IBP INC, SC 14D9/A, 2001-01-05

IBP INC
SC 14D9/A, 2001-01-05
MEAT PACKING PLANTS

Previous: IBP INC, SC TO-T/A, EX-99.(D)(6), 2001-01-05

Next: IBP INC, SC 14D9/A, EX-99.(A)(1), 2001-01-05

<PAGE>

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

AMENDMENT NO. 2 TO
SCHEDULE 14D-9
(RULE 14d-101)

SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

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

IBP, INC.
(Name of Subject Company)

IBP, INC.
(Name of Person(s) Filing Statement)

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

Common Stock, Par Value $0.05 Per Share
(Title of Class of Securities)

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

449223106
(CUSIP Number of Class of Securities)

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

SHEILA B. HAGEN, ESQ.
General Counsel
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, SD 57049
Telephone: (605) 235-2061

(Name, Address and Telephone Number of Person authorized to Receive Notice and
Communication
on behalf of the Person(s) Filing Statement)

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

With a copy to:

SETH A. KAPLAN, ESQ.
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, NY 10019
(212) 403-1000

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

[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

IBP, inc., a Delaware corporation ("IBP" or the "Company") hereby amends and
supplements its Solicitation/Recommendation Statement on Schedule 14D-9 dated
December 22, 2000 (as amended and supplemented, the "Schedule 14D-9") filed by
the Company with the Securities and Exchange Commission. This amendment
constitutes Amendment No. 2 to the Schedule 14D-9.

The items of the Schedule 14D-9 set forth below are hereby amended and
supplemented as follows:

Item 1 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 1. SUBJECT COMPANY INFORMATION.

The name of the subject company is IBP, inc., a Delaware corporation ("IBP"
or the "Company"). The principal executive offices of the Company are located
at 800 Stevens Port Drive, Dakota Dunes, South Dakota 57049. The Company's
business telephone number is (605) 235-2061. The class of equity securities to
which this statement relates is the common stock, par value $0.05 per share,
of the Company (the "IBP Common Stock"). As of December 28, 2000, there were
outstanding 105,644,598 shares of IBP Common Stock.

Item 2 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.

The filing person is the subject company. The Company's name, business
address and business telephone number are set forth in Item 1 above.

This Statement relates to the tender offer by Lasso Acquisition Corporation
(the "Purchaser"), a Delaware corporation and a wholly owned subsidiary of
Tyson Foods, Inc. ("Tyson"), to purchase up to 50.1% of the outstanding shares
of IBP Common Stock (the "Shares"), at a purchase price of $30.00 per Share
(the "Offer Price"), net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in Purchaser's Supplement No. 1
to the Offer to Purchase, dated January 5, 2001 (the "Offer to Purchase"), and
in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). The Offer is
described in, and the Offer to Purchase is filed as an exhibit to, an
Amendment No. 9 to the Tender Offer Statement on Schedule TO (as amended or
supplemented from time to time, the "Schedule TO"), filed by Purchaser with
the Securities and Exchange Commission (the "Commission") on January 5, 2001.
The obligation of Purchaser to consummate the Exchange Offer and to issue
shares of Tyson Class A Common Stock in exchange for Shares tendered pursuant
to the Exchange Offer shall be subject to, among other things, at least five
business days having elapsed since acceptance for payment and payment for a
number of Shares pursuant to the Offer representing satisfaction of the
Minimum Condition (defined below).

The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of January 1, 2001 (the "Merger Agreement") among Tyson, Purchaser and the
Company. Pursuant to the Merger Agreement, Tyson will commence promptly an
exchange offer (the "Exchange Offer"). In the Exchange Offer, Tyson would
offer to exchange, for each outstanding Share not owned by Tyson, a number of
shares of Class A common stock, par value $0.10 per share, of Tyson ("Tyson
Class A Common Stock") having a value of $30.00, so long as the average per
share price of Tyson Class A Common Stock during the fifteen trading day
period ending on the second trading day before the expiration date of the
Exchange Offer is at least $12.60 and no more than $15.40. If the average per
share price of Tyson Class A Common Stock is less than $12.60, then each Share
tendered in the Exchange Offer will be exchanged for 2.381 shares of Tyson
Class A Common Stock. If the average per share price of Tyson Class A Common
Stock is more than $15.40, then each Share tendered in the Exchange Offer will
be exchanged for 1.948 shares of Tyson Class A Common Stock.

The Merger Agreement provides that following the completion of the Offer and
the Exchange Offer and the satisfaction or waiver of certain other conditions
in the Merger Agreement, the Company will be merged with and into Purchaser
(the "Merger") with the Purchaser continuing as the surviving corporation (the
"Surviving Corporation"). At the effective time of the Merger (the "Effective
Time"), each Share outstanding immediately prior to the Effective Time (other
than Shares owned by Tyson, Purchaser or other subsidiaries of Tyson) would be
converted into the right to receive shares of Tyson Class A Common Stock
having a value of $30.00 if, during
<PAGE>

the fifteen trading day period ending on the fifth trading day immediately
preceding the Effective Time, the average per share price of Tyson Class A
Common Stock is at least $12.60 and no more than $15.40. If the average per
share price of Tyson Class A Common Stock is less than $12.60, then each Share
outstanding immediately prior to the Effective Time will be exchanged for
2.381 shares of Tyson Class A Common Stock. If the average per share price of
Tyson Class A Common Stock is more than $15.40, then each Share outstanding
immediately prior to the Effective Time will be exchanged for 1.948 shares of
Tyson Class A Common Stock.

In the event that at February 28, 2001, the Minimum Condition (defined
below) has not been satisfied, Purchaser will terminate the Offer and Tyson,
Purchaser and the Company will complete the Merger for consideration including
both cash and Tyson Class A Common Stock (the "Cash Election Merger"). The
"Minimum Condition" means that there are validly tendered and not withdrawn
prior to the expiration date of the Offer a number of Shares representing,
together with the Shares owned by Tyson, at least 50.1% of the total number of
outstanding Shares. In the Cash Election Merger, each holder of Shares will
have the right to elect to receive either $30.00 in cash ("Cash
Consideration") for each Share or a number of shares of Tyson Class A Common
Stock ("Stock Consideration") equal to, (a) if the market price per share of
Tyson Class A Common Stock is equal to or greater than $15.40, 1.948, (b) if
the market price per share of Tyson Class A Common Stock is less than $15.40
and greater than $12.60, the result of $30.00 divided by the market price per
share of Tyson Class A Common Stock, or (c) if the market price per share of
Tyson Class A Common Stock is equal to or less than $12.60, 2.381. The "market
price" per share of Tyson Class A Common Stock is the average of the closing
price per share of Tyson Class A Common Stock for the fifteen consecutive
trading days ending on the fifth trading day immediately preceding the
Effective Time of the Cash Election Merger. The maximum number of Shares for
which Cash Consideration will be paid will be limited to a number of the
outstanding Shares which, together with Shares owned by Tyson and any Shares
the holders of which elect to pursue appraisal rights under General
Corporation Law of the State of Delaware (the "DGCL"), equals 50.1% of the
outstanding Shares. If the number of Shares the holders of which elect Cash
Consideration, together with Shares owned by Tyson and any Shares the holders
of which elect to pursue appraisal rights under the DGCL, exceeds 50.1% of the
outstanding Shares, such holders will receive cash for a pro rata portion of
their Shares and the remaining Shares will receive Stock Consideration. The
maximum number of Shares for which Stock Consideration will be paid will be
limited to 49.9% of the outstanding Shares. If the number of Shares the
holders of which elect Stock Consideration exceeds 49.9% of the outstanding
Shares, such holders will receive Tyson Class A Common Stock for a pro rata
portion of their Shares and the remaining Shares will receive Cash
Consideration.

As set forth in the Schedule TO, the principal executive offices of the
Purchaser and Tyson are located at 2210 West Oaklawn Drive, Springdale,
Arkansas 72762-6999.

Item 3 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

Certain contracts, agreements, arrangements or understandings between the
Company or its affiliates and certain of its directors and executive officers
are, except as noted below, described in the Information Statement (the
"Information Statement") pursuant to Rule 14f-1 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that is attached as Annex C to
this Statement and is incorporated herein by reference. Except as described in
this Statement (including in the Exhibits hereto and in Annex C hereto) or
incorporated herein by reference, to the knowledge of the Company, there are
no material agreements, arrangements, or understandings, or any actual or
potential conflicts of interest between IBP or its affiliates and (1) its
executive officers, directors or affiliates or (2) Tyson or the Purchaser, or
any of their respective executive officers, directors or affiliates.

THE MERGER AGREEMENT.

The summary of the Merger Agreement and the descriptions of the conditions
to the Offer contained in Sections 14 and 17 of the Offer to Purchase, which
is being mailed to stockholders together with this Statement, are incorporated
herein by reference. Such summary and description are qualified in their
entirety by reference to the Merger Agreement, which has been filed as Exhibit
(e)(1) hereto and is incorporated herein by reference.

2
<PAGE>

THE VOTING AGREEMENT.

On January 1, 2001, Tyson Limited Partnership ("TLP") and the Company entered
into a voting agreement (the "Voting Agreement"), a copy of which is filed as
an exhibit to the Schedule TO, pursuant to which TLP agreed to vote all of the
shares of Class B common stock, par value $0.10 per share, of Tyson ("Tyson
Class B Common Stock") that it owns to approve the issuance of Tyson Class A
Common Stock with respect to the Exchange Offer and the Merger at Tyson's
stockholder meeting. TLP owns 102,598,560 shares of Tyson Class B Common Stock
representing approximately 90% of the voting power of Tyson, thus assuring
Tyson shareholder approval. This summary is qualified in its entirety by
reference to the complete text of the Voting Agreement which has been filed as
Exhibit (e)(2) hereto and is incorporated herein by reference.

CONFIDENTIALITY AGREEMENTS.

On December 4, 2000, the Company and Tyson entered into a confidentiality
agreement (the "Confidentiality Agreement"), a copy of which is filed as an
exhibit to the Schedule TO, pursuant to which Tyson agreed to keep confidential
certain information it and its advisors may receive from the Company and its
advisors in connection with Tyson's evaluation of a potential transaction.
Under the Confidentiality Agreement, Tyson is prohibited prior to March 31,
2001 from making any proposals to acquire less than all of the outstanding
Shares, and from acquiring additional Shares in the open market if such
acquisition would result in Tyson beneficially owning more than 9.9% of the
outstanding Shares, except in each case under certain circumstances. This
summary is qualified in its entirety by reference to the complete text of the
Confidentiality Agreement, which has been filed as Exhibit (e)(3) hereto and is
incorporated herein by reference.

On December 18, 2000, the Company and Tyson entered into a confidentiality
agreement (the "Second Confidentiality Agreement"), a copy of which is filed as
an exhibit to the Schedule TO, pursuant to which the Company agreed to keep
confidential certain information it and its advisors may receive from Tyson and
its advisors in connection with the Company's evaluation of a potential
transaction. The Second Confidentiality Agreement is substantially similar to
the Confidentiality Agreement, except that the Second Confidentiality Agreement
contains no restrictions on the Company's right to make acquisitions of Tyson's
stock. This summary is qualified in its entirety by reference to the complete
text of the Second Confidentiality Agreement, which has been filed as Exhibit
(e)(5) hereto and is incorporated herein by reference.

CERTAIN EMPLOYMENT AND BENEFITS ARRANGEMENTS.

Company Stock Options. The Merger Agreement provides that at or immediately
prior to the Effective Time, (1) each employee stock option or director stock
option to purchase outstanding Shares under any stock option plan of the
Company, whether or not vested or exercisable (each, a "Company Option") will,
by virtue of the Merger and without any further action on the part of any
holder thereof, be assumed by Tyson and deemed to constitute an option (each, a
"Tyson Option") to acquire, on the same terms and conditions as were applicable
under such Company Option, the same number of shares of Tyson Class A Common
Stock as the holder of such Company Option would have been entitled to receive
had such holder exercised such Company Option in full immediately prior to the
Effective Time (rounded to the nearest whole number), at a price per share
(rounded down to the nearest whole cent) equal to (x) the aggregate exercise
price for the Shares otherwise purchasable pursuant to such Company Option
divided by (y) the number of whole shares of Tyson Class A Common Stock
purchasable pursuant to the Tyson Option in accordance with the foregoing and
(2) Tyson will assume the obligations of the Company under the stock option
plans of the Company, each of which will continue in effect after the Effective
Time, and all references to the Company in such plans, and any option granted
thereunder, will be deemed to refer to Tyson, where appropriate. The other
terms of each such Company Option, and the plans under which they were issued,
will continue to apply in accordance with their terms.

Under the Merger Agreement, prior to the effective time of the Merger, the
Company will use its reasonable best efforts to (i) obtain any consents from
holders of Company Options and (ii) make any amendments to the terms of such
stock option plans of the Company that, in the case of either clauses (i) or
(ii), are necessary or appropriate to give effect to the above transactions;
provided, however, that lack of consent of any holder of a Company Option will
in no way affect the obligations of the parties to consummate the Merger.

3
<PAGE>

In the Merger Agreement, Tyson will agree to take, at or prior to the
Effective Time of the Merger, all corporate action necessary to reserve for
issuance a sufficient number of shares of Tyson Class A Common Stock for
delivery upon exercise of the Tyson Options. The Merger Agreement provides that
Tyson will agree to file a registration statement on Form S-8, with respect to
the shares of Tyson Class A Common Stock subject to such Tyson Options and will
use commercially reasonable efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such Tyson Options remain
outstanding. With respect to those individuals who subsequent to the Merger
will be subject to the reporting requirements under Section 16(a) of the
Exchange Act, Tyson will administer the Company stock option plans in a manner
consistent with the exemptions provided by Rule 16(b)(3) promulgated under the
Exchange Act.

