVED PRICE PER SHARE
---- ---- TYPE OF TRANSACTION -------------- ---------------
<S> <C> <C> <C> <C>
Martin Massengale 04/22/99 Options Granted 500 $19.8125
Michael Sanem 04/22/99 Options Granted 500 19.8125
Jo Ann Smith 04/22/99 Options Granted 500 19.8125
Michael Sanem 05/21/99 Shares Purchased* 18,000 17.5
Michael Sanem 05/21/99 Shares Purchased* 2,000 20
Michael Sanem 05/21/99 Shares Purchased* 10,000 22.5
Larry Shipley 08/12/99 Options Exercised 4,000 7.9375
Larry Shipley 10/01/99 Restricted Stock Vested 6,193 N/A
Eugene Leman 11/01/99 Options Exercised 4,000 7.8125
Craig Hart 11/03/99 Options Exercised 148 7.8125
Richard L. Bond 12/30/99 Phantom Options Granted 21,000 17.5625
Randy Devening 12/30/99 Phantom Options Granted 6,000 17.5625
Craig Hart 12/30/99 Phantom Options Granted 3,120 17.5625
Eugene Leman 12/30/99 Phantom Options Granted 12,000 17.5625
Robert L. Peterson 12/30/99 Phantom Options Granted 30,000 17.5625
Larry Shipley 12/30/99 Phantom Options Granted 12,000 17.5625
Eugene Leman 02/01/00 Restricted Stock Granted 25,187 N/A
Eugene Leman 02/01/00 Options Granted 7,000 14.7500
Robert L. Peterson 02/09/00 Shares Purchased 60,000 15.2500
Robert L. Peterson 02/10/00 Shares Purchased 40,500 14.2500
Robert L. Peterson 02/11/00 Shares Purchased 19,500 13.8750
Richard L. Bond 02/18/00 Options Granted 50,000 12.9375
Randy Devening 02/18/00 Options Granted 6,000 12.9375
Craig Hart 02/18/00 Options Granted 3,120 12.9375
Eugene Leman 02/18/00 Options Granted 16,200 12.9375
Robert L. Peterson 02/18/00 Options Granted 60,000 12.9375
Larry Shipley 02/18/00 Options Granted 12,000 12.9375
John Jacobson, Jr. 02/22/00 Shares Purchased 3,000 13.1850
John Jacobson, Jr. 02/23/00 Shares Purchased 2,000 13.0000
Martin Massengale 02/23/00 Shares Purchased 275 12.7500
Larry Shipley 02/29/00 Shares Purchased 5,000 12.5000
Larry Shipley 03/01/00 Restricted Stock Vested 10,230 N/A
John Chalsty 04/20/00 Options Granted 500 16.1875
Wendy Gramm 04/20/00 Options Granted 500 16.1875
John Jacobson 04/20/00 Options Granted 500 16.1875
Martin Massengale 04/20/00 Options Granted 500 16.1875
Michael Sanem 04/20/00 Options Granted 500 16.1875
Jo Ann Smith 04/20/00 Options Granted 500 16.1875
</TABLE>

------------------------

* Purchased when call options automatically exercised

CALL OPTIONS

The following table sets forth call options acquired by IBP directors and
executive officers since October 1, 1998 including: (1) the date of the
transaction, (2) the name of the executive officer or

70
<PAGE>
director (3) the number of call options acquired, (4) the option price and
(5) the strike price per share. Each call option is convertible into 100 shares
of IBP common stock.

<TABLE>
<CAPTION>
NUMBER OF CALL
DATE NAME OPTIONS OPTION PRICE STRIKE PRICE
---- ---- -------------- ------------ ------------
<S> <C> <C> <C> <C>
11/19/98 Michael Sanem 10 call options $ 4.75/option $22.50/share strike price
11/19/98 Michael Sanem 50 call options $4.825/option $22.50/share strike price
11/19/98 Michael Sanem 40 call options $ 5.25/option $22.50/share strike price
4/14/99 Michael Sanem 30 call options $ 4.25/option $15.00/share strike price
4/14/99 Michael Sanem 20 call options $ 4.50/option $15.00/share strike price
4/15/99 Michael Sanem 20 call options $4.125/option $15.00/share strike price
4/16/99 Michael Sanem 30 call options $ 4.50/option $15.00/share strike price
</TABLE>

The following table sets forth call options disposed of by IBP directors and
executive officers since October 1, 1998 including: (1) the date of the
transaction, (2) the name of the executive officer or director, (3) the number
of call options disposed of, (4) the option price and (5) the strike price per
share. Each call option is convertible into 100 shares of IBP common stock.

<TABLE>
<CAPTION>
NUMBER OF
DATE NAME CALL OPTIONS OPTION PRICE STRIKE PRICE
---- ---- ------------ ------------ ------------
<S> <C> <C> <C> <C>
5/21/99 Michael Sanem 180 call options $4.875/option $17.50/share strike price
5/21/99 Michael Sanem 20 call options $3.625/option $20.00/share strike price
5/21/99 Michael Sanem 100 call options $5.0125/option $22.50/share strike price
11/19/99 Michael Sanem 100 call options $7.375/option $15.00/share strike price
</TABLE>

RECENT TRANSACTIONS

Except as set forth below with respect to IBP and the executive officers and
directors of IBP, and other than as a result of the voting agreement, there have
been no transactions in IBP common stock effected during the past 60 days by IBP
or by any of its executive officers, directors, subsidiaries or other affiliates
or by any pension, profit-sharing or similar plan of IBP or of its affiliates.

IBP

The table below sets forth the acquisitions of IBP common stock by IBP
carried out over the past sixty days, including: (1) the date of the
transaction, (2) the number of shares acquired and (3) the price per share
acquired.

<TABLE>
<CAPTION>
DATE ACQUISITION SHARES
ACQUIRED PRICE ACQUIRED
-------- ----------- --------
<S> <C> <C>
08/02/2000 $14.4596 15,000
09/06/2000 16.0625 15,000
10/05/2000 21.4854 15,000
</TABLE>

EXECUTIVE OFFICERS AND DIRECTORS

The table below sets forth the acquisitions of IBP common stock by IBP
executive officers and directors carried out over the past sixty days including:
(1) the name of the executive officer or

71
<PAGE>
director, (2) the date of the transaction, (3) the number of shares or options
involved and (4) the price per share acquired.

<TABLE>
<CAPTION>
NUMBER OF
SHARES/OPTIONS PRICE PER
NAME DATE TYPE OF TRANSACTION INVOLVED SHARE
---- ---- ------------------- -------------- ---------
<S> <C> <C> <C> <C>
Craig Hart 09/01/00 Options Exercised 1,126 $7.8125
Craig Hart 09/01/00 Options Exercised 600 7.5
Eugene Leman 10/19/00 Options Exercised 4,000 7.5
Larry Shipley 10/24/00 Options Exercised 420 7.5
</TABLE>

OTHER PARTIES

Other than as a result of the voting agreement, or pursuant to brokerage,
investment advisory or investment activities in the ordinary course of business,
there have been no transactions in IBP common stock effected during the past
60 days by Rawhide Acquisition, Rawhide Holdings, DLJMB, ADM, Booth Creek or
Messrs. Joyce, Peterson or Bond, or by any or their respective executive
officers or directors.

72
<PAGE>
CURRENT EXECUTIVE OFFICERS AND DIRECTORS OF IBP

The following persons are the executive officers and/or directors of IBP as
of the date of this proxy statement. Neither any of these persons nor IBP has
been convicted in a criminal proceeding during the past five years (excluding
traffic violations or similar misdemeanors), nor has any of these persons been a
party to any judicial or administrative proceeding during the past five years
that resulted in a judgment, decree or final order enjoining the person from
future violations of, or prohibiting activities subject to, federal or state
securities laws or a finding of any violation of federal or state securities
laws. Unless otherwise specified, each of the directors and executive officers
of IBP is a citizen of the United States of America and can be reached c/o IBP,
inc., 800 Stevens Port Drive, Dakota Dunes, South Dakota 57049.

RICHARD L. BOND, 53 Director since 1995

Mr. Bond has served as the President and Chief Operating Officer of IBP
since March 1, 1997. Prior to that he was President, Fresh Meats since 1995;
Executive Vice President, Beef Division since 1994; and the Group Vice
President, Beef Sales and Marketing since 1989.

JOHN S. CHALSTY, 66 Director since 1987

Mr. Chalsty served as Chairman of the Board of Donaldson, Lufkin &
Jenrette, Inc. ("DLJ"), now Credit Suisse First Boston (USA), Inc., from
February 1996 to November 2000. He served as Chief Executive Officer from
September 1986 to February 1998. Mr. Chalsty also served as President of DLJ
from 1986 to 1996, after having served as Chairman of DLJ's Capital Markets
Group for more than two years. He joined the firm in 1969 as an oil analyst. He
was elected to DLJ's Board of Directors in 1971 and was named Director of
Research in 1972. Mr. Chalsty was appointed head of the Investment Banking
Division in 1979. When the firm was reorganized in January 1984, Mr. Chalsty was
named Chairman of the Capital Markets Group. Currently, Mr. Chalsty is also a
member of the Board of Directors of EQ, Occidental Petroleum Corporation and
SAPPI Limited, and he was Senior Executive Vice President of AXA from January
1997 to January 2000. From 1990 to 1994 Mr. Chalsty served as Vice Chairman of
the New York Stock Exchange Inc.

DR. WENDY L. GRAMM, 55 Director since 1993

Dr. Gramm chaired the Commodity Futures Trading Commission from 1988 to
1993. She has served as Administrator for Information and Regulatory Affairs at
the White House Office of Management and Budget (OMB) and was the Executive
Director of the Presidential Task Force on Regulatory Relief. Dr. Gramm also
directed the Federal Trade Commission's Bureau of Economics. She holds a Ph.D.
in economics from Northwestern University and began her career as a professor of
economics at Texas A&M University. Dr. Gramm is an economist and is Director of
the Regulatory Studies Program of the Mercatus Center at George Mason University
in Fairfax, Virginia. She serves on the Boards of Directors of Enron
Corporation, State Farm Insurance Companies and Invesco Funds.

JOHN J. JACOBSON, JR., 56 Director since 1998

Mr. Jacobson is the President of TransAm Trucking, Inc. ("TransAm") which he
founded in 1987. For a twenty year period prior to 1987, Mr. Jacobson was a
member of the Board of Directors and an Executive Vice President of Idlewild
Foods, Inc., a holding company which controlled National Beef Packing, Co., a
beef products company; Liberal International Sales, an export sales company of
meat and by-products; and Supreme Feeders, a commercial cattle feeding
operation. Mr. Jacobson occupied executive positions in all of the companies
controlled by Idlewild Foods, Inc. In addition, Mr. Jacobson was the President
and founder of National Carriers, the nation's third largest refrigerated
carrier. TransAm is one of the carriers that provides services to IBP, and in
1999 approximately 15.2% of TransAm's revenues were derived from services
provided to IBP.

73
<PAGE>
EUGENE D. LEMAN, 57 Director since 1989

Mr. Leman has served as the Chief Executive Officer, Fresh Meats of IBP
since February 1, 2000. Prior to that he was the President, Fresh Meats since
1997; the President, Allied Products since 1995; and the Executive Vice
President, Pork Division since 1986.

DR. MARTIN A. MASSENGALE, 66 Director since 1996

Dr. Massengale has been President Emeritus; Director, Center for Grassland
Studies; and Foundation Distinguished Professor at the University of Nebraska
since 1994. From 1958 to 1976 Dr. Massengale was a professor at the University
of Arizona and the Associate Dean, College of Agriculture, University of
Arizona. From 1976 to the present he has been with the University of Nebraska
where he has served as a Vice Chancellor, Chancellor, Interim President and
President of the University, a position he held from 1991 to 1994.
Dr. Massengale has been named to the Board of Directors of Woodmen Accident &
Life Company, the Board of Managers of America First Companies, L.L.C., and the
Board of Trustees of Great Plains Funds.

ROBERT L. PETERSON, 68 Director since 1976

Mr. Peterson has served as Chairman of the Board and Chief Executive Officer
of IBP since 1981. Mr. Peterson joined IBP in 1961. He left IBP in 1969 for a
period during which he started a pork products company, Madison Foods, Inc. He
returned to IBP in 1976 when IBP acquired Madison Foods, Inc. In 1977, he was
elected IBP's President and Chief Operating Officer. Mr. Peterson is a Director
of MidAmerican Energy Company.

MICHAEL L. SANEM, 58 Director since 1998

Mr. Sanem has been self-employed as a cattle feeder and private investor
since 1994. Prior to this, Mr. Sanem was employed by Monfort of Colorado as Vice
President of Slaughter, Hides and By-Products Operations from 1979 to 1982. In
1982, he was promoted to Group Vice President, and in 1987, after ConAgra, Inc.
acquired Monfort, he became Monfort's Executive Vice President of Beef
Operations. From 1989 to 1994, Mr. Sanem was the President and a director of
Monfort, Inc., and was responsible for Monfort's beef, lamb, trucking and
specialty operations.

JO ANN R. SMITH, 61 Director since 1993

Ms. Smith served as Assistant Secretary for Marketing and Inspection
Services for the United States Department of Agriculture (USDA) from 1989 to
1993 and has served in numerous capacities in the livestock industry. She is a
former President of the National Cattlemen's Beef Association and has chaired
the Cattlemen's Beef Promotion and Research Board. Ms. Smith is President of
Smith Associates, an agricultural marketing business.

R. RANDOLPH DEVENING, 58

Chief Executive Officer of Foodbrands America, Inc. since 2000; 1994-2000
Chief Executive Officer and President, Foodbrands America, Inc.; Chairman of the
Board, Foodbrands America, Inc. 1994 to 1997.

CRAIG J. HART, 44

Vice President and Controller since 1995; 1993-1995 Assistant Vice President
and Controller; 1990-1993 Controller.

LARRY SHIPLEY, 44

Chief Financial Officer since 2000; 1997-2000 President, IBP Enterprises and
Chief Financial Officer; 1995-1997 Executive Vice President, Corporate
Development; 1995 Senior Vice President, Corporate Development; 1994-1995
Assistant to the Chairman; 1989-1994 Assistant to the President.

74
<PAGE>
MANAGEMENT OF IBP FOLLOWING THE MERGER

BOARD OF DIRECTORS

It is contemplated that immediately prior to the merger the Board of
Directors of Rawhide Holdings will consist of nine members, including
Messrs. Peterson and Bond. The remaining directors of Rawhide Holdings will
include five individuals to be designated by DLJMB, one individual to be
designated by Booth Creek, and one individual to be designated by ADM. The Board
of Directors of Rawhide Acquisition will be identical to that of Rawhide
Holdings. Rawhide Acquisition's directors immediately before the merger will
become the surviving company's directors after the merger.

EXECUTIVE OFFICERS

Pursuant to the merger agreement, the executive officers of IBP at the
effective time of the merger will be the executive officers of the surviving
company. For additional information regarding the executive officers of IBP, see
"Current Management of IBP."

75
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of November 17, 2000, to the knowledge of IBP, no person beneficially
owned 5% or more of any class of the outstanding voting securities of IBP,
except as follows:

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP PERCENT OF CLASS
-------------- ------------------------------------ ---------- ----------------
<S> <C> <C> <C>
Common Stock.......... Archer-Daniels-Midland Company ("ADM") 12,951,400(1) 12.3%
4666 Faries Parkway
Decatur, IL 62526
Common Stock.......... Brandes Investment Partners, L.P. 9,633,297(2) 9.1%
12750 High Bluff Drive
San Diego, CA 92130
Common Stock.......... Smithfield Foods, Inc. 6,714,341(3) 6.4%
200 Commerce Street
Smithfield, VA 23430
</TABLE>

------------------------

(1) ADM has shared investment power over 12,951,400 shares, and shared voting
power over 12,951,400 shares, according to its Schedule 13D dated
October 3, 2000, and filed with the Securities and Exchange Commission.

(2) Brandes Investment Partners, L.P.; Brandes Investment Partners Inc.; Brandes
Holdings, L.P.; Charles H. Brandes; Glenn R. Carlson; and Jeffrey A. Busby
have shared investment power over 9,633,297 shares, and shared voting power
over 9,633,297 shares, according to the Schedule 13D dated October 27, 2000,
and filed with the Securities and Exchange Commission.

(3) Smithfield Foods, Inc. has sole investment power over 6,714,341 shares, sole
voting power over 6,714,341 shares, and shared voting power over 250,000
shares, according to the Amendment No. 1 to Schedule 13D dated November 17,
2000, and filed with the Securities and Exchange Commission.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of November 17, 2000, beneficial
ownership of IBP common stock, the sole class of IBP stock, for each director of
IBP, and for each executive officer, and for all directors and executive
officers of IBP as a group. Unless otherwise indicated, the persons named below
have sole voting and investment power with respect to the common stock shown as
beneficially owned by them.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
AND NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER -- POSITION WITH IBP OWNERSHIP(1) PERCENT OF CLASS
--------------------------------------------- ------------- ----------------
<S> <C> <C>
Richard L. Bond -- Director and Executive Officer........... 117,010 *(2)
John S. Chalsty -- Director................................. 7,400 *
R. Randolph Devening -- Executive Officer................... 0 *
Wendy L. Gramm -- Director.................................. 4,900 *
Craig J. Hart -- Executive Officer.......................... 26,339 *
John J. Jacobson, Jr. -- Director........................... 12,600 *
Eugene D. Leman -- Director and Executive Officer........... 159,417 *
</TABLE>

76
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES
AND NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER -- POSITION WITH IBP OWNERSHIP(1) PERCENT OF CLASS
--------------------------------------------- ------------- ----------------
<S> <C> <C>
Martin A. Massengale -- Director............................ 2,375 *
Robert L. Peterson -- Director and Executive Officer........ 743,002 *
Michael L. Sanem -- Director................................ 60,600 *
Larry Shipley -- Executive Officer.......................... 67,524 *
Jo Ann R. Smith -- Director................................. 6,500 *
All Directors and Executive Officers As a Group (12
Persons).................................................. 1,207,667 1.1%
</TABLE>

------------------------

(1) This number includes stock options granted pursuant to the IBP 1987 Stock
Option Plan, the IBP 1993 Stock Option Plan, the 1996 Stock Option Plan and
the IBP Directors Stock Option Plan, and which are exercisable as of
October 1, 2000, or within 60 days thereafter: Mr. Bond 108,660;
Mr. Chalsty 4,900; Dr. Gramm 4,900; Mr. Hart 20,522; Mr. Jacobson 600;
Mr. Leman 88,200; Dr. Massengale 1,300; Mr. Peterson 276,000; Mr. Sanem 600;
Mr. Shipley 45,004; and Ms. Smith 2,700.

(2) Less than 1% of IBP's common stock.

77
<PAGE>
RAWHIDE ENTITIES AND DLJMB

RAWHIDE ENTITIES

Rawhide Holdings, a Delaware corporation, was organized for purposes of
acting as a holding company of IBP after completion of the merger. Rawhide
Acquisition, also a Delaware Corporation, was organized for the sole purpose of
completing the merger. Neither Rawhide Holdings nor Rawhide Acquisition has
carried on any activities to date other than those incident to their formation
and completion of the merger. All of the outstanding capital stock of Rawhide
Acquisition is owned by Rawhide Holdings. All of Rawhide Holdings' voting
securities are now owned by DLJ Merchant Banking Partners III, L.P. ("DLJMB
III"), a Delaware limited partnership, and subsequently will be held by ADM,
Booth Creek, Messrs. Joyce, Peterson and Bond, certain members of IBP management
and certain DLJMB funds, which, in addition to DLJMB III, will include: DLJ
Offshore Partners III, C.V., a Netherlands Antilles limited partnership
("Offshore III"), DLJMB Funding III, Inc., a Delaware corporation ("Funding
III") and DLJ ESC II, L.P., a Delaware limited partnership ("ESC II").

DLJMB III

DLJMB III is a Delaware limited partnership which makes investments for long
term appreciation. DLJ Merchant Banking III, L.P., a Delaware limited
partnership ("MBIII LP"), is the Associate General Partner of Partners III. DLJ
Merchant Banking III, Inc., a Delaware corporation ("MBIII Inc."), is the
Managing General Partner of DLJMB III. MBIII LP and MBIII Inc. make all of the
investment decisions on behalf of DLJMB III.

OFFSHORE III

Offshore III is a Netherlands Antilles limited partnership which makes
investments for long term appreciation. MBIII LP is the Associate General
Partner of Offshore III. MBIII Inc. is the Advisory General Partner of Offshore
III. MBIII LP and MBIII Inc. make all of the investment decisions on behalf of
Offshore III.

MBIII LP

MBIII LP is a Delaware limited liability company and is a registered
investment adviser. As the Associate General Partner of DLJMB III and Offshore
III, MBIII LP, in conjunction with MBIII Inc., participates in investment
decisions made on behalf of these entities. MBIII Inc. is the managing member of
MBIII LP.

MBIII INC.

MBIII Inc. is a Delaware corporation and is a registered investment adviser.
As the Managing General Partner of DLJMB III, and the Advisory General Partner
of Offshore III, MBIII Inc. is responsible for the day to day management of
these entities and, in conjunction with MBIII LP, participates in investment
decisions made on behalf of these entities. MBIII Inc. is a wholly owned
subsidiary of DLJ Capital Investors, Inc., a Delaware corporation ("DLJCI").

ESC II

ESC II is a Delaware limited partnership and "employee securities company"
as defined in the Investment Company Act of 1940, as amended. DLJ LBO Plans
Management Corporation, a Delaware corporation ("LBO"), as the Managing General
Partner of ESC II, makes all of the investment decisions on behalf of ESC II.

78
<PAGE>
LBO

LBO is a Delaware corporation and a registered investment advisor. LBO is a
wholly owned subsidiary of DLJCI. As the Managing General Partner of ESC II, LBO
is responsible for the day-to-day management of ESC II.

FUNDING III

Funding III is a Delaware corporation which makes investments for long term
appreciation generally side-by-side with DLJMB III. Funding III is a wholly
owned subsidiary of DLJCI.

DLJCI

DLJCI is a Delaware corporation and is a holding company. DLJCI is a wholly
owned subsidiary of Credit Suisse First Boston (USA), Inc., a Delaware
corporation ("CSFB-USA").

CSFB-USA

As of November 3, 2000, CSFB-USA, formerly known as Donaldson, Lufkin &
Jenrette, Inc., became a wholly owned subsidiary of Credit Suisse First
Boston, Inc., a Delaware corporation ("CSFBI"). CSFB-USA directly owns all of
the capital stock of DLJCI. CSFB-USA, acting on its own behalf or through its
subsidiaries, is a registered broker/dealer and registered investment advisor
engaged in investment banking, institutional trading and research, investment
management and financial and correspondent brokerage services.

CREDIT SUISSE GROUP

Credit Suisse Group ("CSG") is a corporation formed under the laws of
Switzerland. The principal business of CSG is acting as a holding company for a
global financial services group with five distinct specialized business units
that are independently operated. CSG and its consolidated subsidiaries are
comprised of (a) the Credit Suisse First Boston business unit that engages in
corporate and investment banking, trading (equity, fixed income and foreign
exchange), private equity investment and derivatives businesses on a worldwide
basis, (b) the Credit Suisse Asset Management business unit that provides asset
management and investment advisory services to institutional investors
worldwide, (c) the Credit Suisse Private Banking business unit that engages in
the global private banking business, (d) the Credit Suisse business unit that
engages in the Swiss domestic banking business and (e) the Winterthur business
unit that engages in the global insurance business.

CSFBI is a majority owned subsidiary of Credit Suisse First Boston, a Swiss
bank (the "Bank"). CSG is the ultimate parent company of the Bank and CSFBI.

ADDRESSES OF DLJMB RELATED ENTITIES

The address of the principal business and office of each of DLJMB III,
Offshore III, Funding III, MBIII LP, MBIII Inc., ESC II, LBO and DLJCI and
CSFB-USA is 277 Park Avenue, New York, New York 10172.

The address of the principal business and office of CSG is Paradeplats 1,
Postfach 8, CH-8070, Zurich, Switzerland. The address of the Bank's registered
head office is Uetlibergstrasse 231, PO Box 900, CH-8045 Zurich, Switzerland.
The address of the principal business and office of CSFBI is Eleven Madison
Avenue, New York, New York 10010.

79
<PAGE>
PREVIOUS CONVICTIONS OR CIVIL PROCEEDINGS

During the past two years, none of the above-named DLJMB related parties
(the "DLJMB Related Entities"), and none of their respective executive officers
or directors has been (1) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (2) a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.

PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS; COMMON STOCK OWNERSHIP

During the past five years, the DLJMB Related Entities have not had any
negotiations, transactions or material contacts with IBP or any of its
subsidiaries concerning any merger, consolidation, acquisition, tender offer or
other acquisition of any class of IBP's securities, election of IBP's directors
or sale of other transfer of a material amount of the assets of IBP other than
those previously described with respect to DLJMB, Rawhide Holdings and Rawhide
Acquisition and other than commercial or investment banking transactions in the
ordinary course of business. Other than as a result of the voting agreement, or
pursuant to brokerage, investment advisory or investment activities of the DLJMB
Related Entities and their affiliates in the ordinary course of business, there
have been no transactions in IBP common stock effected during the past 60 days
by the DLJMB Related Entities or by any executive officer or director of any
DLJMB Related Entity. The DLJMB Related Entities will incur no expenses in
connection with the merger apart from those incurred by DLJMB, Rawhide Holdings
and Rawhide Acquisition previously described.

As a result of the voting agreement, each of the DLJMB Related Entities may
be deemed to beneficially own the 17,239,353 shares of IBP common stock,
representing approximately 16.33% of IBP common stock outstanding, that are
subject to that agreement. Each of the DLJMB Related Entities disclaims
ownership of such IBP common stock. In addition, in the ordinary course of their
respective businesses, certain subsidiaries of CSFB-USA hold an aggregate of
approximately 295,741 shares of IBP common stock, in each case in investment
advisory, proprietary trading and brokerage accounts. Except as previously
described, the DLJMB Related Entities have no interest in IBP securities or
contracts, arrangements or understandings with respect thereto.

RAWHIDE HOLDINGS AND RAWHIDE ACQUISITION

The names of the directors and the names and titles of the executive
officers of Rawhide Holdings and of Rawhide Acquisition as of the date of this
proxy statement, and their principal occupations, are set forth below. Neither
any of these persons, Rawhide Holdings nor Rawhide Acquisition has been
(1) convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (2) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, United States
federal or state securities laws or a finding of any violation with respect to
such laws. Each of the directors or executive officers of

80
<PAGE>
Rawhide Holdings and Rawhide Acquisition is a citizen of the United States of
America, and has his principal business address is 277 Park Avenue, New York,
New York 10172.

<TABLE>
<CAPTION>
NAME PRESENT PRINCIPAL OCCUPATION
---- ----------------------------
<S> <C>
Ari Benacerraf................. Director, President and Treasurer, Rawhide Holdings;
Director, President and Treasurer, Rawhide Acquisition;
Principal, DLJ Merchant Banking III, Inc. Mr. Benacerraf
joined DLJ in 1995.

OhSang Kwon.................... Director, Vice President and Secretary, Rawhide Holdings;
Director, Vice President and Secretary, Rawhide Acquisition;
Vice President, DLJ Merchant Banking III, Inc. Mr. Kwon
joined DLJ in 1997. From 1995 to 1997, Mr. Kwon was an
associate with the law firm Davis, Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017.
</TABLE>

The principal offices of Rawhide Holdings, Rawhide Acquisition and DLJMB are
located at 277 Park Avenue, New York, New York 10172. Their telephone number is
(212) 892-3000.

Neither Rawhide Holdings nor Rawhide Acquisition has any operations, other
than those incident to their formation and completion of the merger, or owns any
real property. Except for those actions described under "Special
Factors--Shareholder Lawsuits Challenging the Merger", there are no pending
legal proceedings to which Rawhide Holdings or Rawhide Acquisition is a party or
which relate to their respective property.

FEES

Donaldson, Lufkin & Jenrette Securities Corporation, an affiliate of
CSFB-USA, is expected to receive a fee of $15.0 million in cash from Rawhide
Holdings upon completion of the merger related to merger and acquisition
advisory work performed for Rawhide Holdings and DLJMB. In addition, affiliates
of Donaldson, Lufkin & Jenrette Securities Corporation are expected to receive
customary placement fees in connection with the financing of the merger, which
are expected to be approximately $69.0 million.

81
<PAGE>
ARCHER-DANIELS-MIDLAND COMPANY

ARCHER-DANIELS-MIDLAND COMPANY

Archer-Daniels-Midland Company, or ADM, a Delaware corporation, is engaged
in the business of procuring, transporting, storing, processing and
merchandising agricultural commodities and products. The address of the
principal business office for ADM is 4666 Faries Parkway, Box 1470, Decatur,
Illinois 62525. The business telephone number for ADM is 217-424-5200.

PREVIOUS CONVICTIONS OR CIVIL PROCEEDINGS

During the past five years, except as set forth below, ADM has not been
(1) convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (2) a party to any judicial or administrative proceeding
(except for matters that were dismissed without sanction or settlement) that
resulted in a judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities laws. On
October 15, 1996, ADM pled guilty to a two count information in the Northern
District of Illinois pursuant to an agreement with the Department of Justice.
This information states that ADM engaged in anticompetitive conduct in
connection with the sale of lysine and citric acid. In connection with its
agreement ADM paid the United States a fine of $70 million with respect to
lysine and $30 million with respect to citric acid. On May 27, 1998, ADM pled
guilty to a three count indictment in the Federal Court of Canada pursuant to an
agreement with Director of Investigation and Research and the Attorney General
of Canada. The indictment alleged that ADM engaged in anticompetitive conduct in
connection with lysine and citric acid. ADM paid a fine of $16 million (Canadian
Dollars).

PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS; COMMON STOCK OWNERSHIP

During the past five years ADM has not had any negotiations, transactions or
material contacts with IBP or any of its subsidiaries concerning any merger,
consolidation, acquisition, tender offer or other acquisition of any class of
the subject company's securities, election of IBP's directors or sale or other
transfer of a material amount of the assets of IBP other than those previously
described. There have been no transactions in IBP common stock effected by ADM,
or by any of ADM's executive officers or directors, during the past 60 days. ADM
beneficially owns 12,951,400 shares of IBP common stock, representing
approximately 12.27% of the IBP common stock outstanding.

ADM DIRECTORS AND EXECUTIVE OFFICERS

The names of the directors and the names and titles of the executive
officers of ADM as of the date of this proxy statement, and their principal
occupations, are set forth below. All of the persons named below have been
executive officers of their respective companies or employed as otherwise
specified below for at least the last five years. Except as set forth below,
each of the directors or executive officers of ADM is a citizen of the United
States of America, and has a principal business address of 4666 Faries Parkway,
Box 1470, Decatur, Illinois 62525. None of these persons has been (1) convicted
in a criminal proceeding during the last five years (excluding traffic
violations or similar misdemeanors) or (2) a party to any judicial or
administrative proceeding during the past five years (except for matters that
were dismissed without sanction or settlement) that resulted in a judgment,

82
<PAGE>
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.

G. Allen Andreas............... Chairman of the Board of Directors from January 1999. Chief
Executive Officer from July 1997. President from July 1997 to
February 1999. Counsel to the Executive Committee from September
1994 to July 1997. Vice President from 1988 to July 1997.

John R. Block.................. Member of the Board of ADM. President, Food Distributors
International (a trade association whose members are independent
wholesale grocers and food service distributors). Business
address: 201 Park Washington Court, Falls Church, VA 22046

Richard Burt................... Member of the Board of ADM. Chairman of IEP Advisors, LLP (a
direct investment and advisory services organization). Mr. Burt
is also the Chairman of Weirton Steel Corporation. Until 1994,
Mr. Burt was a partner with McKinsey & Company, specializing in
international business strategy and telecommunications, at which
time he became Chairman of International Equity Partners, a
Washington consulting firm, and later in 1998 formed IEP
Advisors, LLP of which he serves as Chairman. Business address:
1101 Connecticut Ave., N.W., Suite 804, Washington, D.C. 20036.

Mollie Hale Carter............. Member of the Board of ADM. Chairman, Sunflower Bank and Vice
President, Star A, Inc. (a farming and ranching operation). Ms.
Carter was a Senior Investment Officer for the John Hancock
Mutual Life Insurance Company from 1987 until 1997 at which time
she became Chairman of Sunflower Bank in Salina, Kansas and Vice
President of Star A, Inc. Business address: 2090 S. Ohio,
Salina, KS 67401.

G. O. Coan..................... Member of the Board of ADM. Chief Executive Officer of Gold Kist
Inc. (a farmer-owned cooperative). Business address: P.O. Box
2210, Atlanta, GA 30301.

Herman de Boon................. Member of the Board of ADM. Chief Executive Officer of Royal
Cebeco Group (an international agri-food cooperative). Business
address: CEBECO Handelsraad, 31 Blaak, Rotterdam, Netherlands
3000. Mr. de Boon is a citizen of the Netherlands.

F. Ross Johnson................ Member of the Board of ADM. Chairman of RJM Group, Inc. (an
international management and advisory organization). Business
address: 200 Galleria Parkway, Suite 970, Atlanta, GA 30339. Mr.
Johnson is a citizen of Canada.

D. J. Mimran................... Member of the Board of ADM. Chief Executive Officer of Groupe
Mimran and President of Eurafrique, Sometra and Cavpa
(international grain trading companies). Mr. Mimran is a citizen
of France.

M. Brian Mulroney.............. Member of the Board of ADM. Senior Partner in the law firm of
Ogilvy Renault. Business address: 1981 Avenue McGill College,
Suite 1100, Montreal, Quebec, Canada H3A 3C1. Mr. Mulroney is a
citizen of Canada.
</TABLE>

83
<PAGE>

<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE FOR LAST FIVE YEARS
---- ----------------------------------------------------------------
<S> <C>
Robert S. Strauss.............. Member of the Board of ADM. Partner in the law firm of Akin,
Gump, Strauss, Hauer & Feld. Business address: 1333 New
Hampshire Ave., N.W., Washington, D.C. 20036.

J. K. Vanier................... Member of the Board of ADM. Chief Executive Officer, Western
Star Ag. Resources, Inc. (investments and livestock). Business
address: Box 58, Salina, KS 67401.

O. G. Webb..................... Member of the Board of ADM. Farmer. Former Chairman of the Board
and President, GROWMARK, Inc. (a farmer-owned cooperative).
Business address: P.O. Box 2500, Bloomington, IL 61702.

Andrew Young................... Member of the Board of ADM. Chairman of GoodWorks International
(a specialty consulting group). Ambassador Young served as Vice-
Chairman of the Law Companies Group, an engineering and
environmental consulting company, from January 1990 until 1996
when he retired from this position to serve as Co-Chairman of
the Atlanta Committee for the Olympic Games. In January 1997,
Ambassador Young was appointed as Co-Chairman of GoodWorks
International and in 1998 was appointed Chairman of that
company. Business address: 303 Peachtree St., N.E., Suite 4800,
Atlanta, GA 30308.

Martin L. Andreas.............. Senior Vice President from 1989. Assistant to the Chief
Executive from 1989.

Charles P. Archer.............. Treasurer from October 1992.

Maureen K. Ausura.............. Vice President from June 2000. Senior Vice President, Human
Resources, of Giant Eagle, Inc. (a supermarket operator) from
1996. Giant Eagle is located at 101 Kappa Dr., Pittsburgh, PA
15238. Various senior personnel positions with Campbell Soup
Company (a food manufacturer) from 1984. Campbell Soup is
located at Campbell Place, Camden, NJ 08103-1799.

Lewis W. Batchelder............ Group Vice President from July 1997. Senior Vice President of
ADM/ Growmark. Various grain merchandising positions since 1971.

Howard E. Buoy................. Group Vice President from January 1993.

William H. Camp................ Group Vice President and President, North American Oilseed
Processing Division from April 2000. Group Vice President and
President, South American Oilseed Processing Division from March
1999 to April 2000. Vice President from April 1993 to March
1999.

Mark J. Cheviron............... Vice President from July 1997. Vice President of Corporate
Security and Administrative Services since May 1997. Director of
Security since 1980.

Larry L. Cunningham............ Senior Vice President from February 2000. Consultant for ADM
from October 1999 to February 2000. Group Vice President and
President of ADM Corn Processing Division from October 1996 to
October 1999. President of ADM Food Additives Division from
October 1998 to October 1999. Vice President from July 1993 to
October 1996.
</TABLE>

84
<PAGE>

<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE FOR LAST FIVE YEARS
---- ----------------------------------------------------------------
<S> <C>
Anthony P. Delio............... Vice President from May 2000. President of ADM Protein
Specialties Division from October 1999. President of ADM
Nutraceutical Division from May 1999. Various senior product
development positions with Mars, Inc (a candy maker) from 1980.
Mars is located at 6885 Elm St., McLean, VA 22101.