Employee Matters. Pursuant to the Merger Agreement, Tyson has agreed that,
subject to applicable law, the Surviving Corporation and its subsidiaries will
provide benefits to their employees which will, in the aggregate, be comparable
to those currently provided by Tyson and its subsidiaries to their employees;
provided, however, that this obligation will not apply to any employees
represented for purposes of collective bargaining.

Director and Officer Liability. For six years after the Effective Time, Tyson
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 of the
Merger Agreement; subject to any limitation imposed from time to time under
applicable law. In addition, for six years after the Effective Time, Tyson 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 officer and director 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 of the Merger Agreement, 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 Tyson will cause the Surviving
Corporation to provide only such coverage as shall then be available at an
annual premium equal to 200% of such rate.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

Item 4(a) of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

(a) Recommendation of the Board.

The Board of Directors (the "Board" or the "Board of Directors") of the
Company, at a meeting held on January 1, 2001, upon the recommendation of a
special committee of the Board (the "Special Committee"), unanimously
determined that the Merger Agreement and the transactions contemplated thereby,
including the Offer, the Exchange Offer and the Merger, taken together, and the
termination of the Rawhide Agreement, are fair to and in the best interests of
the Company and holders of Shares, approved the Merger Agreement and
transactions contemplated thereby, including the Offer, Exchange Offer and the
Merger, and exempted the Merger Agreement and the transactions contemplated
thereby from the restrictions of Section 203 of the DGCL. The Board unanimously
recommends that the holders of Shares accept the Offer and tender their shares
pursuant to the Offer.

(b)(i) Background of the Offer; Contacts with Tyson.

Item (4)(b)(i) of the Schedule 14D-9 is hereby amended and supplemented by
adding the following thereto:

During the course of its discussions with representatives of the Special
Committee after Tyson had made its initial proposal to acquire the Company for
$26.00 per Share, Smithfield stated that it would only submit a higher offer if
the Special Committee agreed to negotiate with Smithfield on an exclusive basis
or if there were a procedure in place which solicited best and final bids from
both Tyson and itself on a "blind" basis. The Special

4
<PAGE>

Committee determined that it was not in the best interests of shareholders to
negotiate with Smithfield on an exclusive basis, but that it would facilitate
the maximization of shareholder value to receive a higher bid from Smithfield.
For that reason, the Special Committee decided that the best strategy for
inducing a higher bid from Smithfield was to solicit best and final bids from
both Smithfield and Tyson. On December 21, 2000, J.P. Morgan Securities Inc.
("J.P. Morgan"), the financial advisor to the Special Committee, at the
direction of the Special Committee, sent a letter to each of Smithfield and
Tyson requesting that they each submit their best and final bids, along with
proposed contracts, between 4:00 P.M. and 5:00 P.M. on December 29, 2000, with
such offers to remain open until 9:30 A.M. on January 2, 2001. The letter
stated that the Special Committee would not disclose the price proposed to be
paid by either bidder to the other bidder.

Prior to sending the request to Tyson and Smithfield, the Special Committee's
advisors contacted DLJ and asked whether Rawhide intended to submit another
offer, as permitted by the Rawhide Agreement, if the Company gave notice of its
intention to terminate the Rawhide Agreement for a superior transaction. DLJ
informed the Special Committee that it did not intend to submit another offer
and that it would waive the three business day period in which it could do so,
provided that it was paid the termination fee and expenses provided for in the
Rawhide Agreement as soon as practicable following termination.

Between December 21 and December 29, due diligence, negotiations and
discussions continued with each of Smithfield and Tyson regarding their
respective proposals and contracts. On December 27, 2000, members of management
of each of Smithfield and Tyson made presentations to the Special Committee by
separate conference calls, each describing its business and prospects and
making its case for the superiority of its offer.

On December 28, 2000, Tyson publicly announced that it was increasing its
proposal to $27.00 per share but that it would not participate in a blind
bidding process and sent the following letter to the Special Committee:

December 28, 2000

Special Committee of the Board of Directors of IBP, inc.
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, SD 57049

Re: Tyson Foods, Inc. and IBP, inc.

Ladies and Gentlemen:

We have received the letter of JP Morgan dated December 21, 2000, inviting
Tyson Foods, Inc. to submit a proposal with respect to the acquisition of IBP,
inc. Thank you for your invitation. I am confident that this proposal will
result in an agreement to bring Tyson and IBP together to form a unique
company.

In response to the Special Committee's request, Tyson is increasing its offer
to acquire IBP to $27.00 per share. This is clearly the best offer for IBP
stockholders and represents a premium of 8% over Smithfield's $25.00 nominal
offer, and a much higher premium to any Smithfield offer after applying a
realistic discount of at least 10% for regulatory uncertainty and significant
timing delays. We will increase our tender offer to $27.00 in cash per share
for up to 50.1% of the outstanding IBP common stock and will acquire the
remaining IBP common stock for $27.00 of Tyson Class A common stock, subject to
our "collar". IBP stockholders will receive $27.00 of Tyson Class A common
stock so long as the average closing price per share of Tyson Class A common
stock, for a period of fifteen trading days, is no less than $12.60 and no more
than $15.40 per share. Our bid will remain open until the close of business on
Thursday, January 4, 2001, five business days before the expiration date of our
cash tender offer.

We are also improving the other terms of our proposal. We are delivering to
your lawyers a copy of the merger agreement executed by Tyson. In this
agreement we have addressed your lawyers' comments and have

5
<PAGE>

added features that demonstrate our commitment to getting a transaction
completed with certainty and speed. Here are the most significant points:

--We will not require a break-up fee. We will only require that IBP pay us
$7.5 million to cover our expenses and repay the Rawhide advance if the
merger agreement is terminated under circumstances which would have
previously entitled us to a break-up fee.

--As you requested, we will take all actions necessary to gain regulatory
approval for a Tyson/IBP combination. We will assume all the risk of anti-
trust authorities prohibiting or imposing significant conditions on a
Tyson/IBP combination. To support that commitment, we will agree to pay a
break-up fee of $70 million to IBP if Tyson does not complete the
acquisition because of constraints imposed by the anti-trust authorities.

--To deliver the stock consideration of our proposed transaction as quickly
as possible, we will commence an exchange offer for all shares not
purchased in the cash tender offer. We will commence our exchange offer
promptly after you sign a merger agreement. This will deliver the back-end
portion of the consideration to your stockholders at least two to three
months earlier than if they had to wait for us to complete a merger.

--We will agree to your request to advance the Rawhide break-up fee on
terms substantially similar to those suggested by your lawyers.

We note that the Department of Justice has made a second request with respect
to our HSR filing. However, we had active discussions with the DOJ with respect
to certain limited matters prior to the holiday season. We expect to be able to
answer quickly the DOJ's concerns and be cleared of all HSR issues without
undue delay.

We appreciate the Special Committee's efforts to bring this process to a
speedy and final conclusion. However, submitting blind bids after the market
closes on New Year's weekend changes the rules in the middle of the process.
The bidding for IBP began in public when Smithfield announced its proposal. We
also responded publicly and will be making our new proposal public. We believe
it is inappropriate to now move the bidding behind closed doors without the
opportunity for the marketplace to react to the various bids. A closed process
has already once produced an anemic offer that, in hindsight, could have been
higher and was sharply criticized by your stockholders and the marketplace.
That contract cost IBP stockholders a substantial break-up fee. You should not
want to repeat such a process.

A public process will only benefit IBP's stockholders and the Special
Committee in their effort to evaluate competing bids. You will recall that
Smithfield's stock price declined significantly after announcing its original
proposal in November and continued to trade below the collar as long as the
market saw Smithfield as the only bidder. If Smithfield were to increase its
nominal bid, we believe that the market would then again dramatically revalue
Smithfield's stock to reflect a reduced value based on the issuance of
additional shares, resulting in a dramatic adjustment in the actual value of
Smithfield's bid. Accordingly, any bid submitted by Smithfield should be either
discounted substantially or announced publicly along with its material terms. A
public process provides marketplace feedback necessary for proper evaluation by
the Special Committee.

Although we are choosing not to participate in the blind bidding process, we
remain the bidder with the best terms and in the best position to close
quickly. We are confident that the market will agree with this view. We are
intent on acquiring IBP in a transaction that is mutually beneficial to your
shareholders and ours, but will now only consider future bids against a known
offer, one in which all of the merger terms are fully described. If, however,
you choose to exclude Tyson by committing to a transaction with Smithfield
behind closed doors and without the benefit of marketplace feedback, we will
have no choice but to take our proposal directly to IBP's stockholders and let
them decide between Tyson and Smithfield. We would be forced to challenge any
arrangement you agree to with Smithfield which includes a break-up fee.

Upon reflection, we believe you will see that our proposal and the manner in
which it is presented will deliver superior value to IBP stockholders. Our
challenge to you is to act for the benefit of all stockholders and not
acquiesce in granting any break-up fees which deprive stockholders of
significant value. If Smithfield is not prepared to participate in the
spotlight of publicity, you should sign an agreement with us because our offer
is clearly superior. We are not asking for a break-up fee and Smithfield can
publicly bid later if it so chooses.

6
<PAGE>

I look forward to hearing from you and to moving forward on bringing our two
great companies together.

Very truly yours,

John H. Tyson
Chairman, President and
Chief Executive Officer

On December 29, 2000, Tyson filed an Amended Schedule TO with the SEC which
summarized the terms of its revised offer and included its proposed contract.

Following the close of trading on December 29, 2000, Smithfield submitted a
revised proposal to the Special Committee for a merger in which each Share
would be converted into $30.00 per share in Smithfield stock, subject to a
maximum exchange ratio of 1.051 and a minimum exchange ratio of 0.905. In
conjunction with the letter outlining its revised proposal, Smithfield
delivered a draft merger agreement which provided for, among other things, a
termination fee of $50,000,000 plus expenses of up to $7,500,000 payable by
either party terminating the agreement for a superior offer, a $10,000,000 fee
payable to the Company if the agreement was terminated due to a failure to
receive either antitrust approval or Smithfield shareholder approval, and a
commitment by Smithfield to use "reasonable best efforts" to obtain necessary
regulatory approval. The Smithfield proposal also contemplated certain
commitments with respect to divestitures. Smithfield's draft agreement did not
provide for the advancement of the termination fee payable to Rawhide to
terminate the Rawhide Agreement (the "Rawhide Termination Fee") and conditioned
Smithfield's obligation to consummate the transaction on its receipt of an
opinion from its independent public accountants that the proposed merger
qualified for pooling-of-interests accounting treatment. The draft merger
agreement also contemplated that the Company would implement a rights plan in
connection with the execution of the merger agreement. Smithfield stated that
its proposal was conditioned upon the Special Committee and the Company not
disclosing the details of the proposal to any third party, including Tyson or
Rawhide, or the media. Smithfield further stated that its offer would expire at
6 P.M. on December 30, 2000.

On the morning of December 30, 2000, the Special Committee discussed with its
advisors the Tyson and the Smithfield proposals. J.P. Morgan provided the
Special Committee with its analysis of the relative values of the offers. The
Special Committee determined that it would ask each bidder to improve its
proposal. The Special Committee authorized Jo Ann Smith, chairperson of the
Special Committee, together with the Special Committee's advisors, to ask
Smithfield to increase the price proposed to be paid in its offer and to
provide a higher degree of certainty as to value by including a cash component,
broadening the collar, or providing contingent value rights. It was also
determined that Smithfield should be asked to improve the contractual terms of
its proposal to, among other things, provide greater certainty of consummation.
Ms. Smith and the Special Committee's advisors conveyed this message to
Smithfield and its advisors by telephone immediately following the Special
Committee meeting. The Special Committee also authorized Ms. Smith, together
with the Special Committee's advisors, to ask Tyson to improve the price it
proposed to pay and provide a higher degree of certainty as to value through a
broadening of the collar, and Ms. Smith and the Special Committee's advisors
conveyed the message to Tyson and its advisors by telephone early in the
afternoon of December 30th.

Tyson responded that it would not submit another bid unless it was told the
details of Smithfield's bid or given some guidance as to a price the Special
Committee would find acceptable.

Smithfield and its advisors contacted Ms. Smith and the Special Committee's
advisors and stated that $30.00 per Share in the form presented previously was
its best and final offer. Smithfield stated that it was willing to improve its
offer by agreeing to accept some restrictions on the conduct of its business
that regulatory authorities might impose in connection with the merger, to drop
pooling accounting treatment as a condition to the merger, and to increase the
termination fee payable to the Company in the event the agreement was
terminated due to a failure to receive either antitrust approval or Smithfield
shareholder approval to $15,000,000.

Following these conversations, the Special Committee reconvened, and Ms.
Smith and the Special Committee's advisors described for the Special Committee
the responses to the Special Committee's requests for

7
<PAGE>

improved bids. The Special Committee determined that in order to solicit
another offer from Tyson, it would give Tyson a target price which the Special
Committee would consider superior to the Smithfield offer and indicate that it
would be prepared to proceed with Tyson to negotiate a definitive contract.

Based on, among other things, J.P. Morgan's analysis of market sensitivity
and volatility and time value differences, the Special Committee concluded that
if Tyson increased its bid to $28.50 per Share, 50% of which would be paid in a
cash tender offer and 50% of which would be paid in Tyson stock in an exchange
offer, subject to a collar, such a transaction would have greater current value
and greater certainty than the Smithfield $30 per share all stock proposal.