Dennis C. Garceau.............. Vice President from April 1999. President of ADM Technical
Services Department. Various senior engineering positions from
1969.

Craig L. Hamlin................ Senior Vice President from June 2000. Group Vice President from
October 1994 to June 2000. President of ADM Milling from 1989.

Edward A. Harjehausen.......... President of ADM Corn Processing Division from July 2000.
President of ADM BioProducts and Food Additives From October
1999 to July 2000. Vice President from October 1992.

Burnell D. Kraft............... Senior Vice President from July 1997. Group Vice President from
January 1993 to July 1997. President of ADM/Growmark, ADM/
Countrymark and Tabor Grain Co.

Paul L. Krug, Jr............... Vice President from 1991 and President of ADM Investor Services.

John E. Long................... Vice President from July 1996. President of ADM Research
Division from 1992 to March 2000. Various senior research
positions from 1975.

Michael Lusk................... Vice President from November 1999 Senior Vice President with
International Risk Management Group, an insurance broker, from
1989. International Risk Management is located at Metro Park, 99
Wood Avenue South, Iselin, NJ, 08830-4114.

John D. McNamara............... President from February 1999. Group Vice President and President
of North American Oilseed Processing Division from July 1997 to
February 1999. President of ADM Agri-Industries since 1992. Mr.
McNamara is a citizen of Canada.

Steven R. Mills................ Vice President from February 2000. Controller from October 1994.

Stephen W. Minder.............. Corporate Compliance Officer from July 1997. Various senior
internal audit positions since 1990.

Paul B. Mulhollem.............. Senior Vice President from October 1999. Group Vice President
from July 1997 to October 1999. Vice President from January 1996
to July 1997. Managing Director of ADM International, Ltd., from
1993.

Brian F. Peterson.............. Group Vice President and Managing Director of ADM International,
Ltd., from October 1999. Vice President from January 1996 to
October 1999. President of ADM Protein Specialties Division from
February 1999 to October 1999. President of ADM BioProducts
Division from 1995 to October 1999.

Raymond V. Preiksaitis......... Group Vice President from July 1997. Vice President --
Management Information Systems from 1988 to July 1997.

John G. Reed................... Vice President from 1982.

Richard P. Reising............. Senior Vice President from July 1997. Vice President, Secretary
and General Counsel from 1991 to 1997.
</TABLE>

85
<PAGE>

<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE FOR LAST FIVE YEARS
---- ----------------------------------------------------------------
<S> <C>
John D. Rice................... Senior Vice President from February 2000. Group Vice President
and President, North American Oilseed Processing Division from
February 1999 to February 2000. Vice President from 1993 to
1999. President of ADM Food Oils Division from December 1996 to
February 2000.

Kenneth A. Robinson............ Vice President from January 1996. Vice President of ADM
Processing Division from 1985.

Douglas J. Schmalz............. Vice President and Chief Financial Officer from 1986.

David J. Smith................. Vice President, Secretary and General Counsel from July 1997.
Assistant General Counsel from 1995 to 1997. Assistant Secretary
from 1988 to 1997. Member of the Law Department since 1981.

Stephen H. Yu.................. Vice President from January 1996. Managing Director of ADM Asia-
Pacific, Ltd., from 1993.
</TABLE>

86
<PAGE>
BOOTH CREEK AND JEFFREY J. JOYCE

BOOTH CREEK PARTNERS LIMITED III, LLLP

Booth Creek Partners Limited III, LLLP, or Booth Creek, is a Colorado
limited liability limited partnership. Booth Creek was organized for the purpose
of holding shares in Corporate Brand Foods America, Inc., or CBFA, which was
acquired by IBP in February 2000. George N. Gillett Jr. and his wife, Rose
Gillett, are the general partners of Booth Creek Partners Limited III, LLLP.
Mr. Gillett's four sons are the limited partners of Booth Creek. Mr. Gillett is
sole owner of Booth Creek Management Corporation, an investment management
company, and is its Chief Executive Officer and sole director. The address of
the principal business and office of Booth Creek, Mr. Gillett and Mrs. Gillett
is 1000 South Frontage Road, West, Suite 100, Vail, Colorado 81657.

JEFFREY J. JOYCE

Jeffrey J. Joyce has served as Executive Vice President of Booth Creek
Management Corporation and several of its affiliates since 1994. The business
address of Mr. Joyce is 1950 Spectrum Circle, Suite 400, Marietta, Georgia
30067.

PREVIOUS CONVICTIONS OR CIVIL PROCEEDINGS

During the past five years, none of Booth Creek, Mr. Gillett, Mrs. Gillett
or Mr. Joyce has been (1) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (2) a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.

PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS; COMMON STOCK OWNERSHIP

In January 1999, Corporate Brand Foods America, Inc., or CBFA, began
discussions with IBP and other meat suppliers in connection with a proposal to
create a strategic alliance for purchasing raw materials. In August 1999, IBP
initiated discussions with CBFA which resulted in the acquisition of CBFA by IBP
on February 7, 2000. As a result of this transaction in exchange for their
respective equity interests in CBFA, Booth Creek received 3,644,923 shares of
IBP common stock and Mr. Joyce received 643,030 shares. Both Mr. Gillett, in his
capacity as then-Chairman of the Board of CBFA, and Mr. Joyce, in his capacity
as then-President of CBFA, participated in the negotiation of this transaction.

Except as previously described, during the past five years Booth Creek,
Mr. Gillett, Mrs. Gillett and Mr. Joyce have not had any negotiations,
transactions or material contacts with IBP or any of its subsidiaries concerning
any merger, consolidation, acquisition, tender offer or other acquisition of any
class of IBP's securities, election of IBP's directors or sale or other transfer
of a material amount of assets of IBP other than those previously described and
other than commercial transactions in the ordinary course of business. There
have been no transactions in IBP common stock effected during the past 60 days
by any of Booth Creek, Mr. Gillett, Mrs. Gillett or Mr. Joyce.

Booth Creek beneficially owns 3,644,923 shares of IBP common stock,
representing approximately 3.45% of IBP common stock outstanding. As general
partners of Booth Creek, Mr. and Mrs. Gillett may be deemed to beneficially own
the IBP common stock held by Booth Creek. Mr. Joyce beneficially owns 643,030
shares of IBP common stock, representing approximately 0.61% of IBP common stock
outstanding. Except as previously described, Booth Creek, Mr. Gillett,
Mrs. Gillett or Mr. Joyce have no interest in IBP securities or contracts,
arrangements or understandings with respect thereto.

FEES

As compensation for advisory services performed by Booth Creek in connection
with the exploration of strategic alternatives for improving IBP's stock price
and the development of the merger proposal, see "Special Factors--Background of
the Merger", Booth Creek is expected to receive a fee of $3,750,000 in cash from
Rawhide Holdings upon completion of the merger.

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<PAGE>
SHAREHOLDER PROPOSALS

If the merger is not completed for any reason, shareholder proposals
intended to be included in our proxy statement in connection with our 2001
Annual Meeting of Shareholders must be received at IBP's principal offices at
800 Stevens Port Drive, Suite 836, Dakota Dunes, South Dakota 57049, marked to
the attention of the Secretary of IBP, no later than , 2000. It is
suggested that any stockholder desiring to submit a proposal do so by certified
mail, return receipt requested. Stockholders should also note that, in addition
to the requirement of timely receipt by IBP of a proposal, a proposal must
comply with the requirements of Section 14(a) of the Securities Exchange Act of
1934 to be included in the proxy solicitation material for the 2001 Annual
Meeting of Stockholders.

Between , 2000 and , 2000, you may make a proposal
at our 2001 Annual Meeting of Shareholders; however, we are not required to
include your proposal in our proxy statement. If any shareholder proposal is
submitted after , 2000, the board of directors will be allowed to
use its discretionary voting authority when the proposal is raised at the annual
meeting, without any discussion of the matter in the proxy statement.

INDEPENDENT ACCOUNTANTS

The consolidated balance sheets as of December 26, 1998 and December 25,
1999 and the related consolidated statements of operations, changes in
shareholders' equity, and cash flows for each of the three fiscal years in the
periods ended December 27, 1997, December 26, 1998 and December 25, 1999,
incorporated by reference in this proxy statement, have been audited by
PricewaterhouseCoopers LLP, independent accountants. A representative of
PricewaterhouseCoopers LLP will be at the special meeting to answer questions
from shareholders and will have the opportunity to make a statement.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements, and other
documents with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. The Exchange Act file number for our SEC filings is
001-06085. Our SEC filings made electronically through the SEC's EDGAR system
are available to the public at the SEC's website at HTTP://WWW.SEC.GOV. You may
also read and copy any document we file with the SEC at the following SEC public
reference rooms:

<TABLE>
<S> <C> <C>
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W. 500 West Madison Street Suite 1300
Washington, D.C. 20549 Chicago, Illinois 60621 New York, New York 10048
</TABLE>

You may also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, at prescribed rates. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an Internet world wide web site that contains reports, proxy
statements and other information about issuers, including IBP, who file
electronically with the SEC. The address of that site is HTTP://WWW.SEC.GOV. You
can also inspect reports, proxy statements and other information about IBP at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.

IBP, Rawhide Holdings, Rawhide Acquisition, DLJ Merchant Banking Partners
III, L.P., DLJ Offshore Partners III, C.V., DLJMB Funding III, Inc., DLJ ESC II,
L.P., ADM, Robert L. Peterson and Richard L. Bond have filed with the SEC a
Rule 13e-3 Transaction Statement on Schedule 13E-3 with the SEC with respect to
the merger. As permitted by the SEC, this proxy statement omits certain
information contained in the Schedule 13E-3. The Schedule 13E-3, including any
amendments and exhibits filed or incorporated by reference as a part thereof, is
available for inspection or copying as set forth above.

88
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows us to "incorporate by reference" certain documents, which
means that we can disclose important information to you by referring you to
those documents. The information in the documents incorporated by reference is
considered to be part of this proxy statement, except to the extent that this
proxy statement updates or supersedes the information. We incorporate by
reference the documents listed below which we have previously filed with the SEC
(SEC file no. 001-06085):

- IBP's Annual Report on Form 10-K for the fiscal year ended December 25,
1999;

- IBP's Quarterly Reports on Form 10-Q for the quarters ended March 25,
2000, June 24, 2000 and September 23, 2000; and

- IBP's Current Reports on Form 8-K dated October 2, 2000 and November 3,
2000.

IBP also incorporates by reference the information contained in all other
documents it files with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this proxy statement and before the date of the
special meeting. The information will be considered part of this proxy statement
from the date the document is filed and will supplement or amend the information
contained in this proxy statement.

IBP will provide you, at no charge, a copy of the documents it incorporates
by reference in this proxy statement. To obtain timely delivery, requests for
copies should be made no later than , 2000 (five business days
before the date of the special meeting). To request a copy of any or all of
these documents, you should write, telephone or e-mail IBP at:

Investor Relations Department
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
(605) 235-2587
Email: [email protected]

These documents are also included in our SEC filings which are made
electronically through the SEC's EDGAR system and are available to the public at
the SEC's website at HTTP://WWW.SEC.GOV.

------------------------

You should rely only on the information contained in this proxy statement,
or to which IBP has referred you, to vote your shares at the special meeting.
IBP has not authorized anyone to provide you with information that is different.
This proxy statement is dated , 2000. You should not assume that the
information contained in this proxy statement is accurate as of any date other
than that date, and the mailing of this proxy statement to shareholders does not
create a solicitation of a proxy in any jurisdiction where, or to or from any
person to whom, it is unlawful to make such proxy solicitation in such
jurisdiction.

BY ORDER OF THE BOARD OF DIRECTORS

Sheila B. Hagen
SECRETARY

, 2000

89
<PAGE>
APPENDIX A

AGREEMENT AND PLAN OF MERGER
DATED AS OF
OCTOBER 1, 2000
AMONG
IBP, INC.
RAWHIDE HOLDINGS CORPORATION
AND
RAWHIDE ACQUISITION CORPORATION
<PAGE>
TABLE OF CONTENTS(1)

<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
ARTICLE 1 DEFINITIONS
Section 1.01. DEFINITIONS................................................. 1

ARTICLE 2 THE MERGER
Section 2.01. THE MERGER.................................................. 3
Section 2.02. CONVERSION OF SHARES........................................ 4
Section 2.03. SURRENDER AND PAYMENT....................................... 5
Section 2.04. DISSENTING SHARES........................................... 6
Section 2.05. STOCK OPTIONS............................................... 7
Section 2.06. WITHHOLDING RIGHTS.......................................... 7

ARTICLE 3 THE SURVIVING CORPORATION
Section 3.01. CERTIFICATE OF INCORPORATION................................ 8
Section 3.02. BYLAWS...................................................... 8
Section 3.03. DIRECTORS AND OFFICERS...................................... 8

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01. CORPORATE EXISTENCE AND POWER............................... 8
Section 4.02. CORPORATE AUTHORIZATION..................................... 8
Section 4.03. GOVERNMENTAL AUTHORIZATION.................................. 9
Section 4.04. NON-CONTRAVENTION........................................... 9
Section 4.05. CAPITALIZATION.............................................. 9
Section 4.06. SUBSIDIARIES................................................ 10
Section 4.07. SEC FILINGS................................................. 11
Section 4.08. FINANCIAL STATEMENTS........................................ 11
Section 4.09. DISCLOSURE DOCUMENTS........................................ 12
Section 4.10. ABSENCE OF CERTAIN CHANGES.................................. 12
Section 4.11. NO UNDISCLOSED MATERIAL LIABILITIES......................... 14
Section 4.12. LITIGATION.................................................. 15
Section 4.13. TAXES....................................................... 15
Section 4.14. ERISA....................................................... 16
Section 4.15. LABOR MATTERS............................................... 19
Section 4.16. COMPLIANCE WITH LAWS........................................ 20
Section 4.17. LICENSES AND PERMITS........................................ 20
Section 4.18. INTELLECTUAL PROPERTY....................................... 21
Section 4.19. ENVIRONMENTAL MATTERS....................................... 21
Section 4.20. FINDERS' FEES............................................... 23
Section 4.21. INAPPLICABILITY OF CERTAIN RESTRICTIONS..................... 23
Section 4.22. RIGHTS PLAN................................................. 23

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT
Section 5.01. CORPORATE EXISTENCE AND POWER............................... 23
Section 5.02. CORPORATE AUTHORIZATION..................................... 23
Section 5.03. GOVERNMENTAL AUTHORIZATION.................................. 24
Section 5.04. NON-CONTRAVENTION........................................... 24
Section 5.05. DISCLOSURE DOCUMENTS........................................ 24
Section 5.06. FINDERS' FEES............................................... 25
</TABLE>

------------------------

(1) The Table of Contents is not a part of this Agreement.

A-i
<PAGE>

<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
Section 5.07. FINANCING................................................... 25
Section 5.08. OWNERSHIP OF SHARES......................................... 26
Section 5.09. OWNERSHIP OF PARENT STOCK................................... 26

ARTICLE 6 COVENANTS OF THE COMPANY
Section 6.01. CONDUCT OF THE COMPANY...................................... 26
Section 6.02. STOCKHOLDER MEETING; PROXY MATERIAL......................... 29
Section 6.03. ACCESS TO INFORMATION....................................... 29
Section 6.04. OTHER OFFERS................................................ 30
Section 6.05. NOTICES OF CERTAIN EVENTS................................... 32
Section 6.06. RESIGNATION OF DIRECTORS.................................... 32

ARTICLE 7 COVENANTS OF PARENT
Section 7.01. SEC FILINGS................................................. 33
Section 7.02. CONFIDENTIALITY............................................. 33
Section 7.03. VOTING OF SHARES............................................ 33
Section 7.04. DIRECTOR AND OFFICER LIABILITY.............................. 33
Section 7.05. EMPLOYEE MATTERS............................................ 34
Section 7.06. FINANCING................................................... 34
Section 7.07. OTHER ARRANGEMENTS.......................................... 34
Section 7.08. OBLIGATIONS OF MERGER CO.................................... 34
Section 7.09. AMENDMENTS TO THE VOTING AGREEMENT.......................... 34
Section 7.10. ACQUISITIONS OF SHARES...................................... 34
Section 7.11. NOTICES OF CERTAIN EVENTS................................... 35

ARTICLE 8 COVENANTS OF PARENT AND THE COMPANY
Section 8.01. BEST EFFORTS................................................ 35
Section 8.02. CERTAIN FILINGS............................................. 36
Section 8.03. PUBLIC ANNOUNCEMENTS........................................ 36
Section 8.04. FURTHER ASSURANCES.......................................... 37

ARTICLE 9 CONDITIONS TO THE MERGER
Section 9.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY................. 37
Section 9.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER CO....... 38
Section 9.03. CONDITION TO THE OBLIGATION OF THE COMPANY.................. 39

ARTICLE 10 TERMINATION
Section 10.01. TERMINATION................................................. 40
Section 10.02. EFFECT OF TERMINATION....................................... 41

ARTICLE 11 MISCELLANEOUS
Section 11.01. NOTICES..................................................... 42
Section 11.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................. 43
Section 11.03. AMENDMENTS; NO WAIVERS...................................... 43
Section 11.04. EXPENSES.................................................... 43
Section 11.05. SUCCESSORS AND ASSIGNS; BENEFIT............................. 43
Section 11.06. GOVERNING LAW............................................... 44
Section 11.07. COUNTERPARTS; EFFECTIVENESS................................. 44
</TABLE>

A-ii
<PAGE>
AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of October 1, 2000 among IBP, inc., a
Delaware corporation (the "COMPANY"), Rawhide Holdings Corporation, a Delaware
corporation ("PARENT"), and Rawhide Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("MERGER CO.").

W I T N E S S E T H:

WHEREAS, as of the date of execution of this Agreement, all of the
outstanding capital stock of Parent is owned, in the aggregate, by DLJ Merchant
Banking Partners III, L.P. ("DLJMB");

WHEREAS, Parent and Merger Co. are unwilling to enter into this Agreement
unless, contemporaneously with the execution and delivery of this Agreement,
certain beneficial and record stockholders of the Company (the "STOCKHOLDERS")
enter into a Voting Agreement and Irrevocable Proxy (the "VOTING AGREEMENT")
providing for certain actions relating to certain of the shares of common stock
of the Company owned by them; and

WHEREAS, Parent and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger (as defined
in Section 2.01) and also to prescribe certain conditions to the Merger;

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:

ARTICLE 1
DEFINITIONS

Section 1.1. DEFINITIONS. Each of the following terms is defined in the
Section set forth opposite such term:

<TABLE>
<CAPTION>
TERM SECTION
---- -------
<S> <C>
Acquisition Proposal........................................ 6.04
Balance Sheet............................................... 4.08
Balance Sheet Date.......................................... 4.08
Code........................................................ 4.14
Common Stock................................................ 4.05
Company Disclosure Documents................................ 4.09
Company Proxy Statement..................................... 4.09
Company Stockholder Meeting................................. 6.02
Company Securities.......................................... 4.05
Company 10-K 4.07
Company 10-Qs 4.07
Confidentiality Agreement................................... 7.02
Delaware Law................................................ 2.01
Dissenting Shares........................................... 2.04
DLJ Bridge Fund............................................. 5.07
DLJ Senior Debt Fund........................................ 5.07
DLJMB....................................................... recitals
DLJSC....................................................... 5.06
Effective Time.............................................. 2.01
Exchange Act................................................ 4.03
Exchange Agent.............................................. 2.03
Employee Plans.............................................. 4.14
</TABLE>

A-1
<PAGE>

<TABLE>
<CAPTION>
TERM SECTION
---- -------
<S> <C>
Environmental Laws.......................................... 4.19
Environmental Permits....................................... 4.19
ERISA....................................................... 4.14
ERISA Affiliate............................................. 4.14
Exchange Agent.............................................. 2.03
Financing................................................... 5.07
Financing Agreements........................................ 5.07
Financing Entities.......................................... 5.07
Hazardous Substances........................................ 4.19
HSR Act..................................................... 4.03
Intellectual Property Right................................. 4.18
International Plan.......................................... 4.14
Lien........................................................ 4.04
Material Adverse Effect..................................... 4.01
Merger...................................................... 2.01
Merger Co. Common Stock..................................... 2.02
Merger Consideration........................................ 2.02
Multiemployer Plan.......................................... 4.14
Option...................................................... 2.05
Parent Disclosure Documents................................. 7.01
Payment Event............................................... 6.04
Permits..................................................... 4.17
Person...................................................... 2.03 and 6.04
Pre-Closing Tax Period 4.13
Preferred Stock............................................. 4.05
Representatives............................................. 6.03
Required Amounts............................................ 5.07
Returns..................................................... 4.13
SEC......................................................... 4.07
Share....................................................... 2.01
Special Committee........................................... 2.01
Stockholders................................................ recitals
Subsidiary.................................................. 4.06
Subsidiary Securities....................................... 4.06
Superior Proposal........................................... 6.04
Surviving Corporation....................................... 2.01
Surviving Corporation Common Stock.......................... 2.02
Tax Asset................................................... 4.13
Termination Fee............................................. 6.04
Title IV Plan............................................... 4.14
Transaction Statement....................................... 7.01
Voting Agreement............................................ recitals
</TABLE>

ARTICLE 2
THE MERGER

Section 2.1. THE MERGER. (a) At the Effective Time (as defined below),
Merger Co. shall be merged (the "MERGER") with and into the Company in
accordance with Delaware Law (as defined below), whereupon the separate
existence of Merger Co. shall cease, and the Company shall be the surviving
corporation (the "SURVIVING CORPORATION").

A-2
<PAGE>
(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and Merger Co.
will file a certificate of merger with the Secretary of State of the State of
Delaware and make all other filings or recordings required by Delaware Law in
connection with the Merger. The Merger shall become effective at such time as
the certificate of merger is duly filed with the Secretary of State of the State
of Delaware or at such later date or time as is specified in the certificate of
merger (the "EFFECTIVE TIME").

(c) From and after the Effective Time, the Surviving Corporation shall
possess all the property, rights, privileges, immunities, powers and franchises
and be subject to all of the debts, liabilities, obligations, restrictions,
disabilities and duties of the Company and Merger Co., all as provided under
Delaware Law.

(d) The Company hereby represents that its Board of Directors, at a meeting
duly called and held and acting on the unanimous recommendation of a special
committee of the Board of Directors of the Company comprised of all of the
members of the Board of Directors other than Messrs. Bond, Chalsty, Leman and
Peterson (the "SPECIAL COMMITTEE"), has with Messrs. Bond, Leman and Peterson
abstaining (i) unanimously determined that this Agreement and the transactions
contemplated hereby, including the Merger, are fair to and in the best interest
of the Company's stockholders, (ii) unanimously approved this Agreement and the
transactions contemplated hereby, including the Merger and the Voting Agreement,
which approval satisfies in full the requirements of Section 203 of the General
Corporation Law of the State of Delaware (the "DELAWARE LAW") with respect to
the transactions contemplated hereby, and (iii) unanimously resolved to
recommend approval and adoption of this Agreement and the Merger to its
stockholders. The Company further represents that J.P. Morgan Securities Inc.
has delivered to the Company's Board of Directors its written opinion that the
consideration to be paid in the Merger is fair to the holders of shares of
common stock of the Company, par value $0.05 per share (each, a "SHARE"), from a
financial point of view. The Company has been advised that all of its directors
and executive officers intend to vote all of their Shares in favor of approval
and adoption of this Agreement and the Merger.

Section 2.2. CONVERSION OF SHARES. At the Effective Time:

(a) each Share held by the Company or any Subsidiary as treasury stock or
owned by Parent or any subsidiary of Parent immediately prior to the Effective
Time shall be canceled, and no payment shall be made with respect thereto;

(b) each share of common stock, par value $0.05 per share, of Merger Co.
("MERGER CO. COMMON STOCK") outstanding immediately prior to the Effective Time
shall be converted into and become one share of common stock, par value $0.05
per share ("SURVIVING CORPORATION COMMON STOCK"), of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted; and

(c) each Share outstanding immediately prior to the Effective Time shall,
except as otherwise provided in Section 2.02(a) or as provided in Section 2.04
with respect to Shares as to which appraisal rights have been exercised, be
converted into the right to receive in cash from Merger Co. an amount equal to
$22.25 (the "MERGER CONSIDERATION").

Section 2.3. SURRENDER AND PAYMENT. (a) Prior to the mailing of the
Company Proxy Statement (as defined in Section 4.09), Parent shall appoint an
agent (the "EXCHANGE AGENT") for the purpose of exchanging certificates
representing Shares for the Merger Consideration. Parent shall cause Merger Co.
to make available to the Exchange Agent, as soon as reasonably practicable as of
or after the Effective Time, the Merger Consideration to be paid in respect of
the Shares. For purposes of determining the Merger Consideration to be made
available, Parent shall assume that no holder of Shares will perfect appraisal
rights with respect to such Shares. Promptly after the Effective Time, the
Surviving Corporation will send, or will cause the Exchange Agent to send, to
each holder of Shares at the Effective Time a letter of transmittal for use in
such exchange (which shall specify that the delivery

A-3
<PAGE>
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates representing Shares to the Exchange Agent).

(b) Each holder of Shares that have been converted into a right to receive
the Merger Consideration, upon surrender to the Exchange Agent of a certificate
or certificates representing such Shares, together with a properly completed
letter of transmittal covering such Shares, will be entitled to receive the
Merger Consideration payable in respect of such Shares. Until so surrendered,
each such certificate shall, after the Effective Time, represent for all
purposes, only the right to receive such Merger Consideration. No interest will
be paid or will accrue on the Merger Consideration.

(c) If any portion of the Merger Consideration is to be paid to a Person
other than the registered holder of the Shares represented by the certificate or
certificates surrendered in exchange therefor, it shall be a condition to such
payment that the certificate or certificates so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Exchange Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such Shares or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable. For purposes of this Agreement,
"PERSON" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.

(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 2.

(e) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 2.03(a) that remains unclaimed by the holders of
Shares six months after the Effective Time shall be returned to the Surviving
Corporation, upon demand, and any such holder who has not exchanged his Shares
for the Merger Consideration in accordance with this Section prior to that time
shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration in respect of his Shares. Notwithstanding the foregoing,
the Surviving Corporation shall not be liable to any holder of Shares for any
amount paid to a public official pursuant to applicable abandoned property laws.
Any amounts remaining unclaimed by holders of Shares two years after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become property of any governmental
entity) shall, to the extent permitted by applicable law, become the property of
the Surviving Corporation free and clear of any claims or interest of any Person
previously entitled thereto.

(f) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 2.03(a) to pay for Shares for which appraisal rights
have been perfected shall be returned to the Surviving Corporation, upon demand.

Section 2.4. DISSENTING SHARES. Notwithstanding Section 2.02, Shares which
are issued and outstanding immediately prior to the Effective Time and which are
held by a holder who has not voted such Shares in favor of the Merger, who shall
have delivered a written demand for appraisal of such Shares in the manner
provided by the Delaware Law and who, as of the Effective Time, shall not have
effectively withdrawn or lost such right to appraisal ("DISSENTING SHARES")
shall not be converted into a right to receive the Merger Consideration. The
holders thereof shall be entitled only to such rights as are granted by
Section 262 of the Delaware Law. Each holder of Dissenting Shares who becomes
entitled to payment for such Shares pursuant to Section 262 of the Delaware Law
shall receive payment therefor from the Surviving Corporation in accordance with
the Delaware Law; PROVIDED, HOWEVER, that (i) if any such holder of Dissenting
Shares shall have failed to establish his entitlement to appraisal rights as
provided in Section 262 of the Delaware Law, (ii) if any such holder of
Dissenting

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Shares shall have effectively withdrawn his demand for appraisal of such Shares
or lost his right to appraisal and payment for his Shares under Section 262 of
the Delaware Law or (iii) if neither any holder of Dissenting Shares nor the
Surviving Corporation shall have filed a petition demanding a determination of
the value of all Dissenting Shares within the time provided in Section 262 of
the Delaware Law, such holder shall forfeit the right to appraisal of such
Shares and each such Share shall be treated as if it had been converted, as of
the Effective Time, into a right to receive the Merger Consideration, without
interest thereon, from the Surviving Corporation as provided in Section 2.02
hereof. The Company shall give Parent prompt notice of any demands received by
the Company for appraisal of Shares, and Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.

Section 2.5. STOCK OPTIONS. (a) At or immediately prior to the Effective
Time, each outstanding employee and director stock option to purchase Shares
(each an "OPTION") granted under any employee stock option or compensation plan
or arrangement of the Company shall be canceled, and each holder of any such
Option, whether or not then vested or exercisable, shall be paid, subject to any
required withholding of taxes, by the Surviving Corporation promptly after the
Effective Time for each such Option an amount determined by multiplying (i) the
excess, if any, of $22.25 per Share over the applicable exercise price of such
Option by (ii) the number of Shares such holder could have purchased (assuming
full vesting of all Options) had such holder exercised such Option in full
immediately prior to the Effective Time. Notwithstanding the foregoing, the
parties hereto may agree prior to the Effective Time that all or a portion of
the Options shall not be canceled as provided in the previous sentence, but
shall be converted into options to purchase stock of the Surviving Corporation
in compliance with the requirements of Section 424 of the Code and the
regulations thereunder.

(b) Prior to the Effective Time, the Company shall take all actions
necessary (to the extent permitted) to accomplish the transactions described in
Section 2.05(a), including, to the extent necessary, making any amendments to
the terms of any such employee stock option or compensation plan or arrangement
of the Company.

Section 2.6. WITHHOLDING RIGHTS. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to this Article 2 such amount as it is required
to deduct and withhold with respect to the making of such payment under any
provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which the Surviving Corporation or Parent
made such deduction and withholding.

ARTICLE 3
THE SURVIVING CORPORATION

Section 3.1. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.

Section 3.2. BYLAWS. The bylaws of Parent in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until amended in accordance
with applicable law.

Section 3.3. DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (a) the directors of Merger Co. at the Effective Time shall be
the directors of the Surviving Corporation, and (b) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.

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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent as of the date hereof and as
of the Effective Time that:

Section 4.1. CORPORATE EXISTENCE AND POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business, assets, liabilities or results of operations
of the Company and the Subsidiaries taken as a whole ("MATERIAL ADVERSE
EFFECT"). The Company has heretofore delivered to Parent true and complete
copies of the Company's certificate of incorporation and bylaws as currently in
effect.

Section 4.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the approval by the Company's stockholders by a majority
vote in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate and stockholder action under the Company's
constituent documents and the Delaware Law. This Agreement constitutes a valid
and binding agreement of the Company.

Section 4.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger in accordance with Delaware Law; (b) compliance with any
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR ACT"); and (c) compliance with any applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "EXCHANGE ACT").

Section 4.4. NON-CONTRAVENTION. Except as set forth in Schedule 4.04, the
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not and
will not (a) contravene or conflict with the certificate of incorporation or
bylaws of the Company, (b) assuming compliance with the matters referred to in
Section 4.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, writ, injunction, order or decree of
any court or governmental authority binding upon or applicable to the Company or
any Subsidiary or any of their properties or assets, (c) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or any Subsidiary or to a loss of any
benefit to which the Company or any Subsidiary is entitled under any provision
of any agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, franchise, permit or other similar authorization held
by the Company or any Subsidiary, or (d) result in the creation or imposition of
any Lien on any asset of the Company or any Subsidiary, except in the case of
clauses 4.04(b), 4.04(c) and 4.04(d) for any such violation, failure to obtain
any such consent or other action, default, right, loss or Lien that would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. For purposes of this Agreement, "LIEN" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.

Section 4.5. CAPITALIZATION. The authorized capital stock of the Company
consists of 200,000,000 shares of common stock, par value $.05 per share (the
"COMMON STOCK") and 25,000,000 shares of preferred stock, par value $1.00 per
share (the "PREFERRED STOCK"). As of the close of business on

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September 28, 2000, there were outstanding 105,575,778 shares of Common Stock
and no shares of Preferred Stock. As of the close of business on September 22,
2000, there were outstanding stock options to purchase an aggregate of 4,986,039
Shares (of which options to purchase an aggregate of 2,541,525 Shares were
exercisable). All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as set forth in Schedule 4.05 and this Section and except for changes since
September 29, 2000 resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (a) no shares of capital stock
or other voting securities of the Company, (b) no securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, and (c) no options or other rights to acquire from
the Company or any Subsidiary, and no obligation of the Company or any
Subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company (the items in clauses 4.05(a), 4.05(b) and 4.05(c) being referred to
collectively as the "COMPANY SECURITIES"). There are no outstanding obligations
of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any
Company Securities.

Section 4.6. SUBSIDIARIES. (a) Each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. For purposes of this Agreement,
"SUBSIDIARY" means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly or
indirectly owned by the Company and/or one or more Subsidiaries. All
Subsidiaries and their respective jurisdictions of incorporation are identified
in Schedule 4.06.

(b) Except as set forth in Schedule 4.06, all of the outstanding capital
stock of, or other ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities of the Company or any Subsidiary
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary, and (ii) options or other
rights to acquire from the Company or any Subsidiary, and no other obligation of
the Company or any Subsidiary to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or exchangeable
for any capital stock, voting securities or ownership interests in, any
Subsidiary (the items in clauses 4.06(b)(i) and 4.06(b)(ii) being referred to
collectively as the "SUBSIDIARY SECURITIES"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any outstanding Subsidiary Securities.

Section 4.7. SEC FILINGS. (a) The Company has delivered to Parent (i) the
Company's annual report on Form 10-K for the year ended December 25, 1999 (the
"COMPANY 10-K"), (ii) its quarterly report on Form 10-Q for its fiscal quarter
ended June 24, 2000 and its quarterly report on Form 10-Q for its fiscal quarter
ended March 25, 2000 (together, the "COMPANY 10-QS"), (iii) its proxy or
information statements relating to meetings of, or actions taken without a
meeting by, the stockholders of the Company held since January 1, 1998, and
(iv) all of its other reports, statements, schedules and registration statements
filed with the Securities and Exchange Commission (the "SEC") since January 1,
1998.

(b) As of its filing date, each such report or statement filed pursuant to
the Exchange Act did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to

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make the statements made therein, in the light of the circumstances under which
they were made, not misleading.

(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act of 1933, as amended, as of the
date such statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.

Section 4.8. FINANCIAL STATEMENTS. The audited consolidated financial
statements of the Company included in the Company 10-K and the unaudited
consolidated financial statements of the Company included in the Company 10-Qs
each fairly present, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then ended (subject
to normal year-end adjustments in the case of any unaudited interim financial
statements). For purposes of this Agreement, "BALANCE SHEET" means the
consolidated balance sheet of the Company as of December 25, 1999 set forth in
the Company 10-K and "BALANCE SHEET DATE" means December 25, 1999.

Section 4.9. DISCLOSURE DOCUMENTS. (a) Each document required to be filed
by the Company with the SEC in connection with the transactions contemplated by
this Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including, without
limitation, the proxy or information statement of the Company containing
information required by Regulation 14A under the Exchange Act and, if
applicable, Rule 13e-3 and Schedule 13E-3 under the Exchange Act (the "COMPANY
PROXY STATEMENT"), if any, to be filed with the SEC in connection with the
Merger and any amendments or supplements thereto will, when filed, comply as to
form in all material respects with the applicable requirements of the Exchange
Act except that no representation or warranty is made hereby with respect to any
information furnished to the Company by Parent in writing specifically for
inclusion in the Company Disclosure Documents.

(b) At the time the Company Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, at the time such
stockholders vote on adoption of this Agreement and at the Effective Time, the
Company Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy Statement
and at the time of any distribution thereof, such Company Disclosure Document
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 4.09(b) will not apply
to statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by Parent specifically for
use therein.