Ms. Smith and the Special Committee's advisors conveyed the target price of
$28.50 per Share to Tyson following the meeting. Shortly thereafter, Tyson said
that it would raise its bid to the target price proposed by the Special
Committee, and the parties agreed to work that evening and the next morning to
resolve the remaining contractual issues and to finalize the documentation,
with the Special Committee and the full Board meeting thereafter to consider
the transaction.

In the early evening of December 30th, representatives of the Special
Committee contacted Smithfield and its advisors and informed them that the
Special Committee had determined to go "in a different direction."

On the morning of December 31, 2000, Smithfield delivered a letter to the
Special Committee in which it increased its offer to $32.00 per Share payable
in Smithfield stock. Smithfield stated that the revised offer was conditioned
on the Special Committee not divulging the details of its revised offer and
stated that the offer would expire at noon on January 1, 2001. Smithfield
orally advised the Special Committee that the bottom end of its collar would be
lowered to $28.12 per Smithfield share.

Early in the afternoon of December 31st, the Special Committee met to
consider the new Smithfield proposal. The Special Committee determined that it
would advise Tyson that Smithfield had submitted a revised proposal on an
unsolicited basis which increased its prior offer by $2.00 per Share in stock,
and Ms. Smith and the Special Committee's advisors relayed this message to
Tyson.

In the afternoon of December 31st, Tyson informed the Special Committee that
it would submit a proposal in response to the new Smithfield proposal at 9 A.M.
on January 1, 2001, but only if the Special Committee committed to definitively
accept or reject the proposal by 11 A.M. on January 1, 2001 and agreed to have
no communication with Smithfield until such time. The Special Committee met
early in the evening of December 31st and agreed to receive Tyson's proposal on
January 1st on Tyson's timetable and subject to its restriction on
communicating with Smithfield. The Special Committee concluded that its failure
to do so or to agree to Tyson's other terms for submission of its new proposal
ran the unacceptable risk that Tyson would not submit its proposal, thereby
possibly depriving the Company's shareholders of what could be a Tyson bid
providing greater value than the latest Smithfield offer. The Special Committee
noted that if Tyson did not make an acceptable improvement in its proposal, it
would still have the option of accepting Smithfield's latest offer. In
addition, the terms of Tyson's proposals to that point had not contained any
provisions which would be impediments to further bids by Smithfield.

At 9 A.M. on January 1, 2001, Tyson submitted a bid of $30.00 per Share on
the same terms as had previously been proposed, except for the addition of a
$15,000,000 termination fee. Immediately thereafter the Special Committee met,
along with its advisors, to consider the revised Tyson proposal. At this
meeting the Special Committee, together with its advisors, reviewed the updated
Smithfield and Tyson proposals. J.P. Morgan and Peter J. Solomon Limited
("Peter J. Solomon") gave presentations on the financial aspects of the
proposals, and each of J.P. Morgan and Peter J. Solomon orally delivered its
opinion to the Special Committee that, as of such date, and based upon and
subject to certain matters and assumptions, the consideration to be received by
Company shareholders pursuant to the Tyson $30.00 per Share offer was fair from
a financial point of view to such holders. As more fully described in Item
4(b)(ii) below, representatives of J.P. Morgan also stated that in the
scenarios they saw as most likely, Tyson's proposal would have more current
value than the Smithfield proposal. Following such presentations and the
receipt of such opinions, the Special Committee unanimously determined to
recommend the Tyson offer to the full Board.

8
<PAGE>

Following the Special Committee meeting, the full Board met, along with the
Special Committee's advisors. The Special Committee's legal and financial
advisors reviewed the Smithfield and Tyson proposals for the full Board. The
Special Committee's financial advisors reiterated their opinions as to the
fairness of the consideration to be received by Company shareholders pursuant
to the Tyson offer from a financial point of view to such holders. J.P.
Morgan's representatives repeated their advice that in the scenarios they saw
as most likely, the Tyson proposal would have more current value than the
Smithfield proposal. Following such presentations, the full Board unanimously
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer, the Exchange Offer and the Merger, and resolved to
recommend that the stockholders of the Company accept the Offer and the
Exchange Offer and tender their shares to Purchaser.

Following the Board meeting, the Company advised Tyson of the actions taken
by the Special Committee and the Board and notified Rawhide that it was
terminating the Rawhide Agreement. The definitive Merger Agreement was
executed at 11 A.M. on January 1, 2001. Press releases announcing the
transaction were issued in the afternoon of January 1, 2001.

On January 4, 2001, Smithfield filed Amendment No. 4 to Schedule 13D with
the Commission, in which it disclosed that it had sold 2,555,000 shares of IBP
Common Stock on January 2 and 3, thus reducing the number of shares of IBP
Common Stock that it beneficially owns to 4,409,341, representing
approximately 4.2% of the outstanding shares of IBP Common Stock.

Item 4(b)(ii) of the Schedule 14D-9 is hereby retitled and restated to read
in its entirety as follows:

(b)(ii) Reasons for the Recommendation of the Special Committee and the
Board.

In reaching their recommendations described above in paragraph (a) of this
Item 4, the Special Committee and the Board of Directors considered a number
of factors, including the following:

J.P. Morgan Analysis. In comparing the Tyson $30.00 per Share proposal and
the Smithfield $32.00 per Share proposal, the Special Committee and the Board
considered the presentation by J.P. Morgan with respect to the relative value
of the two proposals. This presentation included an analysis of the time value
of money using the face value of the two proposals. The time value analysis
considered different scenarios in respect of each proposal hypothesizing a
range of time frames for the receipt of the consideration by the Company's
shareholders. These scenarios were arrived at based in part upon discussions
with representatives of and advisors to each of Tyson and Smithfield regarding
their regulatory issues.

In addition, the Special Committee and the Board considered a sensitivity
analysis performed by J.P. Morgan which analyzed the relative value of the two
proposals, using the mid-point deal-timing scenarios of the time value
analysis, assuming different levels of decline in the share prices of Tyson
and Smithfield and taking into account the fact that half of the consideration
to be paid under the Tyson proposal would be cash. J.P. Morgan focused its
analysis on a range of potential declines for each of Tyson stock and
Smithfield stock, which range of potential declines was greater in the case of
Smithfield than in the case of Tyson. In making this judgment, J.P. Morgan
took into account a number of factors which it reviewed with the Special
Committee and the Board, including the relative historical performance of
Tyson stock and Smithfield stock, including historical stock price volatility,
the reaction of the market to the initial Smithfield proposal for the Company
and the reaction of the market to each of the publicly announced Tyson
proposals for IBP, the pro forma dilutive/accretive impact of the offers on
each of Tyson and Smithfield both with and without anticipated synergies, the
comparative effect on the float and volume of the securities of Tyson and
Smithfield, the pro forma effect of a transaction with IBP on each of Tyson's
and Smithfield's trading multiples, analyst ratings, outlook and comments
regarding a combination with IBP, projections of financial performance
provided by the management teams of Tyson and Smithfield compared to analyst
consensus for Tyson and Smithfield and the fact that it was anticipated that
the Smithfield transaction would take a longer time to consummate. In light of
these factors, the Special Committee and the Board did not believe it would be
prudent in assessing the relative values of the two proposals to assume near
term price increases for either Tyson or Smithfield above the high end of
their respective collars ($15.40 per share in the case of Tyson, and $33.15
per share in the case of Smithfield). Based upon these analyses,

9
<PAGE>

J.P. Morgan advised the Special Committee and the Board that in the scenarios
it saw as most likely, the Tyson proposal would have more current value than
the Smithfield proposal, and the Special Committee and the Board considered
these analyses in assessing the proposals.

Timing and Probability of Completion. The Special Committee and the Board
considered the anticipated timing of consummation of the transactions
contemplated by the Merger Agreement, including the structure of the
transactions as a tender offer for 50.1% of the Shares and an exchange offer
for the remainder of the Shares, which should allow stockholders to receive
the cash and stock consideration earlier than the stock merger proposed by
Smithfield. The Special Committee and the Board considered that the estimated
time frame for completing the Tyson transaction was much shorter than the
estimated time frame for the Smithfield transaction, thus subjecting the
transaction to a lesser degree of risk for elements such as material adverse
changes. The Special Committee and the Board considered the anticipated
regulatory delays, including the fact that a transaction with Smithfield would
likely be subject to greater regulatory scrutiny and delay than a transaction
with Tyson. The Special Committee concluded that there were no significant
regulatory issues presented by the Tyson proposal and noted that Tyson had
agreed to take all actions necessary to gain regulatory approval and was
willing to pay to the Company a $70,000,000 "reverse termination fee" if the
transaction could not be completed because antitrust approval could not be
obtained. The Special Committee concluded that there were substantive
antitrust issues presented by a combination with Smithfield, and that while
Smithfield had indicated a willingness to undertake certain divestitures and
agree to some restrictions on the conduct of its business to address those
issues, and the Special Committee believed that such divestitures and
agreements should result in a successful resolution of those issues, the
Special Committee nevertheless concluded that there would likely be
significant political opposition to a transaction with Smithfield, introducing
a further element of uncertainty as to ultimate consummation and timing. In
addition, Smithfield was only willing to commit to a $15 million termination
fee if its transaction could not be completed because antitrust approval could
not be obtained.

Other Consummation Risk. The Special Committee and the Board considered the
relative consummation risk inherent in the Tyson and Smithfield proposals
separate and apart from the political and regulatory risk of non-consummation
described above. Tyson's obligation to consummate the Offer, the Exchange
Offer and the Merger is subject to a limited number of conditions, with no
financing condition and the Tyson shareholder approval is assured as a result
of a voting agreement with its principal shareholder. By contrast, the
Smithfield proposal was conditioned upon Smithfield shareholder approval,
although Smithfield was willing to pay the Company $15,000,000 if Smithfield
shareholder approval was not obtained and $50,000,000, plus up to $7,500,000
million in expenses, if such approval was not obtained as a result of a
superior proposal to acquire Smithfield.

Subsequent Proposals. The Special Committee and the Board considered that
under the terms of the Merger Agreement, although the Company is prohibited
from soliciting acquisition proposals from third parties, the Company may
engage in discussions or negotiations with, and may furnish non-public
information to, a third party who makes a bona fide acquisition proposal that
the Special Committee determine in good faith (after consultation with a
financial advisor of national reputation and taking into account all the terms
and conditions) is likely to result in a proposal which is more favorable from
a financial point of view than the transactions contemplated by the Merger
Agreement and is reasonably capable of being completed. The Special Committee
and the Board considered that the terms of the Merger Agreement permit the
Company to terminate the Merger Agreement to enter into such a superior
transaction involving the Company if, among other things, (i) the Company
gives Tyson at least three business days' notice in writing that it intends to
enter into an agreement for such superior transaction, (ii) Tyson is permitted
to make a new offer, which will be considered by the Special Committee in good
faith and (iii) the Company pays Tyson a $15,000,000 termination fee as well
as reimbursing the amounts advanced to the Company by Tyson to pay the Rawhide
Termination Fee and paying Tyson $7,500,000 as reimbursement for its expenses.
The Special Committee and the Board considered that these provisions of the
Merger Agreement were unlikely to deter third parties who might be interested
in exploring an acquisition of the Company. The Special Committee and the
Board considered that, by contrast, Smithfield requested a $50,000,000
termination fee plus up to $7,500,000 in expenses and was unwilling to advance
the Company the funds necessary to pay the termination fee and reimburse
expenses under the Rawhide Agreement.

10
<PAGE>

Fairness Opinions. The Special Committee and the Board considered
presentations from J.P. Morgan and Peter J. Solomon and the opinions of J.P.
Morgan and Peter J. Solomon, dated January 1, 2001, that, based upon and
subject to certain considerations and assumptions, the amended purchase price
and exchange ratio to be received by holders of Shares pursuant to the Merger
Agreement is fair from a financial point of view to such holders. Copies of
each of the opinions rendered by J.P. Morgan and Peter J. Solomon to the
Special Committee, setting forth the procedures followed, the matters
considered and the assumptions made by each of J.P. Morgan and Peter J. Solomon
in arriving at its opinion, are attached as Annexes A and B hereto,
respectively, and incorporated herein by reference. Stockholders are urged to
read these opinions in their entirety. The Special Committee and the Board were
aware that J.P. Morgan becomes entitled to certain fees described in Item 5
upon the consummation of the Offer.

Transaction Financial Terms/Premium. The Special Committee and the Board
considered the relationship of the Offer Price and the Merger Consideration to
the historical market prices of the Shares and to the price in the Rawhide
Agreement. The Offer Price represents a 34.8% premium over the $22.25 per share
price in the Rawhide Agreement. The Special Committee and the Board also
considered the form of consideration to be paid to holders of Shares in the
Offer and the Merger, and the certainty of value of such cash consideration
compared to stock consideration. The Special Committee and the Board were aware
that the Board of Directors' fiduciary duty to IBP shareholders had changed as
a result of the decision to enter into the Rawhide Agreement from the
preservation of IBP as a corporate entity to the maximization of IBP's current
value at a sale for the shareholders' benefit. The Special Committee and the
Board determined that both the Tyson proposal and the Smithfield proposal
provided substantially greater value than the Rawhide Agreement. The Special
Committee and the Board were aware that the cash consideration received by the
holders of Shares in the Offer would be taxable to such holders for federal
income tax purposes.

Potential Conflicts of Interest. The Special Committee and the Board were
aware of the potential conflicts of interest between the Company, on the one
hand, and certain of the Company's officers, director or affiliates, on the
other hand, in the Offer, the Exchange Offer and the Merger (as described under
Item 3 above).