(c) The information with respect to the Company or any Subsidiary that the
Company furnishes in writing to Parent specifically for use in the Parent
Disclosure Documents (as defined in Section 7.01) will not, at the time of the
filing thereof, at the time of any distribution thereof and at the time of the
meeting of the Company's stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

Section 4.10. ABSENCE OF CERTAIN CHANGES. Except as set forth in
Schedule 4.10 hereto, the Company 10-K or the Company 10-Qs, since the Balance
Sheet Date, the Company and the

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Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:

(a) any event, occurrence or development of a state of circumstances or
facts which has had or reasonably could be expected to have a Material Adverse
Effect;

(b) other than regular quarterly dividends in an amount not in excess of
$.025 per share per quarter, any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock of
the Company, or any repurchase, redemption or other acquisition by the Company
or any Subsidiary of any outstanding shares of capital stock or other securities
of, or other ownership interests in, the Company or any Subsidiary;

(c) any amendment of any material term of any outstanding security of the
Company or any Subsidiary that could reasonably be expected to be materially
adverse to the Company;

(d) any incurrence, assumption or guarantee by the Company or any Subsidiary
of any indebtedness for borrowed money other than in the ordinary course of
business and in amounts and on terms consistent with past practices;

(e) any creation or assumption by the Company or any Subsidiary of any
material Lien on any material asset other than in the ordinary course of
business consistent with past practices;

(f) any making of any material loan, advance or capital contributions to or
investment in any Person other than loans, advances or capital contributions to
or investments in wholly-owned Subsidiaries made in the ordinary course of
business consistent with past practices;

(g) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the business or assets of the Company or any Subsidiary
which, individually or in the aggregate, has had or would reasonably be expected
to have a Material Adverse Effect;

(h) any transaction or commitment made, or any contract or agreement entered
into, by the Company or any Subsidiary relating to its assets or business
(including the acquisition or disposition of any assets) or any relinquishment
by the Company or any Subsidiary of any contract or other right, in either case,
that has had or would reasonably be expected to have a Material Adverse Affect,
other than transactions and commitments in the ordinary course of business
consistent with past practice and those contemplated by this Agreement;

(i) any change in any method of accounting or accounting practice by the
Company or any Subsidiary, except for any such change required by reason of a
concurrent change in generally accepted accounting principles;

(j) any (i) grant of any severance or termination pay to any director or
executive officer of the Company or any Subsidiary, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director or executive officer of the
Company or any Subsidiary, (iii) material increase in benefits payable under any
existing severance or termination pay policies or employment agreements or (iv)
increase in compensation, bonus or other benefits payable to directors, officers
or employees of the Company or any Subsidiary, other than in the case of clauses
(iii) and (iv) in the ordinary course of business consistent with past practice;

(k) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of the Company or any Subsidiary, which employees were not subject
to a collective bargaining agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to such
employees which have had or could reasonably be expected to have a Material
Adverse Effect; or

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(l) any cancellation of any licenses, sublicenses, franchises, permits or
agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could be
expected to have a Material Adverse Effect.

Section 4.11. NO UNDISCLOSED MATERIAL LIABILITIES. Except as set forth in
Schedule 4.11, the Company 10-K or the Company 1O-Qs, there are no liabilities
of the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than:

(a) liabilities disclosed or provided for in the Balance Sheet;

(b) liabilities incurred in the ordinary course of business consistent with
past practice since the Balance Sheet Date or as otherwise specifically
contemplated by this Agreement;

(d) other liabilities which individually or in the aggregate do not and
could not reasonably be expected to have a Material Adverse Effect.

Section 4.12. LITIGATION. Except as set forth in Schedule 4.12, the
Company 10-K or the Company 10-Qs, there is no action, suit, investigation or
proceeding (or any basis therefor) pending against, or to the knowledge of the
Company threatened against or affecting, the Company or any Subsidiary or any of
their respective properties before any court or arbitrator or any governmental
body, agency or official which could reasonably be expected to have a Material
Adverse Effect, or which as of the date hereof in any manner challenges or seeks
to prevent enjoin, alter or materially delay the Merger or any of the other
transactions contemplated hereby.

Section 4.13. TAXES. (a) Except as set forth in Schedule 4.13 or as would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:

(i) all tax returns, statements, reports and forms (including estimated
tax returns and reports and information returns and reports) required to be
filed with any taxing authority with respect to any tax period (or portion
thereof) ending on or before the Effective Time (a) "PRE-CLOSING TAX
PERIOD") by or on behalf of the Company or any Subsidiary of the Company
(collectively, the "RETURNS"), were filed when due (including any applicable
extension periods) in accordance with all applicable laws; as of the time of
filing, the Returns were true and complete in all material respects;

(ii) the Company and its Subsidiaries have timely paid, or withheld and
remitted to the appropriate taxing authority, all taxes shown as due and
payable on the Returns that have been filed;

(iii) the charges, accruals and reserves for taxes with respect to the
Company and any Subsidiary for any Pre-Closing Tax Period (including any
Pre-Closing Tax Period for which no Return has yet been filed) reflected on
the Balance Sheet (excluding any provision for deferred income taxes) are
adequate to cover such taxes as of the Balance Sheet Date;

(iv) there is no claim (including under any indemnification or
tax-sharing agreement), audit, action, suit, proceeding, or investigation
now pending or threatened in writing against or in respect of any tax or
"tax asset" of the Company or any Subsidiary. For purposes of this
Section 4.13, the term "TAX ASSET" shall include any net operating loss, net
capital loss, investment tax credit, foreign tax credit, charitable
deduction or any other credit or tax attribute which could be carried
forward or back to reduce taxes;

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(v) there are no Liens for taxes upon the assets of the Company or its
Subsidiaries except for Liens for current taxes not yet due; and

(vi) neither the Company nor any Subsidiary is currently under any
obligation to pay any amounts of the type described in clause (ii) or
(iii) of the definition of "tax", regardless of whether such tax is imposed
on the Company or any Subsidiary.

(b) For purposes of this Section 4.13, "tax" means (i) any tax, governmental
fee or other like assessment or charge of any kind whatsoever (including, but
not limited to, withholding on amounts paid to or by any Person), together with
any interest, penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax (domestic
or foreign), (ii) in the case of the Company or any Subsidiary, liability for
the payment of any amount of the type described in clause (i) as a result of
being or having been before the Effective Time a member of an affiliated,
consolidated, combined or unitary group (other than such a group of which the
Company or any of its Subsidiaries is the common parent), or a party to any
agreement or arrangement, as a result of which liability of the Company or any
Subsidiary to a taxing authority is determined or taken into account with
reference to the liability of any other Person, and (iii) liability of the
Company or any Subsidiary for the payment of any amount as a result of being
party to any tax sharing agreement or with respect to the payment of any amount
of the type described in (i) or (ii) as a result of any existing express
obligation (including, but not limited to, an indemnification obligation).

Section 4.14. ERISA. (a) Schedule 4.14 contains a correct and complete
list identifying each material "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
each employment, severance or similar contract, plan, arrangement or policy and
each other plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
(including any self-insured arrangements), health or medical benefits, employee
assistance program, disability or sick leave benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension, health, medical or life
insurance benefits) which is maintained, administered or contributed to by the
Company or any Subsidiary and covers any employee or former employee of the
Company or any Subsidiary, or with respect to which the Company or any
Subsidiary has any liability with respect to any employee or former employee of
the Company or any Subsidiary (other than any such plan, contract, policy or
arrangement that is an International Plan, as defined below). Copies of such
plans (and, if applicable, related trust or funding agreements or insurance
policies) and all amendments thereto and written interpretations thereof have
been made available to Parent together with the most recent annual report
(Form 5500 including, if applicable, Schedule B thereto) and tax return
(Form 990) prepared in connection with any such plan or trust. Such plans are
referred to collectively herein as the "EMPLOYEE PLANS". For purposes of this
Section 4.14, "ERISA AFFILIATE" of any Person means any other Person which,
together with such Person, would be treated as a single employer under
Section 414 of the Internal Revenue Code of 1986, as amended (the "CODE").

(b) Schedule 4.14 separately identifies each Employee Plan that is subject
to Title IV of ERISA (other than a Multiemployer Plan, as defined below) (a
"TITLE IV PLAN"). Schedule 4.14 separately identifies each Employee Plan which
is a multiemployer plan, as defined in Section 3(37) of ERISA (a) "MULTIEMPLOYER
PLAN"). Except as would not reasonably be expected to have a Material Adverse
Affect, if a "complete withdrawal" by Seller and all of its ERISA Affiliates
were to occur as of the Closing Date with respect to all Multiemployer Plans, to
the knowledge of the Company, none of the Company, any Subsidiary or any of
their ERISA Affiliates would incur any withdrawal liability under Title IV of
ERISA.

(c) A current favorable Internal Revenue Service determination letter is in
effect with respect to each Employee Plan which is intended to be qualified
under Section 401(a) of the Code (or the

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relevant remedial amendment period has not expired with respect to such Employee
Plan), and the Company knows of no circumstance giving rise to a material
likelihood that such letter could be revoked by the Internal Revenue Service.
The Company has made available to Parent copies of the most recent Internal
Revenue Service determination letters with respect to each such Plan. Each
Employee Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Plan, other than any non-compliance which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. No events
have occurred with respect to any Employee Plan that would reasonably be
expected to result in payment or assessment of any material excise taxes under
Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code,
other than any excise taxes which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

(d) The consummation of the transactions contemplated by this Agreement will
not (either alone or together with any termination of employment) entitle any
employee or independent contractor of the Company or any Subsidiary to severance
pay or accelerate the time of payment or vesting or trigger any payment of
funding (through a grantor trust or otherwise) of material compensation or
benefits under, materially increase the amount payable or trigger any other
material obligation pursuant to, any Employee Plan.

(e) Neither the Company nor any Subsidiary has any liability in respect of
post-retirement health, medical or life insurance benefits for retired, former
or current employees of the Company or its Subsidiaries except for coverage
under Section 4980B of the Code or coverage the full cost of which is paid for
by the retired, former or current employee.

(f) There has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its Affiliates relating to, or
change in employee participation or coverage under, an Employee Plan which would
increase the expense of maintaining such Employee Plan above the level of the
expense incurred in respect thereof for the fiscal year ended December 25, 1999,
except for any such increase which would not reasonably be expected to have a
Material Adverse Effect.

(g) Neither the Company nor any Subsidiary is a party to or subject to, or
is currently negotiating in connection with entering into, any collective
bargaining agreement or other contract or understanding with a labor union or
labor organization.

(h) Except for any failures which would not be reasonably expected to have a
Material Adverse Effect, all contributions and payments accrued under each
Employee Plan, determined in accordance with prior funding and accrual
practices, as adjusted to include proportional accruals for the period ending as
of the date hereof, have been discharged and paid on or prior to the date hereof
except to the extent reflected as a liability on the Balance Sheet.

(i) Schedule 4.14(i) identifies each International Plan (as defined below)
covering 100 employees or more. The Company has furnished to Parent copies of
each International Plan. Each International Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations (including any special
provisions relating to qualified plans where such Plan was intended to so
qualify) and has been maintained in good standing with applicable regulatory
authorities, other than any non-compliance which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
There has been no amendment to, written interpretation of or announcement
(whether or not written) by the Company or any Subsidiary relating to, or change
in employee participation or coverage under, any International Plan that would
increase the expense of maintaining such International Plan above the level of
expense incurred in respect thereof for the most recent fiscal year ended prior
to the date hereof, except for any such increase which would not reasonably be
expected to have a Material Adverse Effect. For

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purposes of this Section, "INTERNATIONAL PLAN" means any employment, severance
or similar contract or arrangement (whether or not written) or any plan, policy,
fund, program or arrangement or contract providing for severance, insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
pension or retirement benefits or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits that (i) is
intended primarily for the benefit of employees or beneficiaries based outside
the U.S., (ii) is entered into, maintained, administered or contributed to by
the Company or any Subsidiary and (iii) covers any employee or former employee
of the Company or any Subsidiary.

Section 4.15. LABOR MATTERS. Except as set forth in Schedule 4.15 and
except for such matters as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there are no
(i) labor strikes, disputes, slowdowns, representation or certification
campaigns or work stoppages or other concerted activities with respect to
employees of any of the Company or any Subsidiary pending, or to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary,
(ii) grievance or arbitration proceedings, decisions, side letters, letter
agreements, letters of understanding or settlement agreements arising out of
collective bargaining agreements to which the Company or any Subsidiary is a
party, (iii) unfair labor practice complaints pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary, or
(iv) activities or proceedings of any labor union or employee association to
organize any such employees.

(b) Except to the extent set forth in Schedule 4.15 and except for such
matters as would not, individually or in the aggregate, have a Material Adverse
Effect, the Company and its Subsidiaries are in compliance with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours.

(c) Except to the extent set forth in Schedule 4.15 and except for such
matters as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, there are no pending administrative matters
with any federal, provincial, state or local agencies regarding (i) violations
or alleged violations of any federal, provincial, state or local wage and hour
law or any federal, provincial, state or local law with respect to
discrimination on the basis of race, color, creed, national origin, religion or
any other basis under such federal, provincial, state or local law, (ii) any
claimed violation of Title VII of the 1964 Civil Rights Act, as amended,
(iii) any allegation or claim arising out of Executive Order 11246 or any other
applicable order relating to governmental contractors or state contractors, or
(iv) any violation or alleged violation of the Age Discrimination and Employment
Act, as amended, or any other federal, provincial, state or local statute or
ordinance, or any other applicable laws with respect to wages, hours, employment
practices and terms and conditions of employment.

Section 4.16. COMPLIANCE WITH LAWS. Except to the extent set forth in
Schedules 4.11, 4.12 and 4.19, neither the Company nor any Subsidiary is in
violation of, or has since January 1, 1999 violated, and to the knowledge of the
Company none is under investigation with respect to or has been threatened to be
charged with or given notice of any violation of, any applicable law, rule,
regulation, judgment, injunction, order or decree, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

Section 4.17. LICENSES AND PERMITS. Except as set forth on Schedule 4.17
and except where the failure of the following to be true would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (i) the Company or its Subsidiaries own, hold or possess adequate right
to use all material licenses, franchises, permits, certificates, approvals or
other similar authorizations affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries (the "PERMITS") required in
connection with the operation of the business of the Company and its
Subsidiaries, (ii) the Permits are valid and in full force and effect,
(iii) neither the Company nor

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any Subsidiary is in default under, and no condition exists that with notice or
lapse of time or both would constitute a default under, the Permits and
(iv) none of the Permits will be terminated or impaired or become terminable, in
whole or in part, as a result of the transactions contemplated hereby.

Section 4.18. INTELLECTUAL PROPERTY. Except as set forth in
Schedule 4.18, the Company and the Subsidiaries own or possess adequate licenses
or other rights to use all Intellectual Property Rights necessary to conduct the
business now operated by them, except where the failure to own or possess such
licenses or rights has not had and would not be reasonably likely to have a
Material Adverse Effect and, to the knowledge of the Company, the Intellectual
Property Rights of the Company and the Subsidiaries do not conflict with or
infringe upon any Intellectual Property Rights of others to the extent that, if
sustained, such conflict or infringement has had and would be reasonably likely
to have a Material Adverse Effect. For purposes of this Agreement, AINTELLECTUAL
PROPERTY RIGHT' means any trademark, service mark, trade name, mask work,
copyright, patent, software license, other data base, invention, trade secret,
know-how (including any registrations or applications for registration of any of
the foregoing) or any other similar type of proprietary intellectual property
right.

Section 4.19. ENVIRONMENTAL MATTERS. (a) Except for such matters,
individually or in the aggregate, as would not be reasonably expected to have a
Material Adverse Effect or as set forth in Schedule 4.19, the Company 10-K or
the Company 10-Qs:

(i) no notice, notification, demand, request for information, citation,
summons or order has been received, no complaint has been filed, no penalty
has been assessed, and no investigation, action, claim, suit, proceeding or
review (or any basis therefor) is pending or, to the knowledge of the
Company or any Subsidiary, is threatened by any governmental entity or other
Person with respect to any matters relating to the Company or any Subsidiary
and relating to or arising out of any Environmental Law;

(ii) there are no liabilities of or relating to the Company or any
Subsidiary of any kind whatsoever whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or relating to any
Environmental Law, and there are no facts, conditions, situations or set of
circumstances that could reasonably be expected to result in or be the basis
for any such liability;

(iii) the Company and its Subsidiaries are and have been in compliance
with all Environmental Laws and have obtained and are in compliance with all
Environmental Permits; and

(iv) no Hazardous Substance has been discharged, disposed of, dumped,
injected, pumped, deposited, spilled, leaked, emitted or released at any
property now or previously owned, leased or operated by the Company or any
Subsidiary.

For purposes of this Section 4.19(a), the "COMPANY" and "SUBSIDIARY" shall
include any entity which is, in whole or in part, a predecessor of the Company
or any Subsidiary.

(b) Since January 1, 1997, except as set forth in Schedule 4.19, there has
been no written environmental investigation, study, audit, test, review or other
analysis conducted of which the Company has knowledge in relation to the current
or prior business of the Company or any Subsidiary or any property or facility
now or previously owned, leased or operated by the Company or any Subsidiary
which has not been delivered (to the extent the Company has possession thereof)
to Parent at least five days prior to the date hereof.

(c) Except as set forth in Schedule 4.19, neither the Company nor any
Subsidiary owns, leases or operates or has owned, leased or operated any real
property, or conducts or has since January 1, 1997 conducted any operations, in
New Jersey or Connecticut.

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(d) For purposes of this Section 4.19, the following terms shall have the
meanings set forth below:

"ENVIRONMENTAL LAWS" means any federal, state, provincial, local and foreign
law (including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or requirement or any agreement or contract with any governmental
authority or other third party, relating to human health and safety, the
environment or to pollutants, contaminants, wastes or chemicals or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous substances,
wastes or materials.

"ENVIRONMENTAL PERMITS" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting the
business of the Company or any of its Subsidiaries as currently conducted.

"HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or chemical
or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous
substance, waste or material, or any substance, waste or material having any
constituent elements displaying of the foregoing characteristics, including,
without limitation, petroleum, its derivatives, by-products and other
hydrocarbons, which in any event is regulated under Environmental Laws.

Section 4.20. FINDERS' FEES. Except for J.P. Morgan Securities Inc., a
copy of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of the Company or any Subsidiary who might
be entitled to any fee or commission from Parent or any of its affiliates upon
consummation of the transactions contemplated by this Agreement.

Section 4.21. INAPPLICABILITY OF CERTAIN RESTRICTIONS. The Company has
taken all action necessary to exempt the Merger, this Agreement, and the
transactions contemplated hereby from Section 203 of the Delaware Law. Except to
the extent otherwise provided in the condition set forth in Section 9.03(c), the
adoption of this Agreement by the affirmative vote of the holders of Shares
entitling such holders to exercise at least a majority of the voting power of
the Shares is the only vote of holders of any class or series of the capital
stock of the Company required to adopt this Agreement, or to approve the Merger
or any of the other transactions contemplated hereby and no higher or additional
vote is required pursuant to the Company's Certificate of Incorporation or
otherwise.

Section 4.22. RIGHTS PLAN. The Company has not entered into, and its Board
of Directors has not adopted or authorized the adoption of, a shareholder rights
or similar agreement.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to the Company as of the date hereof and as
of the Effective Time that:

Section 5.1. CORPORATE EXISTENCE AND POWER. Each of Parent and Merger Co.
is a corporation duly incorporated, validly existing and in good standing under
the laws of Delaware and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. Since the date of its incorporation, neither Parent
nor Merger Co. has engaged in any activities other than in connection with or as
contemplated by this Agreement or in connection with arranging any financing
required to consummate the transactions contemplated hereby.

Section 5.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Co. of this Agreement and the consummation by
Parent and Merger Co. of the transactions contemplated hereby are within the
corporate powers of Parent and Merger Co. and have been duly authorized by all
necessary corporate and stockholder action. This Agreement constitutes a valid
and binding agreement of each of Parent and Merger Co..

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Section 5.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Co. of this Agreement and the consummation by
Parent and Merger Co. of the transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (a) the filing of a certificate of merger in
accordance with Delaware Law, (b) compliance with any applicable requirements of
the HSR Act; and (c) compliance with any applicable requirements of the Exchange
Act.

Section 5.4. NON-CONTRAVENTION. The execution, delivery and performance by
Parent and Merger Co. of this Agreement and the consummation by Parent and
Merger Co. of the transactions contemplated hereby do not and will not
(a) contravene or conflict with the certificate of incorporation or bylaws of
Parent or Merger Co., (b) assuming compliance with the matters referred to in
Section 5.03, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon Parent or Merger Co., or (c) constitute a
default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Parent or Merger Co. or to a loss of
any benefit to which Parent or Merger Co. is entitled under any agreement,
contract or other instrument binding upon Parent or Merger Co..

Section 5.5. DISCLOSURE DOCUMENTS. (a) The information with respect to
Parent and its subsidiaries that Parent furnishes to the Company in writing
specifically for use in any Company Disclosure Document will not contain, any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, at the time the
stockholders vote on adoption of this Agreement and at the Effective Time, and
(ii) in the case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof and at the time of any distribution
thereof.

(b) The Parent Disclosure Documents, when filed, will comply as to form in
all material respects with the applicable requirements of the Exchange Act and
will not at the time of the filing thereof, at the time of any distribution
thereof or at the time of the meeting of the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading, PROVIDED, that this representation and
warranty will not apply to statements or omissions in the Parent Disclosure
Documents based upon information furnished to Parent in writing by the Company
specifically for use therein.

Section 5.6. FINDERS' FEES. Except for Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC"), whose fees will be paid by Parent, there is no
investment banker, broker, finder or other intermediary who might be entitled to
any fee or commission from the Company or any of its affiliates upon
consummation of the transactions contemplated by this Agreement.

Section 5.7. FINANCING. The Company has received copies of (a) a
commitment letter dated October 1, 2000 from DLJMB and certain of its affiliated
funds and entities, and certain other Persons pursuant to which each of the
foregoing has committed, subject to the terms and conditions set forth therein,
to purchase equity securities and debt securities of Parent for an aggregate
amount equal to $1,194.2 million, (b) a letter dated October 1, 2000 from DLJ
Bridge Finance Inc. ("DLJ BRIDGE FUND") pursuant to which DLJ Bridge Fund has
committed, subject to the terms and conditions set forth therein, to purchase
senior unsecured bridge notes of Merger Co. in the aggregate principal amount of
up to $500.0 million and senior subordinated bridge notes of Merger Co. in the
aggregate principal amount of up to $400.0 million, and (c) a letter dated
October 1, 2000 from DLJ Capital Funding, Inc. ("DLJ SENIOR DEBT FUND") pursuant
to which DLJ Senior Debt Fund has committed, subject to the terms and conditions
set forth therein, to enter into one or more credit agreements providing for
senior terms loans to Merger Co. of up to an aggregate of $1,150.0 million and
senior

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revolving loans of up to $500.0 million. As used in this Agreement, the
aforementioned entities shall hereinafter be referred to as the "FINANCING
ENTITIES," the commitments referred to above shall be referred to as the
"FINANCING AGREEMENTS" and the financing to be provided thereunder shall be
referred to as the "FINANCING." The aggregate proceeds of the Financing are in
an amount sufficient to consummate the transactions contemplated hereby,
including, without limitation, to pay the Merger Consideration, to repay certain
existing indebtedness of the Company and its Subsidiaries, together with any
interest, premium or penalties payable in connection therewith, but excluding
the 7.95% senior notes due 2010, the 7.45% senior notes due 2007, the 6.125%
senior notes due 2006, and the 7.125% senior notes due 2026 and certain existing
capital leases, to provide a reasonable amount of working capital financing and
to pay related fees and expenses (such amounts, the "REQUIRED AMOUNTS"). As of
the date hereof, none of the letters relating to the Financing referred to above
has been withdrawn and Parent does not know of any facts or circumstances that
may reasonably be expected to result in any of the conditions set forth in the
letters relating to the Financing not being satisfied. Parent believes that the
Financing will not create any liability to the directors and stockholders of the
Company under any federal or state fraudulent conveyance or transfer law. Parent
further believes that, upon the consummation of the transactions contemplated
hereby, including, without limitation, the Financing, (i) the Surviving
Corporation (A) will not be insolvent, (B) will not be left with unreasonably
small capital and (C) will not have incurred debts beyond its ability to pay
such debts as they mature, and (ii) the capital of the Company will not be
impaired.

Section 5.8. OWNERSHIP OF SHARES. (a) As of the date hereof, neither
Parent nor Merger Co. beneficially owns any Shares, other than pursuant to or as
a result of (i) the Voting Agreement and (ii) that certain letter agreement
dated as of the date hereof by and among DLJ Merchant Banking III, Inc. and the
Stockholders, substantially in the form furnished to Parent.

(b) As of the date hereof, the Stockholders do not beneficially own any
Shares except pursuant to, as a result of, or as disclosed in the Voting
Agreement (including the schedules thereto).

Section 5.9. OWNERSHIP OF PARENT STOCK. (a) As of the date of execution of
this Agreement, the proposed equity commitment of each proposed shareholder of
Parent as of the Effective Time is as set forth in Schedule 5.09(a).

(b) Except as set forth in Schedule 5.09(b), as of the date hereof, there
are no arrangements, understandings or agreements between any of Parent, Merger
Co., DLJMB or any of their affiliates on the one hand, and any directors,
officers or employees of the Company or any Subsidiary or any stockholder of the
Company on the other hand, relating to the transactions contemplated hereby.

ARTICLE 6
COVENANTS OF THE COMPANY

Section 6.1. CONDUCT OF THE COMPANY. From the date hereof until the
Effective Time, the Company and the Subsidiaries shall conduct their business in
the ordinary course consistent with past practice and shall use their reasonable
best efforts to preserve intact their business organizations and relationships
with third parties and to keep available the services of their present officers
and employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time and unless consented to in writing by Parent,
the Company will not and will cause its Subsidiaries not to:

(a) adopt or propose any change in its certificate of incorporation or
bylaws;

(b) except pursuant to existing agreements or arrangements, or as
specifically permitted by this Agreement:

(i) acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other business organization or division
thereof for an amount in excess of

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$20 million in the aggregate, or sell, lease or otherwise dispose of a
subsidiary or an amount of assets or securities for an amount in excess of
$125 million in the aggregate;

(ii) make any investment in an amount in excess of $20 million in the
aggregate whether by purchase of stock or securities, contributions to
capital or any property transfer, or purchase for an amount in excess of
$20 million in the aggregate, any property or assets of any other individual
or entity;

(iii) other than in the ordinary course of business consistent with past
practice, waive, release, grant, or transfer any rights of material value;

(iv) other than in the ordinary course of business consistent with past
practice, modify or change in any material respect any existing material
license, lease, contract, or other document;

(v) incur, assume or prepay an amount of long-term or short-term debt in
excess of $125 million in the aggregate (net of cash and marketable
securities);

(vi) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person (other than any Subsidiary) which, are in
excess of $10 million in the aggregate;

(vii) make any loans, advances or capital contributions to, or
investments in, any other person which are in excess of $20 million in the
aggregate; or

(viii) authorize any new capital expenditures which, individually or in
the aggregate, would cause total capital expenditures for the calendar year
2000 and the first quarter of calendar year 2001 to exceed $565 million.

(c) split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock except
regular quarterly dividends, other than cash dividends and distributions by a
wholly owned subsidiary of the Company to the Company or to a subsidiary all of
the capital stock which is owned directly or indirectly by the Company, or,
other than consistent with its past practice of acquiring Shares to meet its
obligation to reserve and issue Shares under any stock option or compensation
plan or arrangement of the Company, redeem, repurchase or otherwise acquire or
offer to redeem, repurchase, or otherwise acquire any of its securities or any
securities of its Subsidiaries;

(d) except as specifically permitted by this Agreement, adopt or amend any
material bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the benefit
and welfare of any director, officer or employee, or (except for normal
increases in the ordinary course of business that are consistent with past
practices and that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company) increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or the
removal of existing restrictions in any benefit plans or agreements);

(e) except as set forth in Schedule 6.01, pay, discharge or satisfy any
material claims, liabilities or obligations (whether absolute, accrued, asserted
or unasserted, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary course of business, consistent with past practices,
of liabilities reflected or reserved against in the consolidated financial
statements of the Company or incurred in the ordinary course of business,
consistent with past practices;

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(f) other than in the ordinary course of business consistent with past
practice and except as set forth in Schedule 6.01, make or change any material
tax election or settle or compromise any material income tax liability;

(g) except as set forth in Schedule 6.01, approve any new labor agreements;

(h) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures;

(i) agree or commit to do any of the foregoing; or

(j) knowingly take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any material
respect at, or as of any time prior to, the Effective Time.

Section 6.2. STOCKHOLDER MEETING; PROXY MATERIAL. The Company shall cause
a meeting of its stockholders (the "COMPANY STOCKHOLDER MEETING") to be duly
called and held as soon as reasonably practicable for the purpose of voting on
the approval and adoption of this Agreement and the Merger. Subject to
Section 6.04, the Board of Directors of the Company shall recommend approval and
adoption of this Agreement and the Merger by the Company's stockholders and
shall not withdraw such recommendation. In connection with such meeting, the
Company (a) will promptly prepare and file with the SEC, will use its reasonable
best efforts to have cleared by the SEC and will thereafter mail to its
stockholders as promptly as practicable the Company Proxy Statement and all
other proxy materials for such meeting, (b) subject to Section 6.04, will use
its reasonable best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and
(c) will otherwise comply with all legal requirements applicable to such
meeting.

Section 6.3. ACCESS TO INFORMATION. From the date hereof until the
Effective Time, the Company will (a) give Parent and its counsel, financial
advisors, auditors and other authorized representatives (collectively, the
"REPRESENTATIVES") reasonable access during normal business hours to the
offices, properties, books and records of the Company and the Subsidiaries,
(b) provide the Representatives access to and the right to consult with
representatives of the Company handling any labor negotiations with any union
representing employees of the Company, (c) furnish to Parent and the
Representatives such financial and operating data and other information as such
Persons may reasonably request in order to complete the transactions
contemplated hereby and (d) instruct the Company's employees, counsel and
financial advisors to cooperate with Parent in its investigation of the business
of the Company and the Subsidiaries; PROVIDED that (i) any information provided
to Parent or the Representatives pursuant to this Section shall be subject to
the Confidentiality Agreement and (ii) Parent shall inform the Representatives
receiving such information of the terms of the Confidentiality Agreement and
shall be responsible for any breach by such Representatives of such
Confidentiality Agreement; and PROVIDED FURTHER that no investigation pursuant
to this Section shall affect any representation or warranty given by the Company
to Parent hereunder.

Section 6.4. OTHER OFFERS. (a) Neither the Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or Subsidiaries to (x) solicit, initiate or take any
action to facilitate or encourage the submission of inquiries, proposals or
offers from any Person (as defined below) (other than Parent) relating to any
Acquisition Proposal, or agree to or endorse any Acquisition Proposal,
(y) enter into or participate in any discussions or negotiations regarding any
Acquisition Proposal, or furnish to any Person any information with respect to
its business, properties or assets in connection with any Acquisition Proposal
or (z) grant any waiver or release under any standstill or similar agreement
with respect to any class of equity securities of the Company or any of its
Subsidiaries; PROVIDED, however, that the foregoing shall not prohibit the
Company (either directly or indirectly through advisors, agents

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or other intermediaries) from (i) furnishing information pursuant to a
confidentiality letter deemed appropriate by the Special Committee (a copy of
which shall be provided for informational purposes only to Parent) concerning
the Company and its businesses, properties or assets to a Person who in the
judgment of the Special Committee has made a bona fide Acquisition Proposal,
(ii) engaging in discussions or negotiations with such a Person who in the
judgment of the Special Committee has made a bona fide Acquisition Proposal,
(iii) following receipt of a bona fide Acquisition Proposal, taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a) under
the Exchange Act or otherwise making disclosure to its stockholders,
(iv) following receipt of an Acquisition Proposal, failing to make or
withdrawing or modifying its recommendation referred to in Section 6.02 and/or
(v) taking any non-appealable, final action ordered to be taken by the Company
by any court of competent jurisdiction but in each case referred to in the
foregoing clauses (i), (ii) and (iv) only if (i) the Company has complied with
the terms of this Section 6.04, (ii) the Company has received an unsolicited
Acquisition Proposal which the Board of Directors of the Company determines in
good faith is reasonably likely to result in a Superior Proposal, and (iii) the
Company shall have delivered to Parent a prior written notice advising Parent
that it intends to take such action. The Company will immediately cease and
cause its advisors, agents and other intermediaries to cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. For purposes of this
Section 6.04, the term "PERSON" means any person, corporation, entity or
"group," as defined in Section 13(d) of the Exchange Act, other than Parent or
any of its affiliates.

"ACQUISITION PROPOSAL" means any offer or proposal for a merger,
reorganization, consolidation, share exchange, business combination or other
similar transaction involving the Company or any of its Subsidiaries or any
proposal or offer to acquire, directly or indirectly, securities representing
more than 50% of the voting power of the Company, or a substantial portion of
the assets of the Company and its Subsidiaries taken as a whole, other than the
Merger contemplated by this Agreement.

"SUPERIOR PROPOSAL" means any bona fide written Acquisition Proposal which
(i) the Board of Directors of the Company determines in good faith (after
consultation with a financial advisor of nationally recognized reputation and
taking into account all the terms and conditions of the Acquisition Proposal) is
(a) more favorable to the Company and its stockholders from a financial point of
view than the transaction contemplated hereunder, and (b) reasonably capable of
being completed, including a conclusion that its financing, to the extent
required, is then committed or is in the good faith judgment of the Board of
Directors of the Company, reasonably capable of being financed by the Person
making such Acquisition Proposal.

(b) If a Payment Event (as hereinafter defined) occurs, the Company shall
pay to Parent, if pursuant to (x) below, simultaneously with the occurrence of
such Payment Event or, if pursuant to (y) below, within two business days
following such Payment Event, a fee of $59,000,000 (the "TERMINATION FEE").

"PAYMENT EVENT" means (x) the termination of this Agreement by the Company
or Parent pursuant to Sections 10.01 (d) or (e); or (y) the termination of this
Agreement pursuant to Section 10.01(b) or (f) if at the time of such termination
(or, in the case of a termination pursuant to Section 10.01(f), at the time of
the stockholders meeting), there shall have been outstanding an Acquisition
Proposal pursuant to which stockholders of the Company would receive cash,
securities or other consideration having an aggregate value in excess of $22.25
per Share, and within six months of any such termination described in
clause (y) above the Company enters into a definitive agreement for or
consummates such Acquisition Proposal or another Acquisition Proposal with a
higher per Share value than such Acquisition Proposal.

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(c) Upon the termination of this Agreement pursuant to Sections 10.01(d),
(e) or (f) the Company shall reimburse Parent and its affiliates not later than
two business days after submission of reasonable documentation thereof for 100%
of their documented out-of-pocket fees and expenses (including, without
limitation, the reasonable fees and expenses of their counsel and investment
banking fees), actually incurred by any of them or on their behalf in connection
with this Agreement and the transactions contemplated hereby and the arrangement
of, obtaining the commitment to provide or obtaining the Financing for the
transactions contemplated by this Agreement (including fees payable to the
Financing Entities and their respective counsel) subject to a maximum
reimbursement amount of $7,500,000.

(d) The Company acknowledges that the agreements contained in this
Section 6.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, neither Parent nor Merger Co.
would enter into this Agreement; accordingly, if the Company fails to promptly
pay any amount due pursuant to this Section 6.04, and, in order to obtain such
payment, the other party commences a suit which results in a judgment against
the Company for the fee or fees and expenses set forth in this Section 6.04, the
Company shall also pay to Parent its costs and expenses incurred in connection
with such litigation.

(e) This Section 6.04 shall survive any termination of this Agreement,
however caused, except a termination pursuant to Section 10.01(a) or (c).

Section 6.5. NOTICES OF CERTAIN EVENTS. The Company shall promptly notify
Parent of:

(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;

(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement;

(c) any actions, suits, claims, investigations or proceedings commenced or,
to the best of its knowledge threatened against, relating to or involving or
otherwise affecting the Company or any Subsidiary which, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to
Section 4.12 or which relate to the consummation of the transactions
contemplated by this Agreement.

Section 6.6. RESIGNATION OF DIRECTORS. Prior to the Effective Time, the
Company shall deliver to Parent evidence satisfactory to Parent of the
resignation of all directors of the Company (except as requested by Parent)
effective at the Effective Time.

ARTICLE 7
COVENANTS OF PARENT

Parent agrees that:

Section 7.1. SEC FILINGS. As soon as practicable after the date of
announcement of the execution of the Merger Agreement, Parent shall file
(separately, or as part of the Company Proxy Statement) with the SEC, if
required, a Rule 13E-3 Transaction Statement (the "TRANSACTION STATEMENT") with
respect to the Merger (together with any supplements or amendments thereto,
collectively the "PARENT DISCLOSURE DOCUMENTS"). Parent and the Company each
agrees to correct any information provided by it for use in the Parent
Disclosure Documents if and to the extent that it shall have become false or
misleading in any material respect. Parent agrees to take all steps necessary to
cause the Parent Disclosure Documents as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given an opportunity to review and comment on each Parent Disclosure
Document prior to its being filed with the SEC.