The foregoing includes the material factors considered by the Special
Committee and the Board. In view of its many considerations, the Special
Committee and the Board did not find it practical to, and did not, quantify or
otherwise assign relative weights to the various individual factors considered.
In addition, individual members of the Special Committee and the Board may have
given different weights to the various factors considered. After weighing all
of these considerations, the Special Committee unanimously determined to
recommend the Merger Agreement to the Board and the Board unanimously
determined to approve the Merger Agreement and the transactions contemplated
thereby and recommend that holders of Shares tender their Shares in the Offer.

The Schedule 14D-9 is hereby amended and supplemented by adding the following
Items 4(b)(iii) and (iv):

(iii) Opinion of Financial Advisor--J.P. Morgan

Pursuant to an engagement letter dated July 21, 2000, the Special Committee
retained J.P. Morgan to act as the Special Committee's financial advisor in
connection with a proposed transaction. At the Special Committee meeting on
January 1, 2001, 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, each of the Offer Price to be paid in the
Offer and the exchange ratio proposed in the Exchange Offer and Merger is fair,
from a financial point of view, to the IBP stockholders.

We have attached as Annex A to this Statement and have incorporated by
reference the full text of the written opinion of J.P. Morgan dated January 1,
2001, which sets forth the assumptions made, matters considered and limits on
the review undertaken. We urge you to read the opinion in its entirety. The
summary of the opinion of J.P. Morgan set forth in this document 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 Offer, the
Exchange Offer and the Merger (the "Transaction") and does not constitute a
recommendation to any stockholder as to how to vote or whether to tender with
respect to the Transaction.

11
<PAGE>

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

. the Offer to Purchase, dated December 12, 2000;

. the Merger Agreement;

. certain publicly available information concerning the business of the
Company, Tyson 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 and Tyson Class
A 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
September 30, 2000;

. Tyson's audited financial statements for the fiscal year ended October
2, 2000; and Tyson's unaudited financial statements for the period ended
July 1, 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 held discussions with certain members of the
management of IBP and Tyson with respect to certain aspects of the Transaction,
and IBP's and Tyson's past and current business operations, IBP's and Tyson's
financial condition and future prospects and operations, the effects of the
Transaction on IBP's and Tyson'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 Tyson 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 of any assets or liabilities, and no such valuations or appraisals
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 and Tyson's management as to the expected future results of IBP's and
Tyson's operations and IBP's and Tyson's financial condition to which such
analyses or forecasts relate. J.P. Morgan also assumed that the Transaction
will have the tax consequences described in discussions with, and materials
furnished to J.P. Morgan by, Tyson and IBP's representatives, and that the
other transactions contemplated by the Merger Agreement 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 familiar with the terms of an
alternative merger transaction with the Company proposed by Smithfield
concurrently with the negotiation of the Tyson transaction and that it
participated in negotiations with respect to such alternative transaction. J.P.
Morgan noted that it took such facts into account in rendering its opinion.

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 January 1, 2001. 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. J.P. Morgan's opinion
expressed no opinion as to the price at which the Tyson Class A Common Stock
will trade at any time.

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.

12
<PAGE>

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 (the date of announcement of the Rawhide Agreement), 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 DLJ's first indicative offer to purchase the
Company) until September 29, 2000, outperformed the stocks of
Smithfield, Hormel Foods Corporation, ConAgra Foods, Inc., Tyson,
Pilgrim's Pride Corporation and Sanderson Farms, as well as the S&P 500
index. Specifically, IBP's Common Stock appreciated 20.6% over this
period while the S&P 500 was down 1.6%. The stock prices of Smithfield,
Hormel Foods Corporation, ConAgra Foods, Inc. and Tyson 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 Common Stock generally followed the trend of an index
comprised of the equally weighted stock prices of Pilgrim's Pride
Corporation, Sanderson Farms, WLR Foods Inc., Cagle's, Smithfield,
Hormel Foods Corporation, ConAgra Foods, Inc. and Tyson.

. 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 Common Stock performed in line with an index comprised
of the equally weighted stock prices of Pilgrim's Pride Corporation,
Sanderson Farms, WLR Foods Inc., Cagle's, Smithfield, Hormel Foods
Corporation, ConAgra Foods, Inc. and Tyson.

. J.P. Morgan also found that in the period from October 1, 2000 until
December 29, 2000 (the last trading date prior to the announcement of
the Transaction), IBP's stock price ranged between $20.1875 and $26.75
per share.

. J.P. Morgan also pointed out that in the period from October 1, 2000
until December 29, 2000, the common stocks of Smithfield, Hormel Foods
Corporation, ConAgra Foods, Inc., Tyson, Pilgrim's Pride Corporation,
Sanderson Farms, WLR Foods Inc. and Cagle's appreciated between 3.2% and
29.6% while the S&P 500 index declined 8.1%.

. J.P. Morgan also noted that in the period from December 4, 2000 (the
first trading date after Tyson publicly announced its proposal to
acquire IBP for $26 per Share) until December 29, 2000 (the last trading
date prior to the announcement of the Tyson transaction and the trading
day following Tyson's public announcement of its intention to acquire
IBP for $27 per Share) Tyson's closing stock price ranged between $11.75
and $12.75 per share. J.P. Morgan also noted that the intraday low
reached by Tyson's Class A Common Stock over such period was $10.8125.
J.P. Morgan also highlighted that Tyson Class A Common Stock closed at
$12.75 on December 28, 2000 and December 29, 2000 and that Tyson made a
public announcement regarding its intention to acquire IBP for $27 per
Share after the market close on December 28, 2000.

Analysis of Premium. J.P. Morgan calculated the premium implied by $30 per
Share relative to certain base prices.

The table below sets forth J.P. Morgan's premium analysis:

<TABLE>
<CAPTION>
Base Premium
Description of base Price implied by $30
------------------- ------ --------------
<S> <C> <C>
DLJ's first offer (August 9)......................... $15.19 97.5%
Last trading day before announcement of Rawhide
Agreement (Sept. 29)................................ 18.31 63.8%
1 year prior(/1/) average............................ 17.13 75.1%
1 year prior(/1/) high............................... 25.00 20.0%
3 year prior(/1/) high............................... 29.25 2.6%
1 year prior(/1/) low................................ 11.19 168.2%
3 year prior(/1/) low................................ 11.19 168.2%
</TABLE>
--------
(/1/)All periods prior to October 1, 2000

13
<PAGE>

J.P. Morgan noted that the premium analysis does not constitute a valuation
technique as such, but serves as a comparison of the proposed transaction 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. These projections were provided to both Tyson and
Smithfield. IBP does not as a matter of course make public forecasts as to
future revenues, earnings or other financial information, and the projections
were not prepared with a view to public disclosure.

The following table sets forth the summary of these projections:

<TABLE>
<CAPTION>
2000 2001 2002 2003 2004 2005
------- ------- ------- ------- ------- -------
$ millions (except per share and per head
information)
<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).. $ 634 $ 647 $ 759 $ 850 $ 938 $ 1,018
% margin................ 3.8% 3.7% 4.2% 4.6% 5.0% 5.2%
Earnings Before Interest
and Taxes (EBIT)....... $ 473 $ 446 $ 543 $ 619 $ 693 $ 760
% margin................ 2.8% 2.6% 3.0% 3.3% 3.7% 3.9%
Net Income.............. $ 200 $ 212 $ 277 $ 332 $ 388 $ 439
Earnings Per Share
(EPS).................. $ 2.21 $ 1.98 $ 2.58 $ 3.10 $ 3.61 $ 4.09
Capital expenditures.... $ 453 $ 331 $ 300 $ 300 $ 300 $ 300
Beef EBIT/head.......... $ 24.8 $ 16.5 $ 15.0 $ 16.5 $ 16.5 $ 17.5
Pork EBIT/head.......... 3.9 4.8 4.8 4.8 4.8 4.8
Total Fresh Meats EBIT.. 420 309 362 391 420 462
Foodbrands EBIT......... 53 137 181 228 273 297
</TABLE>

The management projections were not prepared with a view to public disclosure
or compliance with published guidelines of the Commission or the American
Institute of Certified Public Accountants regarding prospective financial
information. In addition the management projections were not prepared with the
assistance of or reviewed, compiled or examined by independent accountants. The
management 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. Accordingly, there can
be no assurance that the assumptions made in preparing the management
projections will prove accurate and actual results may be materially greater or
less than those contained in the management projections.

The inclusion of the management projections in this Statement should not be
regarded as an indication that IBP, Tyson or Purchaser or any of IBP's, Tyson's
or Purchaser'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 the management projections
to reflect circumstances existing after the date when prepared or to reflect
the occurrence of future events, unless required by law.

J.P. Morgan calculated the unlevered free cash flows that IBP is expected to
generate during 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

14
<PAGE>

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 $23 and $31 per Share.

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
Hormel Foods Corporation
ConAgra Foods, Inc.
Tyson

For each of these companies, J.P. Morgan measured publicly available
financial performance through the twelve months ended June 30, 2000. 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 of 6.8x to 9.4x and firm value to projected
2001 EBITDA of 6.1x to 8.2x. The analysis also showed multiples of price to
latest twelve months earnings of 12.5x to 19.0x, 2000 P/E ratios of 12.5x to
18.9x and 2001 P/E ratios of 10.0x to 16.0x. In addition, the analysis showed
multiples of equity value to book value ranging from 1.3x to 3.6x.

J.P. Morgan noted that, utilizing IBP management projections, the
Transaction implies multiples of firm value to projected 2000 EBITDA and 2001
EBITDA of 7.5x and 7.3x, respectively. In addition, J.P. Morgan noted that the
implied 2000 P/E multiple in the Transaction is 13.6x and the implied 2001 P/E
multiple is 15.2x.

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 Transaction
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
Dec-
99 Seaboard Corporation--poultry division ConAgra Foods, Inc.
Sep-
99 Tyson--pork division Smithfield
Sep-
99 Murphy Farms, Inc. Smithfield
Jul-
99 Thorn Apple Valley, Inc. IBP
Feb-
99 Carroll's Foods, Inc. Smithfield
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
Sep-
97 Hudson Foods, Inc. Tyson
Sep-
97 Golden Poultry Co., Inc. Gold Kist, Inc.
Mar-
97 Foodbrands America, Inc. IBP
Sep-
95 Cargill, Inc.--boiler and McCarty units Tyson
Jan-
94 WLR Foods, Inc. Tyson
Aug-
89 Holly Farms Corporation Tyson
</TABLE>

15
<PAGE>

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 Transaction implies multiples of
firm value to projected 2000 EBITDA of 7.5x.

Pro forma combination analysis. J.P. Morgan analyzed the pro forma impact of
the Transaction on Tyson's cash and reported earnings per share, consolidated
capitalization and financial ratios using IBP management projections for IBP
and projections developed by J.P. Morgan based on analysts consensus earnings
estimates for Tyson as reported by I/B/E/S. Incorporating assumptions with
respect to various structural considerations, transaction and financing costs
and Tyson estimated synergies, the combination was accretive to Tyson's cash
and reported earnings per share in 2001 and 2002.

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 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.

(iv) Opinion of Financial Advisor--Peter J. Solomon

PJSC has acted as financial advisor to the Special Committee in connection
with the Transaction. At the January 1, 2001 meeting of the Special Committee,
PJSC delivered its oral opinion to the Special Committee, subsequently
confirmed in a written opinion dated January 1, 2001 (the "PJSC Opinion"), to
the effect that, based upon and subject to various considerations set forth in
such opinion, as of January 1, 2001, the consideration proposed to be paid to
the holders of IBP Common Stock in the Transaction is fair from a financial
point of view to the holders of IBP Common Stock. No limitations were imposed
by the Special Committee upon PJSC with respect to investigations made or
procedures followed by PJSC in rendering the PJSC Opinion.

The full text of the PJSC Opinion, which sets forth assumptions made,
procedures followed, matters considered, limitations on and scope of the
review by PJSC in rendering the PJSC Opinion, is attached to this statement as
Annex B and is incorporated by reference herein. The PJSC Opinion is directed
only to the fairness of the consideration proposed to be paid to the holders
of IBP Common Stock in the transaction from a financial point of view, has
been provided to the Special Committee in connection with its evaluation of
the transaction, does not address any other aspect of the transaction and does
not constitute a recommendation to any holder of IBP Common Stock as to
whether or not such holder should tender any shares of IBP Common Stock in the

16
<PAGE>

offer or exchange offer or how to vote at any shareholders meeting with
respect to the merger. The summary of the PJSC Opinion set forth in this
statement is qualified in its entirety by reference to the full text of such
opinion. holders of IBP Common stock are urged to read the PJSC Opinion
carefully and in its entirety.

In connection with the PJSC Opinion, PJSC:

. reviewed certain publicly available financial statements and other
information of IBP and Tyson, respectively;

. reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the management of IBP;

. reviewed certain financial forecast information for IBP and Tyson
furnished to PJSC by the management of IBP and Tyson, respectively;

. discussed the past and current operations and financial condition of
IBP, as well as its business and prospects with management of IBP;

. reviewed the reported prices and trading activity of IBP Common Stock
and Tyson Class A Common Stock;

. compared the financial performance and condition of IBP and Tyson and
the reported prices and trading activity of IBP Common Stock and Tyson
Class A Common Stock with that of certain other comparable publicly
traded companies and their securities;

. reviewed publicly available information regarding the financial terms of
certain transactions comparable, in whole or in part, to the
Transaction;

. participated in certain discussions with representatives of IBP;

. reviewed a draft of the Merger Agreement;

. considered the terms proposed by a third party for a merger transaction
with the Company, and the negotiations relating thereto; and

. performed such other analyses and took into account such other matters
as PJSC deemed appropriate.

In arriving at the PJSC Opinion, PJSC was not authorized to solicit, and did
not solicit, interest from any party with respect to a merger or other
business combination transaction involving the Company or any of its assets.