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Section 7.2. CONFIDENTIALITY. The Confidentiality Agreement dated July 5,
2000 between the Company and DLJ Merchant Banking III, Inc. (the
"CONFIDENTIALITY AGREEMENT') shall continue in full force and effect prior to
the Effective Time and after any termination of this Agreement.

Section 7.3. VOTING OF SHARES. Parent agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.

Section 7.4. DIRECTOR AND OFFICER LIABILITY. For six years after the
Effective Time, Parent will cause the Surviving Corporation to indemnify and
hold harmless the present and former officers and directors of the Company in
respect of acts or omissions occurring prior to the Effective Time to the extent
provided under the Company's articles of incorporation and bylaws in effect on
the date hereof; PROVIDED that such indemnification shall be subject to any
limitation imposed from time to time under applicable law. For six years after
the Effective Time, Parent will cause the Surviving Corporation to use its best
efforts to provide officers' and directors' liability insurance in respect of
acts or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof, PROVIDED that if the
aggregate annual premiums for such insurance at any time during such period
shall exceed 200% of the per annum rate of premium paid by the Company in its
last full fiscal year for such insurance, then Parent shall cause the Surviving
Corporation to provide only such coverage as shall then be available at an
annual premium equal to 200% of such rate.

Section 7.5. EMPLOYEE MATTERS. Parent agrees that, for at least one year
from the Effective Time, subject to applicable law, the Surviving Corporation
and its Subsidiaries will provide benefits to its employees which will, in the
aggregate, be comparable to those currently provided by the Company and its
Subsidiaries to their employees (other than any stock option or other equity
based incentive plan currently provided by the Company); PROVIDED, however, that
this Section 7.05 shall not apply to any employees represented for purposes of
collective bargaining. Notwithstanding the foregoing, nothing herein shall
otherwise limit the Surviving Corporation's right to amend, modify or terminate
any Employee Plan.

Section 7.6. FINANCING. Parent shall use its reasonable best efforts to
obtain the Financing. In the event that any portion of such Financing becomes
unavailable, regardless of the reason therefor, Parent will use its reasonable
best efforts to obtain alternative financing on substantially comparable or more
favorable terms from other sources.

Section 7.7. OTHER ARRANGEMENTS. Parent shall promptly notify the Company
of any arrangements, understandings or agreements entered into prior to the
Company Stockholder Meeting between Parent, Merger Co., DLJMB or any of their
affiliates on the one hand, and any directors, officers or employees of the
Company or any Subsidiary or any stockholder of the Company on the other hand,
relating to the transactions contemplated hereby

Section 7.8. OBLIGATIONS OF MERGER CO.. Parent will take all action
necessary to cause Merger Co. to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.

Section 7.9. AMENDMENTS TO THE VOTING AGREEMENT. Neither Parent nor Merger
Co. will agree to any amendment of, or waiver of compliance with, clauses
4(iii) or 15 of the Voting Agreement, without the prior written consent of the
Company.

Section 7.10. ACQUISITIONS OF SHARES. Neither Parent nor Merger Co. will
acquire any Shares prior to the Closing or the termination of this Agreement,
other than Shares owned beneficially by any Stockholder.

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Section 7.11. NOTICES OF CERTAIN EVENTS. Parent shall promptly notify the
Company of:

(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;

(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement;

(c) any actions, suits, claims, investigations or proceedings commenced or,
to the best of its knowledge threatened against, relating to or involving or
otherwise affecting Parent or any of its subsidiaries which relate to the
consummation of the transactions contemplated by this Agreement.

ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY

The parties hereto agree that:

Section 8.1. BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. Subject to Section 6.04, each party
shall also refrain from taking, directly or indirectly, any action contrary to
or inconsistent with the provisions of this Agreement, including action which
would impair such party's ability to consummate the Merger and the other
transactions contemplated hereby. Without limiting the foregoing, the Company
and its Board of Directors shall use their reasonable best efforts to (a) take
all action necessary so that no state takeover statute or similar statute or
regulation is or becomes applicable to the Merger or any of the other
transactions contemplated by this Agreement and (b) if any state takeover
statute or similar statute or regulation becomes applicable to any of the
foregoing, take all action necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement. Each of Parent and the Company
shall use its best efforts to eliminate any impediment under any antitrust,
competition or trade regulation laws that may be asserted by any governmental
entity with respect to the Merger so as to enable the Closing to occur as soon
as reasonably practicable, which, in the case of Parent, shall be construed to
include the reallocation of the proposed ownership by stockholders of Parent
other than DLJMB and its affiliates so as to address any such impediment.

Section 8.2. CERTAIN FILINGS. (a) The Company and Parent shall use their
respective reasonable best efforts to take or cause to be taken, (i) all actions
necessary, proper or advisable by such party with respect to the prompt
preparation and filing with the SEC of the Company Disclosure Documents and the
Parent Disclosure Documents, and (ii) such actions as may be required to have
the Company Proxy Statement cleared by the SEC, in each case as promptly as
practicable.

(b) The Company agrees to provide all necessary and reasonable cooperation,
in connection with the arrangement of any financing to be consummated
contemporaneous with the consummation of the Merger including without
limitation, (x) allowing the participation by its officers in meetings, due
diligence sessions and road shows, (y) the preparation of offering memoranda,
private placement memoranda, prospectuses and similar documents, and (z) the
execution and delivery of any commitment letters, underwriting or placement
agreements, registration statements, pledge and security documents, other
definitive financing documents, or other requested certificates or documents,
including allowing for a certificate of the chief financial officer of the
Company with respect to solvency matters, comfort letters of accountants and
legal opinions as may be reasonably requested by Parent; PROVIDED that the
Company shall not be liable for any fees or expenses incurred in connection with
such activities in the event that the Merger is not consummated.

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(c) The Company and Parent shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with or as a result of the consummation of the
transactions contemplated by this Agreement and (ii) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Company Disclosure
Documents and Parent Disclosure Documents and seeking timely to obtain any such
actions, consents, approvals or waivers.

Section 8.3. PUBLIC ANNOUNCEMENTS. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except for any press release or public statement as may be required by
applicable law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement prior to
such consultation.

Section 8.4. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Parent, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Parent, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.

ARTICLE 9
CONDITIONS TO THE MERGER

Section 9.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations
of the Company, Parent and Merger Co. to consummate the Merger are subject to
the satisfaction of the following conditions:

(a) this Agreement shall have been adopted by the stockholders of the
Company in accordance with Delaware Law;

(b) any applicable waiting period under the HSR Act relating to the Merger
shall have expired or been terminated;

(c) no provision of any applicable law or regulation and no judgment,
injunction, order of decree shall prohibit or restrain the consummation of the
Merger; PROVIDED, HOWEVER, that the Company and Parent shall each use its
reasonable efforts to have any such judgment, order, decree or injunction
vacated; and

(d) All consents, approvals and licenses of any governmental or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Surviving Corporation to conduct the
business of the Company in substantially the manner now conducted, shall have
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving effect
to the transactions contemplated by this Agreement (including the Financing).

Section 9.2. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER CO.. The
obligations of Parent and Merger Co. to consummate the Merger are subject to the
satisfaction or waiver by Parent of the following further conditions:

(a) (i) the Company shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, (ii) except as affected by actions specifically permitted by
this Agreement, the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the Company
pursuant hereto (x) that are qualified by materiality or Material Adverse Effect
shall be true at and as of the Effective

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<PAGE>
Time as if made at and as of such time, and (y) that are not qualified by
materiality or Material Adverse Effect shall be true in all material respects at
and as of the Effective Time as if made at and as of such time (except in
respect of representations made as of a specified date which shall be required
to be true as of such specified date) and (iii) Parent shall have received a
certificate signed on behalf of the Company by the President or any Vice
President of the Company to the foregoing effect;

(b) there shall not be instituted or pending any action or proceeding by any
government or governmental authority or agency or any action or proceeding by
any other person that has a reasonable likelihood of success, before any court
or governmental authority or agency, (i) challenging or seeking to make illegal,
to delay materially or otherwise directly or indirectly to restrain or prohibit
the consummation of the Merger or seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions contemplated by
this Agreement, (ii) seeking to restrain or prohibit Parent's ownership or
operation (or that of its subsidiaries or affiliates) of all or any material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or of Parent and its subsidiaries, taken as a whole, or to compel
Parent or any of its subsidiaries or affiliates to dispose of or hold separate
all or any material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken as a
whole, (iii) seeking to impose or confirm material limitations on the ability of
Parent or any of its subsidiaries or affiliates to effectively control the
business or operations of the Company and its Subsidiaries, taken as a whole, or
the ability of Parent or any of its subsidiaries or affiliates effectively to
exercise full rights of ownership of any shares of the Company or any of its
Subsidiaries or affiliates on all matters properly presented to the Company's
stockholders, or (iv) seeking to require divestiture by Parent or any of its
subsidiaries or affiliates of any shares of the Company, and no court,
arbitrator or governmental body, agency or official shall have issued any
judgment, order, decree or injunction, and there shall not be any statute, rule
or regulation proposed, adopted or enacted, that is likely, directly or
indirectly, to result in any of the consequences referred to in the preceding
clauses (i) through (iv);

(c) Parent shall have received all documents it may reasonably request
relating to the existence of the Company and the Subsidiaries and the authority
of the Company for this Agreement, all in form and substance satisfactory to
Parent;

(d) funds in an amount at least equal to the Required Amounts shall have
been made available to Parent and Merger Co. as contemplated in Section 5.07;

(e) the holders of not more than 5% of the outstanding Shares shall have
demanded appraisal of their Shares in accordance with Delaware Law;

(f) any consent or approval required under the agreements, contracts or
other instruments listed on Schedule 9.02 as a result of the execution of this
Agreement or the transactions contemplated hereby have been received by the
Company, and no such consent or approval shall have been revoked;

(g) total indebtedness (long and short term), net of cash and marketable
securities, of the Company and its Subsidiaries as of the Effective Time shall
not exceed $1.5 billion; and

(h) the Company shall not have revalued any of its assets, including,
without limitation, writing down the value of inventory in any manner or
writing-off notes or accounts receivable in any manner if the effect of such
revaluation would reasonably be expected to be a Material Adverse Effect.

Section 9.3. CONDITION TO THE OBLIGATION OF THE COMPANY. The obligation of
the Company to consummate the Merger is subject to the satisfaction of the
following further conditions:

(a) (i) Each of Parent and Merger Co. shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, (ii) except as affected by actions specifically
permitted by this Agreement, the representations and warranties of Parent
contained in this Agreement and in any certificate or other writing delivered by
Parent pursuant hereto (x) that are qualified by materiality or Material Adverse
Effect shall be true at and as of the

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Effective Time as if made at and as of such time and (y) that are not qualified
by materiality or Material Adverse Effect shall be true in all material respects
at and as of the Effective Time as if made at and as of such time (except in
respect of representations made as of a specified date which shall be required
to be true as of such specified date) and (iii) the Company shall have received
a certificate signed by the President or any Vice President of Parent to the
foregoing effect.

(b) The Board of Directors of the Company shall have received advice
reasonably satisfactory to the Special Committee from an independent advisor
(who may also be advisor to the Financing Entities) selected with reasonable
care by or on behalf of the Company confirming the belief of Parent set forth in
the last sentence of Section 5.07.

(c) This Agreement shall have been approved by the holders of a majority of
the Shares voting (whether in person or by proxy) at the Company Stockholder
Meeting other than Shares owned beneficially by any Person identified in
Schedule 9.03(c) or by an affiliate of any such Person (except as to any such
affiliate Shares owned in a financing or advisory capacity). This condition
shall not be waived by the Company unless (i) it has given written notice of its
intention to so waive to the stockholders of the Company at least 10 business
days prior to the Company Stockholder Meeting, (ii) such notice is filed with
the SEC, if required, and (iii) if such notice is so filed, it complies as to
form in all material respects with the applicable requirements of the Exchange
Act (except as to any information furnished to the Company by Parent in writing
specifically for inclusion in such notice).

ARTICLE 10
TERMINATION

Section 10.1. TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval of this Agreement by the stockholders of the Company):

(a) by mutual written consent of the Company and Parent;

(b) by either the Company or Parent, if the Merger has not been consummated
by March 31, 2001, provided that the party seeking to exercise such right is not
then in breach in any material respect of any of its obligations under this
Agreement;

(c) by either the Company or Parent, if there shall be any law or regulation
that makes consummation of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining Parent or the Company from
consummating the Merger is entered and such judgment, injunction, order or
decree shall become final and nonappealable;

(d) by Parent if the Board of Directors of the Company shall have withdrawn,
or modified or amended in a manner adverse to Parent, its approval or
recommendation of this Agreement and the Merger or its recommendation that
stockholders of the Company adopt and approve this Agreement and the Merger or
approved, recommended or endorsed any proposal for a transaction other than the
Merger (including a tender or exchange offer for Shares) or if the Company has
failed to call the Company Stockholder Meeting or failed to mail the Company
Proxy Statement to its stockholders within 20 days after being cleared by the
SEC or failed to include in such statement the recommendation referred to above;

(e) by the Company, if (i) the Board of Directors of the Company authorizes
the Company, subject to complying with the terms of this Agreement, to enter
into a binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Parent in writing at least three days
prior to the proposed effectiveness of such termination that it intends to enter
into such an agreement, attaching a description of the material terms and
conditions thereof and permits Parent, within such three business day period to
submit a new offer, which shall be considered by the Special Committee in good
faith (it being understood that the Company shall not enter into any such
binding agreement during such three day period) and (ii) the Company prior to
such termination

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pursuant to this clause 10.01(e) pays to Parent in immediately available funds
the fees required to be paid pursuant to Section 6.04. The Company agrees to
notify Parent promptly if its intention to enter into a written agreement
referred to in its notification shall change at any time after giving such
notification; and

(f) by either the Company or Parent if, at a duly held stockholders meeting
of the Company or any adjournment thereof at which this Agreement and the Merger
are voted upon, the requisite stockholder adoption and approval shall not have
been obtained.

The party desiring to terminate this Agreement pursuant to Sections
10.01(b)-10.01(f) shall give written notice of such termination to the other
party in accordance with Section 11.01.

Section 10.2. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that termination of
this Agreement shall be without prejudice to any rights any party may have
hereunder against any other party for breach of this Agreement; PROVIDED that,
in the event of any such termination, no party shall under any circumstances
have any monetary liability to any other party based upon a breach of any
representation or warranty contained herein. The agreements contained in
Sections 6.04, 7.02, 10.02, 11.04 and 11.06 shall survive the termination
hereof.

ARTICLE 11
MISCELLANEOUS

Section 11.1. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,

if to Parent or Merger Co., to:

Thompson Dean
c/o DLJ Merchant Banking III, Inc.
277 Park Avenue
New York, NY 10172
Telecopy: 212-892-7272

with a copy to:

George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: 212-450-4800

if to the Company, to:

Robert L. Peterson, Chairman of the Board
and Chief Executive Officer, and
JoAnn R. Smith, Chairperson of the Special Committee,
c/o IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Telecopy: (605) 235-2427

with a copy to:

Sheila B. Hagen, Esq.
c/o IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Telecopy: (605) 235-2427

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<PAGE>
and with an additional copy to:

Richard D. Katcher, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: 212-403-2222

or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.

Section 11.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time except for the representations, warranties and agreements set
forth in Sections 7.04, 7.05, 11.04 and 11.06.

Section 11.3. AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
each party to this Agreement or in the case of a waiver, by the party against
whom the waiver is to be effective; PROVIDED that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver shall,
without the further approval of such stockholders, alter or change (i) the
amount or kind of consideration to be received in exchange for any shares of
capital stock of the Company or (ii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the rights of the
holders of any shares of capital stock of the Company.

(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

Section 11.4. EXPENSES. Except as provided in Section 6.04, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.

Section 11.5. SUCCESSORS AND ASSIGNS; BENEFIT. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, PROVIDED that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Parent and
Merger Co. may make such an assignment to one or more of their affiliates.
Nothing in this Agreement, expressed or implied, shall confer on any Person
other than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except that the present and former officers and directors of the
Company shall have the rights set forth in Section 7.04 hereof.

Section 11.6. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, except that,
insofar as the procedures of the Merger that are subject to Delaware Law because
the Parent, Merger Co. and the Company are incorporated in Delaware are
concerned, the law of the State of Delaware shall apply.

Section 11.7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

<TABLE>
<S> <C> <C>
IBP, INC.

By: /s/ ROBERT L. PETERSON
-----------------------------------------
Name: Robert L. Peterson
Title: Chairman & CEO

IBP, RAWHIDE HOLDINGS CORPORATION

By: /s/ ARI BENACERRAF
-----------------------------------------
Name: Ari Benacerraf
Title: President

RAWHIDE ACQUISITION CORPORATION

By: /s/ ARI BENACERRAF
-----------------------------------------
Name: Ari Benacerraf
Title: President
</TABLE>

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<PAGE>
APPENDIX B

VOTING AGREEMENT

In consideration of Rawhide Holdings Corporation, a Delaware corporation
("PARENT"), and Rawhide Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Parent ("MERGER CO."), entering into on the date
hereof an Agreement and Plan of Merger (the "MERGER AGREEMENT") dated as of the
date hereof with IBP, inc., a Delaware corporation (the "COMPANY"), which
provides, among other things, that Merger Co., upon the terms and subject to the
conditions thereof, will be merged with and into the Company (the "MERGER") and
each outstanding share of common stock, $0.05 par value, of the Company (the
"COMPANY COMMON STOCK") will be converted into the right to receive the Merger
Consideration (as defined in the Merger Agreement) in accordance with the terms
of such Agreement, each of the undersigned holders (each, a "STOCKHOLDER" and
collectively, the "STOCKHOLDERS") of shares of Company Common Stock agrees with
Parent and Merger Co. as follows:

1. During the period (the "AGREEMENT PERIOD") beginning on the date hereof
and ending on the earlier of (i) the Effective Time (as defined in the Merger
Agreement), (ii) the date of any substantive amendment to the Merger Agreement
(including, without limitation, any amendment that increases the Merger
Consideration (as defined in the Merger Agreement)), which has not been approved
in writing by the Stockholder and (iii) the date of termination of the Merger
Agreement, the Stockholder hereby agrees to vote the shares of Company Common
Stock set forth opposite its name in Schedule A hereto (the "SCHEDULE A
SECURITIES") to approve and adopt the Merger Agreement, the Merger and all
agreements related to the Merger and any actions directly and reasonably related
thereto at any meeting or meetings of the stockholders of the Company, and at
any adjournment thereof or pursuant to action by written consent, at or by which
such Merger Agreement, or such other actions, are submitted for the
consideration and vote of the stockholders of the Company. Parent agrees to
notify the Stockholder promptly upon receipt by Parent, Merger Co. or DLJMB (as
defined in the Merger Agreement) of any information relating to any Acquisition
Proposal (as defined in the Merger Agreement) and to forward immediately to the
Stockholder by telecopy any written material delivered to any of them relating
to any such Acquisition Proposal.