PJSC assumed and relied upon the accuracy and completeness of the
information reviewed by PJSC for the purposes of the PJSC Opinion, and PJSC
did not assume any responsibility for independent verification of such
information. With respect to the financial forecast information, PJSC assumed
that the financial forecasts were reasonably prepared on bases reflecting the
best currently available estimates and judgments of the future financial
performance of IBP and Tyson, respectively. PJSC further assumed that the
final form of the Merger Agreement would be substantially the same as the last
draft reviewed by PJSC. PJSC did not made any independent valuation or
appraisal of the assets or liabilities of IBP or Tyson, nor was PJSC furnished
with any such valuation or appraisal. PJSC did not assume any obligation to
conduct any physical inspection of the properties or facilities of IBP or
Tyson. The PJSC opinion was necessarily based on economic, market and other
conditions as in effect on, and the information made available to PJSC as of,
January 1, 2000. Although subsequent developments may affect the PJSC Opinion,
PJSC does not have any obligation to update, revise or reaffirm its opinion.

The forecasts or projections furnished to PJSC for IBP and Tyson were
prepared by the management of IBP and Tyson, respectively. These forecasts,
projections and estimates were based on numerous variables and

17
<PAGE>

assumptions which are inherently uncertain and which may not be within the
control of the management of IBP and Tyson, including, without limitation,
general economic, regulatory and competitive conditions. Accordingly, actual
results could vary materially from those set forth in such forecasts,
projections and estimates.

The following summarizes the significant financial analyses performed by
PJSC and reviewed with the Special Committee on January 1, 2001 in connection
with the delivery of the PJSC Opinion:

IBP Common Stock Performance. PJSC reviewed the closing prices and trading
volumes of IBP Common Stock on the New York Stock Exchange from September 29,
1997 to December 29, 2000 (the last trading day prior to the announcement of
the Merger Agreement). During the period from September 29, 1997 to September
29, 2000 (the last trading day prior to the announcement of the Rawhide
Agreement), the high closing price for IBP Common Stock was $29.25 per share
and the low closing price was $11.19 per share. During the twelve months ended
September 29, 2000, the high closing price for IBP Common Stock was $25.00 per
share and the low closing price was $11.19 per share. During the period from
October 2, 2000 to December 29, 2000, the high closing price for IBP Common
Stock was $26.75 per share and the low closing price was $20.19 per share.

Tyson Common Stock Performance. PJSC reviewed the closing prices and trading
volumes of Tyson Class A Common Stock on the New York Stock Exchange from
December 29, 1997 to December 29, 2000 and Tyson's indexed price performance
from January 3, 2000 to December 29, 2000 relative to the S&P 500 Index and
IBP's indexed price performance. During the period from December 29, 1997 to
December 29, 2000, the high closing price for Tyson Class A Common Stock was
$25.38 per share and the low closing price was $8.56 per share. During the
twelve months ended December 29, 2000, the high closing price for Tyson Class
A Common Stock was $17.19 per share and the low closing price was $8.56 per
share. During the period from January 3, 2000 to September 29, 2000 (the last
trading day prior to the announcement of the Rawhide Agreement), Tyson's stock
price declined 37.7%, the S&P 500 Index declined 1.3% and IBP's stock price
appreciated 4.3%. During the twelve months ended December 29, 2000, Tyson's
stock price declined 20.6%, the S&P 500 Index declined 9.3% and IBP's stock
price appreciated 52.3%.

Analysis of Selected Publicly Traded Comparable Companies. Using publicly
available information, PJSC reviewed and compared selected financial data of
IBP with similar data of the following group of publicly traded companies
engaged in the meat processing and branded meats industry: ConAgra, Inc.;
Pilgrim's Pride Corporation; Hormel Foods Corporation; Smithfield; Tyson; and
WLR Foods, Inc. (collectively "PJSC Comparable Companies").

PJSC calculated and compared various financial multiples and ratios,
including, among other things, the stock price per share as a multiple of
estimated EPS for the calendar years 2000 and 2001, based upon EPS estimates
from First Call Investment Research as of December 29, 2000 (except for Tyson,
for which EPS estimates are from the Tyson management projections), and
enterprise value (which represents total equity value plus book values of
total debt, preferred stock and minority interests less cash) ("Enterprise
Value") as a multiple of estimated EBIT and EBITDA for calendar year 2000,
based on estimates from public equity analysts (except for Tyson, for which
estimates are from the Tyson management projections). Based on this data as of
December 29, 2000, PJSC developed (i) a range of closing stock prices to 2000
estimated EPS of 11.0x to 15.0x for the PJSC Comparable Companies compared to
13.6x for IBP at the Offer Price; (ii) a range of closing stock prices to 2001
estimated EPS of 8.5x to 13.5x for the PJSC Comparable Companies compared to
15.2x for IBP at the Offer Price; (iii) a range of Enterprise Value to 2000
estimated net sales of 20.0% to 70.0% for the PJSC Comparable Companies
compared to 28.0% for IBP at the Offer Price; (iv) a range of Enterprise Value
to 2000 estimated EBIT of 9.5x to 13.0x for the PJSC Comparable Companies
compared to 9.9x for IBP at the Offer Price; and (v) a range of Enterprise
Value to 2000 estimated EBITDA of 5.5x to 7.5x for the PJSC Comparable
Companies compared to 7.1x for IBP at the Offer Price.

Analysis of Selected Comparable Transactions. Using publicly available
information, PJSC reviewed certain mergers and acquisitions transactions in
the meat processing and branded meats industry. PJSC calculated

18
<PAGE>

the equity value paid by selected acquirors in the transactions as a multiple
of latest twelve months ("LTM") net income and the Enterprise Value paid by
selected acquirors as a multiple of LTM sales, EBIT and EBITDA. This analysis
resulted in (i) a range of equity value to LTM net income multiples of 12.0x
to 20.0x compared to an equity value to estimated 2000 net income multiple of
13.6x for IBP at the Offer Price; (ii) a range of Enterprise Value to LTM
sales multiples of 35.0% to 70.0% compared to an Enterprise Value to estimated
2000 sales multiple of 28.0% for IBP at the Offer Price; (iii) a range of
Enterprise Value to LTM EBIT multiples of 9.0x to 12.5x compared to an
Enterprise Value to estimated 2000 EBIT multiple of 9.9x for IBP at the Offer
Price; and (iv) a range of Enterprise Value to LTM EBITDA multiples of 7.0x to
9.0x compared to an Enterprise Value to estimated 2000 EBITDA multiple of 7.1x
for IBP at the Offer Price.

Discounted Cash Flow Analysis. PJSC performed a discounted cash flow
analysis to calculate the net present value per share of IBP Common Stock
based on the IBP management projections for the fiscal years (ending December)
2001 to 2004. In performing its discounted cash flow analysis, PJSC considered
various assumptions that it deemed appropriate based on a review with the
management of IBP of IBP's prospects and risks. PJSC believed it appropriate
to utilize various discount rates ranging from 9.0% to 11.0% and EBITDA
terminal value multiples ranging from 5.0x to 7.0x to apply to forecasted
EBITDA for the fiscal year 2004. These terminal value multiples and discount
rates implied perpetuity cash flow growth rates of 1.9% to 5.7%.

Based on the foregoing, this analysis yielded a range of net present values
from $22.00 to $36.00 per share for IBP if IBP were to perform on a stand
alone basis, without giving effect to any cost savings or synergies (the "Cost
Savings") as estimated by the management of Tyson to be realized in the
Merger.

Premium Analysis. PJSC reviewed certain mergers and acquisitions
transactions in the meat processing and branded meats industry and certain
transactions with Enterprise Values between $1.0 billion and $10.0 billion for
the period from December 29, 1997 to December 29, 2000 (source: Securities
Data Corporation) and calculated premiums paid in these transactions relative
to prevailing market prices one day, one week and one month prior to the
announcement of these transactions. This review resulted in (i) a median
premium paid relative to the prevailing market price one day prior to
announcement of 23.0% for selected transactions in the meat processing and
branded meats industry and 28.2% for selected transactions with Enterprise
Values between $1.0 billion and $10.0 billion compared to a premium of 63.8%
to IBP's closing price on September 29, 2000 (one trading day prior to
announcement of the Rawhide Agreement) at the Offer Price; (ii) a median
premium paid relative to the prevailing market price one week prior to
announcement of 34.0% for selected transactions in the meat processing and
branded meats industry and 36.0% for selected transactions with Enterprise
Values between $1.0 billion and $10.0 billion compared to a premium of 71.4%
to IBP's closing price on September 25, 2000 (one week prior to announcement
of the Rawhide Agreement) at the Offer Price; and (iii) a median premium paid
relative to the prevailing market price one month prior to announcement of
29.9% for selected transactions in the meat processing and branded meats
industry and 41.2% for selected transactions with Enterprise Values between
$1.0 billion and $10.0 billion compared to a premium of 87.5% to IBP's closing
price on September 1, 2000 (one month prior to announcement of the Rawhide
Agreement) at the Offer Price.

Pro Forma Merger Analysis. PJSC analyzed certain pro forma effects of the
Transaction on Tyson's EPS for the fiscal years ending September 30, 2001,
2002, 2003 and 2004, assuming the Transaction is completed on March 31, 2001.
Such analysis was based upon the IBP management projections and the Tyson
management projections. PJSC analyzed the impact of the Merger both including
and excluding amortization of goodwill created in the Transaction and both
with and without giving effect to the Cost Savings. Including amortization of
goodwill created in the Transaction, the Transaction would be accretive by
10.4%, 4.3%, 13.1% and 19.2% to Tyson's fiscal year 2001, 2002, 2003 and 2004
EPS, respectively, without the Cost Savings, and the Transaction would be
accretive by 28.4%, 20.8%, 27.9% and 32.4% to Tyson's fiscal year 2001, 2002,
2003 and 2004 EPS, respectively, with the Cost Savings. Excluding amortization
of goodwill created in the Transaction, the Transaction would be accretive by
25.2%, 17.9%, 25.3% and 30.0% to Tyson's fiscal year 2001, 2002, 2003 and 2004
EPS, respectively, without the Cost Savings, and the Transaction would be
accretive by 43.3%, 34.4%, 40.0% and 43.2% to Tyson's fiscal year 2001, 2002,
2003 and 2004 EPS, respectively, with the Cost Savings.

19
<PAGE>

In arriving at the PJSC Opinion, PJSC performed a variety of financial
analyses, the material portions of which are summarized above. The preparation
of a fairness opinion is a complex process involving various determinations as
to the most appropriate and relevant methods of financial analyses and the
application of those methods to the particular circumstances and, therefore,
such an opinion is not necessarily susceptible to a partial analysis or
summary description. In arriving at its opinion, PJSC did not attribute any
particular weight to any analysis or factor considered by it, but rather made
qualitative judgments as to significance and relevance of each analysis and
factor. Accordingly, PJSC believes that its analysis must be considered as a
whole and that selecting portions of its analysis, without considering all
such analyses, could create an incomplete view of the process underlying the
PJSC Opinion.

In performing its analyses, PJSC relied on numerous assumptions made by the
management of IBP and Tyson and made numerous judgments of its own with regard
to current and future industry performance, general business and economic
conditions and other matters, many of which are beyond the control of IBP and
Tyson. Actual values will depend upon several factors, including changes in
interest rates, dividend rates, market conditions, general economic conditions
and other factors that generally influence the price of securities. The
analyses performed by PJSC are not necessarily indicative of actual values or
actual future results, which may be significantly more or less favorable than
suggested by such analyses. Such analyses were prepared solely as a part of
PJSC's analysis of the fairness of the consideration proposed to be paid to
the holders of IBP Common Stock pursuant to the Merger Agreement from a
financial point of view and were provided to the Special Committee in
connection with the delivery of the PJSC Opinion. The analyses do not purport
to be appraisals or necessarily reflect the prices at which businesses or
securities might actually be sold, which are inherently subject to
uncertainty. Since such estimates are inherently subject to uncertainty, none
of IBP, Tyson, PJSC or any other person assumes responsibility for their
accuracy. With regard to the comparable public company analysis and the
comparable transactions analysis summarized above, PJSC selected comparable
public companies on the basis of various factors for reference purposes only;
however, no public company or transaction utilized as a comparison is fully
comparable to IBP or the Transaction. Accordingly, an analysis of the
foregoing is not mathematical; rather, it involves complex considerations and
judgments concerning differences in financial and operating characteristics of
the comparable companies and other factors that could affect the acquisition
or public trading value of the comparable companies and transactions to which
IBP and the Transaction are being compared. In addition, as described above,
the PJSC Opinion and the information provided by PJSC to the Special Committee
were two of many factors taken into consideration by the Special Committee in
making its determination to approve the Transaction. Consequently, the PJSC
analyses described above should not be viewed as determinative of the opinion
of the Special Committee or the view of IBP management with respect to the
value of IBP.

As part of its investment banking activities, PJSC is regularly engaged in
the evaluation of businesses and their securities in connection with mergers
and acquisitions, restructurings and valuations for corporate or other
purposes. The Special Committee selected PJSC to deliver an opinion with
respect to the Transaction on the basis of such experience.

Item 4(c) of the Schedule 14D-9 is hereby amended and restated to read in
its entirety as follows:

After reasonable inquiry and to the best knowledge of the Company, each
executive officer, director, affiliate or subsidiary of the Company who or
which owns Shares intends to tender such Shares in the Offer. The foregoing
does not apply to any Shares over which, or with respect to which, any such
executive officer, director, affiliate or subsidiary acts in a fiduciary or
representative capacity or is subject to the instructions of a third party
with respect to such tender.