2. During the Agreement Period, the Stockholder hereby agrees that it will
not vote any of its Schedule A Securities in favor of the approval of any other
merger, consolidation, sale of assets, reorganization, recapitalization,
liquidation or winding up of the Company or any other extraordinary transaction
involving the Company or any matters related to or in connection therewith, or
any corporate action relating to or the consummation of which would either
frustrate the purposes of, or prevent or delay the consummation of, the
transactions contemplated by the Merger Agreement.

3. During the Agreement Period, the Stockholder hereby irrevocably appoints
Parent as proxy for and on behalf of such Stockholder to vote (including,
without limitation, the taking of action by written consent) such Stockholder's
Schedule A Securities, for and in the name, place and stead of such Stockholder
for the matters and in the manner contemplated by paragraph 1 above.

4. During the Agreement Period, the Stockholder will not, directly or
indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as defined in the Merger Agreement), (ii) engage in
negotiations or discussions with, or disclose any nonpublic information relating
to the Company or any Subsidiary or afford access to the properties, books or
records of the Company or any Subsidiary to, or otherwise assist, facilitate or
encourage, any Person (as defined in the Merger Agreement) that may be
considering making, or has made, an Acquisition Proposal or (iii) acquire
beneficial ownership (as defined in Rule 13d-3 of the Securities Exchange Act of
1934) of any shares of the Company Common Stock in addition to those set forth
in Schedule A (other than pursuant to or as a result of this Voting Agreement).
The Stockholder agrees to promptly notify Parent after receipt of

B-1
<PAGE>
any Acquisition Proposal or any indication from any Person that it is
considering making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any Subsidiary or for access to the
properties, books or records of the Company or any Subsidiary by any Person that
may be considering making, or has made, an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request (in each case, to the extent permitted by any
confidentiality agreement to which such Stockholder is a party).

5. The Stockholder hereby agrees not to exercise any rights (including,
without limitation, under Section 262 of the Delaware General Corporation Law)
to demand appraisal of any shares of Company Common Stock owned by such
Stockholder in connection with the Merger.

6. The Stockholder hereby represents and warrants to Parent that as of the
date hereof:

(a) The Stockholder (i) owns beneficially all of the shares of Company
Common Stock set forth opposite the Stockholder's name in Schedule A hereto,
and no other shares of Company Common Stock, (ii) has the full and
unrestricted legal power, authority and right to enter into, execute and
deliver this Voting Agreement without the consent or approval of any other
person and (iii) has not entered into any voting agreement with or granted
any person any proxy (revocable or irrevocable) with respect to such shares
(other than this Voting Agreement).

(b) This Voting Agreement is the valid and binding agreement of the
Stockholder.

(c) No investment banker, broker or finder is entitled to a commission
or fee from the Stockholder or the Company in respect of this Agreement
based upon any arrangement or agreement made by or on behalf of the
Stockholder.

7. If any provision of this Voting Agreement shall be invalid or
unenforceable under applicable law, such provision shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining provisions of this Voting Agreement.

8. This Voting Agreement may be executed in two or more counterparts each of
which shall be an original with the same effect as if the signatures hereto and
thereto were upon the same instrument.

9. The parties hereto agree that if for any reason any party hereto shall
have failed to perform its obligations under this Voting Agreement, then the
party seeking to enforce this Agreement against such non-performing party shall
be entitled to specific performance and injunctive and other equitable relief,
and the parties hereto further agree to waive any requirement for the securing
or posting of any bond in connection with the obtaining of any such-injunctive
or other equitable relief. This provision is without prejudice to any other
rights or remedies, whether at law or in equity, that any party hereto may have
against any other party hereto for any failure to perform its obligations under
this Voting Agreement.

10. This Voting Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

11. The Stockholder will, upon request, execute and deliver any additional
documents deemed by Parent to be necessary or desirable to complete and
effectuate the covenants contained herein.

12. This Agreement shall terminate upon the termination of the Agreement
Period.

13. The Stockholder hereby agrees that if it sells, transfers, assigns,
encumbers or otherwise disposes (each, a "TRANSFER") of any Schedule A
Securities (whether to an affiliate or otherwise) during the Agreement Period,
such Stockholder shall require the transferee of such Schedule A Securities to
execute and deliver to Parent, Merger Co. and the Company a voting agreement
identical in form to this Voting Agreement except for the identity of the
Stockholder prior to or concurrent with the consummation of such Transfer.
Parent, Merger Co. and the Company understand and acknowledge

B-2
<PAGE>
that, subject to the preceding sentence, the Stockholder is free to Transfer any
Schedule A Securities at such times and in such manner as it deems appropriate.

14. All other voting agreements signed with existing shareholders prior to
or concurrently herewith are substantially identical to this Agreement.

15. Nothing in this Agreement, express or implied, shall confer on any
person other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except that clause 4(iii) of this Agreement shall inure to the
benefit of the Company and the Company shall be entitled to enforce such clause
to the same extent as if it were a party hereto.

16. All notices, requests and other communications to any party hereunder
shall be in writing (including telecopy or similar writing) and shall be given,

If to Parent or Merger Co., to:

Thompson Dean
c/o DLJ Merchant Banking III, Inc.
277 Park Avenue
New York, New York 10172
Telecopy: 212-892-7272

with a copy to:

George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: 212-450-4800

If to Booth Creek Partners Limited III, LLLP or Jeffrey J. Joyce, to:

Booth Creek Partners Limited III, LLLP
1000 South Frontage Rd., West
Suite 100
Vail, Colorado 81657
Telecopy: 970-476-4030
Telephone: 970-476-4030

Jeffrey J. Joyce
954 New Bedford Court
Marietta, Georgia 30068
Telecopy: 770-980-4905
Telephone: 770-980-4903

with a copy to:

Randall Doud
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Telecopy: 212-735-2000
Telephone: 212-735-2524

B-3
<PAGE>
If to Archer-Daniels-Midland Company, to:

David Smith, Esq.
Archer-Daniels-Midland Company
4666 Faries Parkway
P.O. Box 1470
Decatur, IL 62525
Telecopy: (217) 424-6196
Telephone: (217) 424-6183

with a copy to:

James E. Nicholson
Faegre & Benson LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Telecopy: (612) 336-3026
Telephone: (612) 336-3203

or such other address or telecopy or telephone number as such party may
hereafter specify for the purpose by notice to the other parties hereto. Each
such notice, request or other communication shall be effective (a) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate telecopy confirmation is received or (b) if
given by any other means, when delivered at the address specified in this
Section.

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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement
as of the 1st day of October, 2000.

<TABLE>
<S> <C> <C>
RAWHIDE HOLDINGS CORPORATION

By: /s/ ARI BENACERRAF
-----------------------------------------
Name: Ari Benacerraf
Title: President

RAWHIDE ACQUISITION CORPORATION

By: /s/ ARI BENACERRAF
-----------------------------------------
Name: Ari Benacerraf
Title: President

BOOTH CREEK PARTNERS
LIMITED III, LLLP

By: /s/ JEFFREY JOYCE
-----------------------------------------
Name: Jeffrey Joyce
Title: Executive Vice President

JEFFREY J. JOYCE

By: /s/ JEFFREY JOYCE
-----------------------------------------

ARCHER-DANIELS-MIDLAND COMPANY

By: /s/ D.J. SMITH
-----------------------------------------
Name: D.J. Smith
Title: Vice President, Secretary and
General Counsel
</TABLE>

B-5
<PAGE>
SCHEDULE A

<TABLE>
<CAPTION>
SHARES OF COMPANY
STOCKHOLDER COMMON STOCK
----------- -----------------
<S> <C>
Booth Creek Partners Limited III, LLLP...................... 3,644,923
Jeffrey J. Joyce............................................ 643,030
Archer-Daniels-Midland Company.............................. 12,951,400
</TABLE>

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<PAGE>
APPENDIX C

FAIRNESS OPINION OF J.P. MORGAN SECURITIES INC.

October 1, 2000

Special Committee of the Board of Directors
IBP, Inc.
800 Stevens Port Drive
Dakota Dunes, SD 57049

Ladies and Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the stockholders of IBP, inc. (the "Company") of the consideration
proposed to be paid to them in connection with the proposed merger (the
"Merger") of the Company with a subsidiary of Rawhide Holdings Corporation
("Parent"), a Delaware corporation of which all of the outstanding capital stock
is owned, by DLJ Merchant Banking Partners III, L.P. (the "Buyer"). Pursuant to
the Agreement and Plan of Merger, dated as of October 1, 2000 (the "Agreement"),
among the Company, Parent and Rawhide Acquisition Corporation, a subsidiary of
Parent ("Acquisition Corp."), Acquisition Corp. shall be merged with and into
the Company whereupon the Company will become a wholly owned subsidiary of
Parent and the stockholders of the Company immediately prior to the Merger will
receive for each share of Common Stock, par value $0.05 per share, of the
Company held by them cash consideration equal to $22.25 per share.

In arriving at our opinion, we have reviewed (i) the Agreement and the
Voting Agreement (as defined in the Agreement); (ii) certain publicly available
information concerning the business of the Company and of certain other
companies in meat processing and branded foods sector and the reported market
prices for such other companies' securities; (iii) publicly available terms of
certain transactions involving companies in the meat processing and branded
foods sector and the consideration received for such companies; (iv) current and
historical market prices of the common stock of the Company; (v) the audited
financial statements of the Company for the fiscal year ended December 31, 1999,
and the unaudited financial statements of the Company for the period ended
June 30, 2000; (vi) certain internal financial analyses and forecasts prepared
by the Company and its management; and (vii) the terms of other business
combinations that we deemed relevant.

In addition, we have held discussions with certain members of the management
of the Company and the Buyer with respect to certain aspects of the Merger, and
the past and current business operations of the Company, the financial condition
and future prospects and operations of the Company, the effects of the Merger on
the financial condition and future prospects of the Company, and certain other
matters we believed necessary or appropriate to our inquiry. We have reviewed
such other financial studies and analyses and considered such other information
as we deemed appropriate for the purposes of this opinion.

In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or was furnished to us by the Company or the Buyer or otherwise
reviewed by us, and we have not assumed any responsibility or liability
therefor. We have not conducted any valuation or appraisal of any assets or
liabilities, nor have any such valuations or appraisals been provided to us. In
relying on financial analyses and forecasts provided to us, we have assumed that
they have been reasonably prepared based on assumptions reflecting the best
currently available estimates and judgments by management as to the expected
future results of operations and financial condition of the Company to which
such analyses or forecasts

C-1
<PAGE>
relate. We have also assumed that the Merger will have the tax consequences
described in discussions with, and materials furnished to us by, representatives
of the Company, and that the other transactions contemplated by the Agreement
will be consummated as described in the Agreement. We have relied as to all
legal matters relevant to rendering our opinion upon the advice of counsel.

Our opinion is necessarily based on economic, market and other conditions as
in effect on, and the information made available to us as of, the date hereof.
It should be understood that subsequent developments may affect this opinion and
that we do not have any obligation to update, revise, or reaffirm this opinion.

We have acted as financial advisor to the Special Committee of the Board of
Directors of the Company with respect to the proposed Merger and will receive a
fee from the Company. Please be advised that we have no other financial advisory
or other relationships with the Company or the Buyer. In the ordinary course of
their businesses, J.P. Morgan and its affiliates may actively trade the debt and
equity securities of the Company for their own account or for the accounts of
customers and, accordingly, they may at any time hold long or short positions in
such securities.

We note that we were not authorized to and did not solicit any expressions
of interest from any other parties with respect to the sale of all or any part
of the Company or any other alternative transaction. Consequently, no opinion is
expressed whether any alternative transaction might produce consideration for
the Company's stockholders in an amount in excess of that contemplated in the
Merger.

On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that the consideration to be paid to the Company's stockholders in
the proposed Merger is fair, from a financial point of view, to such
stockholders.

This letter is provided to the Special Committee of the Board of Directors
of the Company in connection with and for the purposes of its evaluation of the
Merger. This opinion does not constitute a recommendation to any stockholder of
the Company as to how such stockholder should vote with respect to the Merger.
This opinion may not be disclosed, referred to, or communicated (in whole or in
part) to any third party for any purpose whatsoever except with our prior
written consent in each instance. This opinion may be reproduced in full in any
proxy or information statement mailed to stockholders of the Company but may not
otherwise be disclosed publicly in any manner without our prior written approval
and must be treated as confidential.

<TABLE>
<S> <C> <C>
Very truly yours,

J.P. MORGAN SECURITIES INC.

/s/ J.P. MORGAN
-----------------------------------------
By:
</TABLE>

C-2
<PAGE>
APPENDIX D

SECTION 262 OF THE GENERAL CORPORATION
LAW OF THE STATE OF DELAWARE

SECTION 262--APPRAISAL RIGHTS.

(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to sec. 228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec.
264 of this title:

(1) Provided, however, that no appraisal rights under this section shall be
available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange
or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
or (ii) held of record by more than 2,000 holders; and further provided
that no appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of sec. 251 of this title.

(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under
this section shall be available for the shares of any class or series of
stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to sec.
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:

a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;

b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;

D-1
<PAGE>
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph;
or

d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.

(3) In the event all of the stock of a subsidiary Delaware corporation party
to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20 days prior to the
meeting, shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal rights
are available pursuant to subsections (b) or (c) hereof that appraisal
rights are available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this section.
Each stockholder electing to demand the appraisal of his shares shall
deliver to the corporation, before the taking of the vote on the merger
or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing
to take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or

(2) If the merger or consolidation was approved pursuant to sec. 228 or sec.
253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that appraisal
rights are available for any or all shares of such class or series of
stock of such constituent corporation, and shall include in such notice a
copy of this section; provided that, if the notice is given on or after
the effective date of the merger or consolidation, such notice shall be
given by the surviving or resulting corporation to all such holders of
any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice may, and, if given on or after
the effective date of the merger or consolidation, shall, also notify
such stockholders of the effective date of the merger or consolidation.
Any stockholder entitled to appraisal rights may, within 20 days after
the date of mailing of such notice, demand in writing from the surviving
or resulting corporation the appraisal of such holder's shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to

D-2
<PAGE>
demand the appraisal of such holder's shares. If such notice did not
notify stockholders of the effective date of the merger or consolidation,
either (i) each such constituent corporation shall send a second notice
before the effective date of the merger or consolidation notifying each
of the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the effective date
of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or
within 10 days after such effective date; provided, however, that if such
second notice is sent more than 20 days following the sending of the
first notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded appraisal of
such holder's shares in accordance with this subsection. An affidavit of
the secretary or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such notice has
been given shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of determining the stockholders
entitled to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than 10 days prior to
the date the notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the record date
shall be such effective date. If no record date is fixed and the notice
is given prior to the effective date, the record date shall be the close
of business on the date next preceding the day on which the notice is
given.

(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and
(d) hereof, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a statement
setting forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written statement shall
be mailed to the stockholder within 10 days after his written request for such a
statement is received by the surviving or resulting corporation or within
10 days after expiration of the period of delivery of demands for appraisal
under subsection (d) hereof, whichever is later.

(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by

D-3
<PAGE>
certificates to submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with such direction, the Court may dismiss the
proceedings as to such stockholder.

(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.

(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.

(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within
60 days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.

(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 349, L.
'96, eff. 7-1-96).

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<PAGE>

[INSERT IBP LOGO]

IBP, INC.

SPECIAL MEETING OF STOCKHOLDERS

[DAY OF WEEK], [ ], 2000
[ ] A.M. [LOCAL TIME]

[LOCATION]

IBP, INC.

[LOGO] PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 2000

I appoint Robert L. Peterson and Sheila B. Hagen, together and separately, as
proxies to vote all shares of common stock which I have power to vote at the
special meeting of stockholders to be held on [ ], 2000 at [location], and
at any adjournment thereof, in accordance with the instructions on the reverse
side of this card and with the same effect as though I were present in person
and voting such shares. The proxies are authorized in their discretion to vote
upon such other business as may properly come before the meeting and they may
name others to take their place.

(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)

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COMPANY #
CONTROL #
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THERE ARE THREE WAYS TO VOTE YOUR PROXY

VOTE BY PHONE VOTE VIA INTERNET
1-800-[ ] http://www.[ ] VOTE BY MAIL

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Use any touch-tone telephone to Use the Internet to vote your Mark, sign and date your proxy
vote your proxy 24 hours a day, proxy 24 hours a day, 7 days a card and return it in the postage-
7 days a week. Have your proxy week. Have your proxy card in paid envelope we have provided.
card in hand when you call. You hand when you access the web
will be prompted to enter your 3- site. You will be prompted to
digit company number and a 7-digit enter your 3-digit company number
control number, which are located and a 7-digit control number,
above, and then follow the simple which are located above, to create
instructions. an electronic ballot.
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Your telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned the proxy card.
The deadline for telephone or Internet voting is noon EDT, [day of week],
[ ], 2000.

IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD

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THE DIRECTORS RECOMMEND A VOTE "FOR" ITEM 1.

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1. Approve and adopt the Agreement and Plan /_/ For /_/ Against /_/ Abstain
of Merger dated October 1, 2000, among IBP,
Inc., Rawhide Holdings Corporation and
Rawhide Acquisition Corporation.

2. Transact such other business as may properly
come before the special meeting or any
adjournment.
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THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED
"FOR" ITEM 1.

Address Change? Mark Box /_/ Dated
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Indicate changes below:

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Signature(s) of Stockholder(s) in Box

PLEASE SIGN exactly as name appears at left.
Joint owners should each sign. Executors,
administrators, trustees, etc. should so
indicate when signing. If signer is a
corporation, please sign full name by duly
authorized officer.