20
<PAGE>

Item 5 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 5. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

Except as described herein, neither the Company nor any person acting on its
behalf has employed, retained or compensated, or currently intends to employ,
retain or compensate, any person to make solicitations or recommendations to
the stockholders of the Company on its behalf with respect to the Offer,
Exchange Offer or Merger.

(a) J.P. Morgan

Pursuant to an engagement letter dated July 21, 2000, the Company formally
retained J.P. Morgan to render financial advisory services to the Company in
connection with the Rawhide transaction and certain related matters. Pursuant
to its engagement, J.P. Morgan received $1.0 million at the signing of the
engagement and will receive an additional $4.0 million upon consummation of a
transaction. J.P. Morgan will also be reimbursed for its reasonable expenses.
In addition, the Company will indemnify J.P. Morgan and certain related persons
against certain liabilities and expenses in connection with its engagement,
including certain liabilities under the federal securities laws. For your
information, J.P. Morgan's parent company, J.P. Morgan & Co. Incorporated,
recently merged with The Chase Manhattan Corporation to form J.P. Morgan Chase
& Co. ("J.P. Morgan Chase"). J.P. Morgan has advised the Company that
affiliates of J.P. Morgan Chase may from time to time perform certain financial
advisory and other commercial and investment banking services for the Company
or Tyson, for which they receive customary compensation. Specifically,
affiliates of J.P. Morgan Chase may be arranging or providing financing to
Tyson in connection with the Transaction, for which they would receive
customary compensation. In the ordinary course of their businesses, affiliates
of J.P. Morgan Chase may actively trade the debt and equity securities or
senior loans of IBP or Tyson, 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 or loans.

(b) PJSC.

Pursuant to an engagement letter dated December 15, 2000, the Company
formally retained Peter J. Solomon to render financial advisory services to the
Company in connection with a possible acquisition of the Company and certain
related matters. Pursuant to its engagement, Peter J. Solomon became entitled
to receive $750,000 on the date on which it delivered a fairness opinion to the
Company. Peter J. Solomon will also be reimbursed for its reasonable expenses.
In addition, the Company will indemnify Peter J. Solomon and certain related
persons against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities laws.

The Company also retained Corporate Investor Communications, Inc. ("CIC") to
assist the Company in connection with its communications with stockholders with
respect to, and to provide other services to the Company in connection with,
the Rawhide Agreement. The Company will pay CIC $8,000 and will reimburse CIC
for its reasonable out-of-pocket expenses incurred in connection therewith. The
Company also agreed to indemnify CIC against various liabilities relating to
its engagement.

Item 6 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

No transactions in Shares have been effected during the past 60 days by the
Company or, to the knowledge of the Company, by any executive officer,
director, affiliate or subsidiary of the Company, other than the execution and
delivery of the Merger Agreement.

21
<PAGE>

Item 7 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

Except as set forth in this Statement, the Company is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to, or would result in, one or more of the following or a combination thereof:
(i) an extraordinary transaction, such as a merger or reorganization, involving
the Company or any of its subsidiaries; (ii) a purchase, sale or transfer of a
material amount of assets by the Company or any of its subsidiaries; (iii) a
tender offer for or other acquisition of securities by or of the Company; or
(iv) any material change in the dividend rate or policy, or indebtedness or
capitalization of the Company.

Except as set forth in this Statement, there are no transactions, resolutions
of the Board of Directors, agreements in principle or signed contracts in
response to the Offer that relate to one or more events referred to in the
first paragraph of this Item 7.

Item 8 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 8. ADDITIONAL INFORMATION.

INFORMATION STATEMENT. The Information Statement attached as Annex C to this
Statement is being furnished in connection with the possible designation by
Tyson, pursuant to the terms of the Merger Agreement, of certain persons to be
elected to the Company's Board other than at a meeting of the Company's
stockholders.

DGCL. As a Delaware corporation, the Company is subject to Section 203 of the
DGCL. In general, Section 203 would prevent an "interested stockholder"
(generally defined as a person beneficially owning 15% or more of a
corporation's voting stock) from engaging in a "business combination" (as
defined in Section 203) with a Delaware corporation for three years following
the date such person became an interested stockholder unless: (1) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination, (2) upon
consummation of the transaction which resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding for purposes of determining the number of
shares of outstanding stock held by directors who are also officers and by
employee stock plans that do not allow plan participants to determine
confidentially whether to tender shares), or (3) following the transaction in
which such person became an interested stockholder, the business combination is
(x) approved by the board of directors of the corporation and (y) authorized at
a meeting of stockholders by the affirmative vote of the holders of at least 66
2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. In accordance with the provisions of Section 203, the
Board of Directors has approved the Merger Agreement, as described in Item 4
above and, therefore, the restrictions of Section 203 are inapplicable to the
Merger and the transactions contemplated under the Merger Agreement.

Under the DGCL, if Purchaser acquires, pursuant to the Offer, the Exchange
Offer or otherwise, at least 90% of the Shares, Purchaser will be able to
effect the Merger after consummation of the Offer without a vote of the
Company's stockholders. However, if Purchaser does not acquire at least 90% of
the Shares pursuant to the Offer, the Exchange Offer or otherwise and a vote of
the Company's stockholders is required under Delaware law, a significantly
longer period of time may be required to effect the Merger.

REGULATORY APPROVALS.

United States Antitrust Compliance. Under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and the rules that have
been promulgated thereunder by the Federal Trade Commission (the "FTC"),
certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division of the Department of
Justice (the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The purchase of Shares pursuant to the Offer
is subject to such requirements.

22
<PAGE>

Pursuant to the requirements of the HSR Act, Tyson filed a Notification and
Report Form with respect to the Offer and the Merger with the Antitrust
Division and the FTC on December 12, 2000. Absent a request for additional
information, the initial waiting period applicable to the purchase of Shares
pursuant to the Offer was to expire at 11:59 p.m., New York City time, on
Wednesday, December 27, 2000. On December 28, 2000, Tyson announced that, prior
to the expiration of the waiting period, the Antitrust Division extended the
waiting period by requesting additional information from Tyson. Therefore, the
waiting period will be extended until 11:59 p.m., New York City time, on the
tenth day after Tyson's substantial compliance with such request. Thereafter,
such waiting period can be extended only by court order.

The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer. At any time before or after the consummation
of any such transactions, the Antitrust Division or the FTC could take such
action under the antitrust laws of the United States as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking divestiture of the Shares so acquired
or divestiture of substantial assets of Tyson or the Company. Private parties
(including individual States of the United States) may also bring legal actions
under the antitrust laws of the United States. The Company does not, and the
Purchaser and Tyson have advised the Company that they do not, believe that the
consummation of the Offer, Exchange Offer and Merger will result in a violation
of any applicable antitrust laws. However, there can be no assurance that a
challenge to the Offer, Exchange Offer or Merger on antitrust grounds will not
be made, or if such a challenge is made, what the result will be. Tyson has
committed in the Merger Agreement that it will take whatever actions are
necessary to eliminate any impediment under any antitrust, competition or trade
regulation laws that may be asserted by any governmental entity with respect to
the Offer, Exchange Offer or Merger.

OTHER FILINGS. Tyson and the Company each conduct operations in a number of
foreign countries and filings may have to be made with foreign governments
under their pre-merger notification statutes. The filing requirements of
various nations are being analyzed by the parties, and where necessary, the
parties intend to make such filings.

SHAREHOLDER LITIGATION. 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; 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; Louise 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. IBP,
inc. et al., Civil Action No. 18474-NC. On November 13, 2000, the Delaware
Court of Chancery entered an order directing the consolidation of these actions
into a single action. On December 5, 2000, the Delaware Court of Chancery
issued an order designating the Landesman complaint as the operative 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. On December
7, 2000, United States District Court for the District of South Dakota granted
the defendants' motion to stay the Teamsters action pending resolution of the
Delaware litigation and denied as moot the plaintiff's application for a
temporary restraining order enjoining the enforcement of the termination fee
and "no shop" provisions of the Rawhide Agreement. Though the Landesman and
Teamsters complaints are not identical, both complaints were filed by persons
alleging to be shareholders of IBP and 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

23
<PAGE>

preliminary and permanent injunctive relief against consummation of the Rawhide
merger, rescission of the Rawhide merger in the event it is consummated,
monetary damages and an award of attorneys' fees. In view of the termination of
the Rawhide Agreement on January 1, 2001, defendants believe that the
plaintiffs' claims for injunctive relief against the Rawhide merger are now
moot, and that the actions are without merit and intend to contest the actions
vigorously.

Item 9 of the Schedule 14D-9 is hereby amended and restated to read in its
entirety as follows:

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

Exhibits

<TABLE>
<C> <S>
(a)(1) Letter to the stockholders of the Company, dated January 5, 2001.

(a)(2) Letter of Transmittal (incorporated by reference to Exhibit (a)(2) to
Amendment No. 9 to the Schedule TO of Purchaser filed on January 5,
2001).

(a)(3) Sections 14 and 17 of the Supplement No. 1 to the Offer to Purchase,
dated January 4, 2001 (incorporated by reference to Exhibit (a)(1) to
Amendment No. 9 to the Schedule TO of Purchaser filed on January 5,
2001).

(a)(4) Opinion of J.P. Morgan Securities Inc., dated January 1, 2001 (included
as Annex A to this Statement).

(a)(5) Opinion of Peter J. Solomon Company Limited, dated January 1, 2001
(included as Annex B to this Statement).

(a)(6) Press release issued by the Company dated January 1, 2001 (incorporated
by reference to Exhibit (a)(1) to Amendment No. 1 to the Schedule 14D-
9 of the Company filed on January 2, 2001).

(e)(1) Agreement and Plan of Merger, dated as of January 1, 2001, among the
Company, Tyson and Purchaser (incorporated by reference to Exhibit
(e)(3) to Amendment No. 1 to the Schedule 14D-9 of the Company filed
on January 2, 2001).

(e)(2) Voting Agreement, dated January 1, 2001, by and between the Company and
Tyson Limited Partnership (incorporated by reference to Exhibit (d)(5)
to Amendment No. 9 to the Schedule TO of Purchaser filed on January 5,
2001).

(e)(3) Confidentiality Agreement, between Tyson and the Company, dated
December 4, 2000 (incorporated by reference to Exhibit (d)(1) to the
Schedule TO of Purchaser filed on December 12, 2000).

(e)(4) Information Statement of the Company, dated January 5, 2001 (included
as Annex C hereto).

(e)(5) Confidentiality Agreement, between Tyson and the Company, dated
December 18, 2000 (incorporated by reference to Exhibit (d)(6) to
Amendment No. 9 to the Schedule TO of Purchaser filed on January 5,
2001).
</TABLE>

24
<PAGE>

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated: January 5, 2001 IBP, inc.

By: _/s/ Robert L. Peterson
Name: Robert L. Peterson
Title: Chairman of the Board and
Chief Executive Officer

25
<PAGE>

EXHIBIT INDEX

Exhibits

<TABLE>
<C> <S>
(a)(1) Letter to the stockholders of the Company, dated January 5, 2001.

(a)(2) Letter of Transmittal (incorporated by reference to Exhibit (a)(2) to
Amendment No. 9 to the Schedule TO of Purchaser filed on January 5,
2001).

(a)(4) Opinion of J.P. Morgan Securities Inc., dated January 1, 2001 (included
as Annex A to this Statement).

(a)(5) Opinion of Peter J. Solomon Company Limited, dated January 1, 2001
(included as Annex B to this Statement).

(a)(6) Press release issued by the Company dated January 1, 2001 (incorporated
by reference to Exhibit (a)(1) to Amendment No. 1 to the Schedule 14D-
9 of the Company filed on January 2, 2001).

(e)(3) Confidentiality Agreement, between Tyson and the Company, dated
December 4, 2000 (incorporated by reference to Exhibit (d)(1) to the
Schedule TO of Purchaser filed on December 12, 2000).

(e)(4) Information Statement of the Company, dated January 5, 2001 (included
as Annex C hereto).

(e)(5) Confidentiality Agreement, between Tyson and the Company, dated
December 18, 2000 (incorporated by reference to Exhibit (d)(6) to
Amendment No. 9 to the Schedule TO of the Purchaser filed on January
5, 2001).
</TABLE>
<PAGE>

ANNEX A

January 1, 2001

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 Transaction (as
defined below). We understand that on December 12, 2000, Tyson Foods, Inc.
(the "Buyer") and its wholly-owned subsidiary Lasso Acquisition Corporation
(the "Merger Subsidiary") commenced a cash tender offer to acquire 50.1% of
the outstanding Common Stock, par value $.05 per share, of the Company (the
"IBP Common Stock") at a purchase price per share of $26.00 (the "Cash
Offer"). We further understand that the Company, the Buyer and the Merger
Subsidiary have subsequently entered into an Agreement and Plan of Merger,
dated as of January 1, 2001 (the "Agreement"), pursuant to which the Buyer and
the Merger Subsidiary will amend the Cash Offer (the "Amended Cash Offer") to
reflect, among other things, an amended purchase price of $30.00 per share of
the IBP Common Stock to be paid in the Amended Cash Offer (the "Amended
Purchase Price"). Pursuant to the Agreement, the Buyer and the Merger
Subsidiary will commence an exchange offer (the "Exchange Offer" and together
with the Amended Cash Offer, the "Offers") to acquire the IBP Common Stock
which remains outstanding after the Amended Cash Offer in exchange for that
number of shares of Class A Common Stock, par value $.10 per share, of the
Buyer (the "Class A Common Stock") determined pursuant to the provisions of
the Agreement (the "Exchange Ratio"). Pursuant to the Agreement, the Offers
will be followed by a merger of the Company with and into the Merger
Subsidiary (the "Merger" and together with the Offers, the "Transaction") in
which the remaining shares of Common Stock of the Company not tendered or
accepted in the Offers will be converted into the right to receive that number
of shares of the Class A Common Stock equal to the Exchange Ratio.

In arriving at our opinion, we have reviewed (i) the Offer to Purchase dated
December 12, 2000 of the Buyer and the Merger Subsidiary relating to the Cash
Offer; (ii) the Agreement; (iii) certain publicly available information
concerning the businesses of the Company and the Buyer and of certain other
companies in meat processing and branded foods sector and the reported market
prices for such other companies' securities; (iv) publicly available terms of
certain transactions involving companies in the meat processing and branded
foods sector and the consideration received for such companies; (v) current
and historical market prices of the IBP Common Stock and the Class A Common
Stock; (v) the audited financial statements of the Company for the fiscal year
ended December 31, 1999, the unaudited financial statements of the Company for
the period ended September 30, 2000, the audited financial statements of the
Buyer for the fiscal year ended October 2, 1999, and the unaudited financial
statements of the Company for the period ended July 1, 2000; (vi) certain
internal financial analyses and forecasts prepared by the Company and its
management and the Buyer and its management, respectively; 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
Transaction, and the past and current business operations of the Company and
the Buyer, the financial condition and future prospects and operations of the
Company and the Buyer, the effects of the Transaction on the financial
condition and future prospects of the Company and the Buyer, 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

A-1
<PAGE>

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 or the Buyer to
which such analyses or forecasts relate. We have also assumed that the
Transaction 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.

We note that we are familiar with the terms of an alternative merger
transaction with the Company proposed by Smithfield Foods, Inc. concurrently
with the negotiation of the Transaction and that we participated in
negotiations with respect to such alternative transaction. We have taken such
facts into account in rendering this opinion.

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 are expressing no opinion herein as to the price at which the
Class A Common Stock will trade at any future time.

We have acted as financial advisor to the Special Committee of the Board of
Directors of the Company with respect to the proposed Transaction and will
receive a fee from the Company for the delivery of this opinion. We also acted
as financial advisor to the Special Committee with respect to the proposed
merger transaction between the Company and Rawhide Holdings Corporation, a
Delaware corporation of which all of the outstanding capital stock is owned by
DLJ Merchant Banking Partners III, L.P., which is proposed to be terminated in
connection with entering into the Agreement.

For your information, our parent company, J.P. Morgan & Co. Incorporated,
recently merged with The Chase Manhattan Corporation to form J.P. Morgan Chase
& Co. ("J.P. Morgan Chase"). Please be advised that affiliates of J.P. Morgan
Chase may from time to time perform certain financial advisory and other
commercial and investment banking services for the Company or the Buyer, for
which they received customary compensation. Specifically, affiliates of J.P.
Morgan Chase may be arranging or providing financing to the Buyer in
connection with the Transaction, for which they would receive customary
compensation. In addition, in the ordinary course of their businesses,
affiliates of J.P. Morgan Chase may actively trade the debt and equity
securities and senior loans of the Company or the Buyer 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 or loans.

On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that each of (i) the Amended Purchase Price to be paid to the
Company's stockholders in the Amended Cash Offer and (ii) the Exchange Ratio
in the proposed Exchange Offer and the proposed Merger is fair, from a
financial point of view, to the Company's 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 Transaction. This opinion does not constitute a recommendation to any
stockholder of the Company as to whether such stockholder should tender its
shares of IBP Common Stock in the Offers or how such stockholder should vote
with respect to the Transaction. 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 Schedule TO, Schedule 14d-9, amended
offer to purchase, 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.

Very truly yours,

J.P. Morgan Securities Inc.

/s/ J.P. Morgan Securities Inc.
_____________________________________

A-2
<PAGE>

ANNEX B

[Peter J. Solomon Company Letterhead]

January 1, 2001

Special Committee of the Board of Directors
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, SD 57049

Ladies and Gentlemen:

We understand that IBP, inc. (the "Company") proposes to enter into an
Agreement and Plan of Merger dated as of January 1, 2001 (the "Agreement") by
and among the Company, Tyson Foods, Inc. ("Parent") and Lasso Acquisition
Corporation ("Merger Sub"), a direct wholly-owned subsidiary of Parent. The
Agreement provides for a tender offer (the "Offer") by Merger Sub to acquire
up to 50.1% of the outstanding shares of the common stock, par value $0.05 per
share, of the Company (the "Company Common Stock"), pursuant to which Merger
Sub will pay $30.00 in cash for each share of Company Common Stock accepted
for payment in the Offer. The Agreement also provides for an exchange offer
(the "Exchange Offer") by Merger Sub to acquire the remaining outstanding
shares of the Company Common Stock, pursuant to which each share of Company
Common Stock would be exchanged for that number of shares of Class A Common
Stock, par value $0.10 per share, of Parent ("Parent Common Stock") having a
value of $30.00 per share, subject to the limitations set forth in the
Agreement. The Agreement further provides that following completion of the
Offer and the Exchange Offer, the Company will be merged with and into Merger
Sub (the "Merger" and, together with the Offer and the Exchange Offer, the
"Acquisition") and Merger Sub will continue as the surviving corporation and a
wholly-owned subsidiary of Parent. Subject to the terms and conditions of the
Agreement, in the Merger each then outstanding share of the Company Common
Stock will be converted into and represent the right to receive that number of
shares of Parent Common Stock having a value of $30.00 per share, subject to
the limitations set forth in the Agreement.

You have asked us to advise you with respect to the fairness to the holders
of the Company Common Stock, from a financial point of view, of the
consideration proposed to be paid to the holders of the Company Common Stock
in the Acquisition pursuant to the terms of the Agreement.

For purposes of the opinion set forth herein, we have:

(i) reviewed certain publicly available financial statements and other
information of the Company and Parent, respectively;

(ii) reviewed certain internal financial statements and other financial
and operating data concerning the Company prepared by the management of the
Company;

(iii) reviewed certain financial forecast information for the Company and
Parent furnished to us by the management of the Company and Parent,
respectively;

(iv) discussed the past and current operations and financial condition of
the Company, as well as its business and prospects with management of the
Company;

(v) reviewed the reported prices and trading activity of the Company
Common Stock and the Parent Common Stock;

(vi) compared the financial performance and condition of the Company and
the Parent and the reported prices and trading activity of the Company
Common Stock and the Parent Common Stock with that of certain other
comparable publicly traded companies and their securities;

(vii) reviewed publicly available information regarding the financial
terms of certain transactions comparable, in whole or in part, to the
Acquisition;

B-1
<PAGE>

(viii) participated in certain discussions with representatives of the
Company;

(ix) reviewed a draft of the Agreement;

(x) considered the terms proposed by a third party for a merger
transaction with the Company, and the negotiations relating thereto; and

(xi) performed such other analyses and took into account such other
matters as we have deemed appropriate.

In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party with respect to a merger or other business
combination transaction involving the Company or any of its assets.

We have assumed and relied upon the accuracy and completeness of the
information reviewed by us for the purposes of this opinion and we have not
assumed any responsibility for independent verification of such information.
With respect to the financial forecast information, we have assumed that the
financial forecasts were reasonably prepared on bases reflecting the best
currently available estimates and judgments of the future financial
performance of the Company and Parent, respectively. We have further assumed
that the final form of the Agreement will be substantially the same as the
last draft reviewed by us. We have not made any independent valuation or
appraisal of the assets or liabilities of the Company or Parent, nor have we
been furnished with any such valuation or appraisal. We have not assumed any
obligation to conduct any physical inspection of the properties or facilities
of the Company or Parent. 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.

We have assumed that in the course of obtaining the necessary regulatory or
other consents or approvals (contractual or otherwise) for the Acquisition, no
restrictions, including any divestiture requirements or amendments or
modifications, will be imposed that will have a material adverse effect on the
contemplated benefits of the Merger. For purposes of rendering this opinion we
have assumed, in all aspects material to our analysis, that the
representations and warranties of each party to the Agreement and all related
documents are true and correct, that each party to the Agreement will perform
all of the covenants and agreements required to be performed by such party
thereunder and that all conditions to the consummation of the Merger will be
satisfied without waiver thereof.

We have acted as financial advisor to the Special Committee of the Board of
Directors (the "Special Committee") of the Company in connection with the
transaction contemplated by the Agreement and will receive a fee for our
services.

This letter is solely for the information of the Special Committee and is
not on behalf of and is not intended to confer rights or remedies upon any
other entity or persons, and may not be used by any other purpose without our
prior written consent. This letter does not constitute a recommendation to any
holder of Company Common Stock as to whether or not such holder should tender
any shares of Company Common Stock in the Offer or the Exchange Offer or how
any such holder should vote on the Merger.

We are not expressing any opinion herein as to the prices at which the
Company Common Stock or the Parent Common Stock will trade following the
announcement or consummation of the Merger. In addition, the opinion does not
address the Company's underlying business decision to proceed with the
Acquisition.

Based on, and subject to, the foregoing and other matters as we consider
relevant, we are of the opinion that on the date hereof, the consideration
proposed to be paid to the holders of the Company Common Stock in the
Acquisition, is fair from a financial point of view to the holders of the
Company Common Stock.

Very truly yours,

/s/ Peter J. Solomon Company Limited

Peter J. Solomon Company Limited

B-2
<PAGE>

ANNEX C

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

INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14F-1 THEREUNDER

This Information Statement is being mailed on or about January 5, 2001 as
part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Statement") of IBP, inc. (the "Company"). You are receiving this Information
Statement in connection with the possible election of persons designated by
Tyson Foods, Inc. ("Tyson"), a Delaware corporation, to a majority of seats on
the Board of Directors of the Company (the "Board of Directors" or the
"Board"). On January 1, 2001, the Company entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Tyson and Lasso Acquisition
Corporation, a Delaware corporation and wholly owned subsidiary of Tyson (the
"Purchaser"), pursuant to which Purchaser is continuing its tender offer to
purchase up to 50.1% of the outstanding shares (the "Shares") of common stock,
par value $0.05 per share, of the Company (the "IBP Common Stock"), at a price
per Share of $30.00 (the "Offer Price"), net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in
Purchaser's Supplement No. 1 to the Offer to Purchase, dated January 5, 2001
(the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments and supplements thereto, collectively constitute
the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal
have been mailed to stockholders of the Company and are filed as Exhibits
(a)(1) and (a)(2) respectively, to the Amendment No. 9 to the Tender Offer
Statement on Schedule TO (as amended from time to time, the "Schedule TO")
filed by Purchaser with the Securities and Exchange Commission (the
"Commission") on January 5, 2001. Pursuant to the Merger Agreement, Tyson will
commence promptly an exchange offer (the "Exchange Offer"). In the Exchange
Offer, Tyson would offer to exchange, for each outstanding Share not owned by
Tyson, a number of shares of Class A common stock, par value $0.10 per share,
of Tyson ("Tyson Class A Common Stock") having a value of $30.00, so long as
the average per share price of Tyson Class A Common Stock during the fifteen
trading day period ending on the second trading day before the expiration date
of the Exchange Offer is at least $12.60 and no more than $15.40. If the
average per share price of Tyson Class A Common Stock is less than $12.60,
then each Share tendered in the Exchange Offer will be exchanged for 2.381
shares of Tyson Class A Common Stock. If the average per share price of Tyson
Class A Common Stock is more than $15.40, then each Share tendered in the
Exchange Offer will be exchanged for 1.948 shares of Tyson Class A Common
Stock. The Merger Agreement provides that following the completion of the
Offer and the Exchange Offer and the satisfaction or waiver of certain other
conditions in the Merger Agreement, the Company will be merged with and into
Purchaser (the "Merger") with the Purchaser continuing as the surviving
corporation (the "Surviving Corporation"). At the effective time of the Merger
(the "Effective Time"), each Share outstanding immediately prior to the
Effective Time (other than Shares owned by Tyson, Purchaser or other
subsidiaries of Tyson) would be converted into the right to receive shares of
Tyson Class A Common Stock having a value of $30.00 if, during the fifteen
trading day period ending on the fifth trading day immediately preceding the
Effective Time, the average per share price of Tyson Class A Common Stock is
at least $12.60 and no more than $15.40. If the average per share price of
Tyson Class A Common Stock is less than $12.60, then each Share outstanding
immediately prior to the Effective Time will be exchanged for 2.381 shares of
Tyson Class A Common Stock. If the average per share price of Tyson Class A
Common Stock is more than $15.40, then each Share outstanding immediately
prior to the Effective Time will be exchanged for 1.948 shares of Tyson Class
A Common Stock.

The Offer, the Exchange Offer, the Merger and the Merger are more fully
described in the Statement, to which this Information Statement forms Annex C,
which was filed by the Company with the Commission on January 5, 2001 and
which is being mailed to stockholders of the Company along with this
Information Statement.

This Information Statement is being mailed to you in accordance with Section
14(f) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 14f-1
promulgated thereunder. The information set forth

C-1
<PAGE>

herein supplements certain information set forth in the Statement. Information
set forth herein related to Tyson, Purchaser or Tyson Designees (as defined
below) has been provided by Tyson. You are urged to read this Information
Statement carefully. You are not, however, required to take any action in
connection with the matters set forth herein.

Purchaser commenced the Offer on December 12, 2000. The Offer is currently
scheduled to expire at 12:00 midnight, New York City time, on January 16,
2001, unless Purchaser extends it.

GENERAL

The IBP Common Stock is the only class of equity securities of the Company
which is currently entitled to vote at a meeting of the stockholders of the
Company. As of the close of business on December 28, 2000, there were
105,644,598 outstanding shares of IBP Common Stock, of which Tyson owns
574,200.

RIGHTS TO DESIGNATE DIRECTORS AND TYSON DESIGNEES

The Merger Agreement provides that, promptly upon the purchase of and
payment for Shares representing, together with the Shares previously owned by
Tyson, at least 50.1% of the outstanding Shares, by Purchaser pursuant to the
Offer and from time to time thereafter, the Company will, subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, upon request
by Tyson, use its reasonable best efforts to take all actions necessary to
cause a majority of the Board to consist of Tyson's designees ("Tyson
Designees"), including accepting the resignations of those incumbent directors
designated by the Company or increasing the size of the Board and causing the
Tyson Designees to be elected.

Following the election of such Tyson Designees, prior to the Effective Time,
any amendment of the Merger Agreement or the Certificate of Incorporation or
By-laws of the Company, any termination of the Merger Agreement by the
Company, any extension by the Company of the time for performance of any of
the obligations or other acts of Tyson or Purchaser, or waiver of any of the
Company's rights under the Merger Agreement or any other action by the Company
in connection with or relating to the transactions contemplated hereby, will
require the concurrence of a majority of the directors of the Company then in
office who (i) neither were designated by Tyson nor are employees of the
Company or any subsidiary of the Company or, if there be just one director,
the concurrence of such director or (ii) were members of the special committee
of the Board (the "Independent Directors"). Notwithstanding the foregoing,
prior to the Effective Time, at least two of the directors on the Board will
be Independent Directors.

The Tyson Designees will be selected by Tyson from among the individuals
listed in Schedule I to the Offer to Purchase ("Schedule I"). Schedule I is
incorporated herein by reference, and the information with respect to the
Tyson Designees in Schedule I has been designated by Tyson for inclusion
herein. Each of such individuals has consented to serve as a director of the
Company if appointed or elected. None of Tyson Designees currently is a
director of, or holds any positions with, the Company. Tyson has advised the
Company that, to the best of Tyson's knowledge, none of Tyson Designees or any
of their affiliates beneficially owns any equity securities or rights to
acquire any such securities of the Company, nor has any such person been
involved in any transaction with the Company or any of its directors,
executive officers or affiliates that is required to be disclosed pursuant to
the rules and regulations of the Commission other than with respect to
transactions between Tyson and the Company that have been described in the
Schedule TO or the Statement.

C-2
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Security Ownership of Certain Beneficial Owners

As of January 4, 2001, 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(l) 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
</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.

Security Ownership of Management

The following table sets forth, as of January 4, 2001, 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 Percent
Beneficial of
Name or Beneficial Owner--Position with IBP Ownership(1) Class
------------------------------------------- ------------ -------
<S> <C> <C>
Richard L. Bond--Director and Executive Officer......... 126,010 *(2)
John S. Chalsty--Director............................... 7,400 *
R. Randolph Devening--Executive Officer................. 0 *
---------
Wendy L. Gramm--Director................................ 4,900 *
Craig J. Hart--Executive Officer........................ 28,723 *
John J. Jacobson, Jr.--Director......................... 12,600 *
---------
Eugene D. Leman--Director and Executive Officer......... 165,417 *
Martin A. Massengale--Director.......................... 2,375 *
Robert L. Peterson--Director and Executive Officer...... 761,002 *
Michael L. Sanem--Director.............................. 60,600 *
Larry Shipley--Executive Officer........................ 71,380 *
---------
Jo Ann R. Smith--Director............................... 6,500 *
All Directors and Executive Officers As a Group (12
Persons)............................................... 1,246,907 1.2%
</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 117,660; Mr.
Chalsty 4,900; Dr. Gramm 4,900; Mr. Hart 22,906; Mr. Jacobson 600; Mr.
Leman 90,200; Dr. Massengale 1,300; Mr. Peterson 294,000; Mr. Sanem 600;
Mr. Shipley 48,440; and Ms. Smith 2,700.
(2) Less than 1% of IBP's common stock.

C-3
<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 Information 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.

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.

C-4
<PAGE>

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.

Information Regarding the Board of Directors and its Committees

The Board of Directors has established an Audit Committee, Compensation
Committee, Executive Committee, Nominating Committee, Plans Administration
Committee and Special Committee (for purposes of this transaction).

C-5
<PAGE>

The Board of Directors met six times during the 2000 fiscal year. All
directors attended at least 75 percent of the Board of Directors meetings. All
directors attended at least 75 percent of the committee meetings for which
they were eligible.

The Executive Committee, during the intervals between meetings of the Board
of Directors, exercises all powers of the Board of Directors, except is
otherwise provided by law and the IBP Bylaws. The members of the Executive
Committee currently are Messrs. Peterson (Chairman), Bond, and Leman. The
Executive Committee met or acted by written consent sixteen times during 2000.

The Audit Committee selects the firm of independent public accountants to
audit the financial statements of IBP and its consolidated Subsidiaries,
subject to approval of the Board of Directors, discusses with the independent
public accountants the scope and results of their audit; discusses with the
independent public accountants, and with the management of IBP, IBP's
financial, accounting and reporting principles, policies and practices;
discusses with the independent public accountants, and with the Controller of
IBP and his staff, the adequacy of the corporation's accounting, financial and
operating controls; and reports to the Board of Directors. The members of the
Audit Committee currently are Dr. Massengale (Chairman), Mr. Chalsty, Dr.
Gramm, Mr. Jacobson, Mr. Sanem and Ms. Smith. The Audit Committee held four
meetings during 2000.

The Compensation Committee reviews and approves compensation arrangements,
including annual incentive awards, for officers of IBP. The members of the
Compensation Committee currently are Mr. Chalsty (Chairman), Dr. Gramm, Mr.
Jacobson. Dr. Massengale, Mr. Sanem and Ms. Smith. The Compensation Committee
held one meeting during 2000.

The Nominating Committee makes recommendations as to candidates for election
to the Board of Directors and their qualifications to fill board vacancies in
connection with proposed slates of nominees for directors for whose election
proxies will be solicited by the Board of Directors. The Nominating Committee
will consider properly submitted recommendations of stockholders if the
recommendation is submitted pursuant to the procedures previously outlined.
The members of the Nominating Committee currently are Dr. Gramm (Chairperson),
Mr. Chalsty, Mr. Jacobson, Dr. Massengale, Mr. Sanem and Ms. Smith. The
Nominating Committee held one meeting during 2000.

The Plans Administration Committee administers the restricted stock and
employee stock option plans of IBP. The members of the Plans Administration
Committee currently are Ms. Smith (Chairperson), Mr. Chalsty, Dr. Gramm, Mr.
Jacobson, Dr. Massengale, and Mr. Sanem, none of whom are eligible for
selection as participants in these plans. The Plans Administration Committee
(including sub-committees) held one meeting during 2000.

The Special Committee was established by the Board of Directors to make
recommendations with respect to the proposal by DLJ Merchant Banking Partners
III, Inc. to acquire IBP, as well as with respect to other such proposals,
including the Tyson proposal. The members of the Special Committee currently
are Ms. Smith (Chairperson), Dr. Gramm, Mr. Jacobson, Dr. Massengale and Mr.
Sanem. The Special Committee held 36 meetings during 2000.

Information Regarding Directors' Compensation

Officers of IBP who are also directors do not receive any fee or
remuneration for services as members of the Board of Directors or of any
committee of the Board of Directors. Non-management directors receive a
retainer fee of $25,000 per annum, $2,500 per annum for each committee they
chair and $1,000 for each board or committee meeting that they attend. Non-
management directors also receive stock options pursuant to the IBP Directors
Stock Option Plan.

C-6
<PAGE>

JOINT REPORT OF THE COMPENSATION
AND PLANS ADMINISTRATION COMMITTEES

Compensation and Plans Administration Committees

The Compensation Committee of the Board of Directors is comprised entirely
of disinterested and outside directors. The Committee is responsible for
establishing the levels of compensation (except stock option grants and long-
term stock awards) for the executive officers of the Company. The Committee
annually evaluates IBP's performance and compensation paid to its executive
officers.

The Plans Administration Committee reviews and approves the grant of stock
options and awards of restricted stock pursuant to IBP's stock option and
long-term stock plans for the Company's officers and employees. This Committee
is comprised entirely of disinterested and outside directors.

Committees' Report on Executive Compensation

Base Salary

The annual compensation of executive officers of IBP includes a base salary,
coupled with a cash bonus which is calculated in accordance with an
established formula based on the operating income of IBP. The Compensation
Committee from time to time uses outside consultants and published
compensation survey data to review competitive rates of pay, to establish
salary ranges and to set target base salary levels for officers. The amount of
the employee's base salary is a function of the employee's officer position,
or grade level, and individual performance. The employee's individual
performance is measured against expectations related to budgetary performance
or operating income results and operating performance standards.

Bonus Payments

The annual compensation of employees participating in IBP's officers' bonus
program, including executive officers, is dependent on overall corporate
performance. The dollar amount of the bonus pool from which bonuses are paid
is established as a percent of operating income as adjusted for non-operating
expenses such as pushdown accounting. Target bonuses are based on the percent
of increase or decrease in such operating income from the prior year.

Stock Option Grants and Restricted Stock Awards

IBP has stock option plans for all of its management employees and a long-
term stock plan for its officers, including executive officers. The purpose of
the plans is to assist in securing and retaining employees of ability by
making it possible to offer them an incentive, in the form of a proprietary
interest in IBP, to join or continue in the service of IBP and to increase
their efforts on its behalf.

Levels for both stock option grants and restricted stock awards are
established by the Plans Administration Committee on the basis of an
employee's officer position or grade level. Stock options are typically
granted for terms of ten years and normally become exercisable in increments
beginning after the second and continuing through the fifth year of the stock
option term. The restricted stock awards are made subject to continued
employment, generally for five years.

Corporate Performance

In evaluating corporate performance to establish compensation for fiscal
year 2000, the Compensation Committee considered the fact that operating
income for 1999 for bonus purposes was up 47% from 1998 and net earnings per
diluted share were up to $2.94 in 1999 from $1.81 in 1998. The Compensation
Committee established a standard salary increase budget of 4%, for fiscal year
2000 for officers. The budget percentage was based on the standard percentage
increase for all management employees of the Company. Individual salary

C-7
<PAGE>

increases were determined for all management employees, including executive
officers, based on each individual's contributions to operating unit and
corporate performance.

Compensation of Chief Executive Officer

The Compensation Committee of the Board of Directors has set the following
bonus formulas for the Chairman and Chief Executive Officer; the President and
Chief Operating Officer; and the Chief Executive Officer of Foodbrands
America, Inc. for fiscal year 2000:

Chairman and Chief Executive Officer--the bonus formula for the Chairman and
Chief Executive Officer for fiscal year 2000 shall be calculated by taking the
percentage used to calculate the Chairman and Chief Executive's bonus for the
first one hundred million of operating earnings from the prior year (1.627
percent in fiscal 1999), times one plus the percent of average salary increase
for IBP management for the bonus year expressed in decimal form, the product
of which gives the "Derived Percentage". The annual bonus for the Chairman and
Chief Executive Officer will be the Derived Percentage of the first one
hundred million of operating earnings in 2000 plus one percent of any excess
over one hundred million dollars. Earnings from operations for purposes of
management bonuses are calculated prior to the effects of pushdown accounting
and other non-recurring items;

President and Chief Operating Officer--the bonus formula for the President
and Chief Operating Officer for fiscal year 2000 shall be calculated by taking
.2 percent of operating earnings of the Company for fiscal year 2000. Earnings
from operations for purposes of management bonuses are calculated prior to the
effects of pushdown accounting and other non-recurring items; and

Chief Executive Officer of Foodbrands America, Inc.--the bonus formula for
the Chief Executive Officer of Foodbrands America, Inc. ("Foodbrands") for
fiscal year 2000 shall be: (a) 100% of his base salary for the bonus year if
Foodbrands meets its target consolidated earnings before interest and taxes
("Target EBIT"), (b) 125% of his base salary if actual results exceed Target
EBIT by 10% or more, (c) 150% of his base salary if actual results exceed
Target EBIT by 20% or more. Target EBIT is the EBIT of the Foodbrands'
operations for the previous year plus the last full fiscal year EBIT of any
acquired company (or any operation acquired from IBP) that is transferred to
the Foodbrands' operations on a pro rata basis (i.e. if a facility transferred
to the Foodbrands' operation has 1999 EBIT of $10 million and such facility is
transferred to the Foodbrands' operation at the end of the second quarter of
fiscal year 2000, $5 million will be added to Target EBIT.)

The bonus method was designed to incentivize Mr. Peterson, Mr. Bond and Mr.
Devening with performance-based bonuses that were competitive with the
industry and also allow the Company to take a deduction for federal income tax
purposes.

<TABLE>
<S> <C> <C>
John S. Chalsty Wendy L. Gramm John J. Jacobson, Jr.
Martin A. Massengale Michael L. Sanen JoAnn R. Smith
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION IN COMPENSATION DECISIONS

The members of the Compensation Committee are Mr. Chalsty (Chairman), Dr.
Gramm, Mr. Jacobson, Dr. Massengale, Mr. Sanen and Ms. Smith.

AUDIT COMMITTEE REPORT

The audit committee has reviewed and discussed the audited financial
statements with the Company's management. In addition, the audit committee has
communicated with the Company's independent auditors, PricewaterhouseCoopers
LLP ("PwC"), in regards to those matters required by SAS 61 (as may be
modified or

C-8
<PAGE>

supplemented), has received the written disclosures and the letter from PwC
required by Independence Standards Board Standard No. 1 (as may be modified or
supplemented), and has discussed with PwC the independence of PwC. Based on
the above mentioned review and discussion, the audit committee recommended to
the Board of Directors that the audited financials be included in the
Company's Annual Report on Form 10K.

The members of the audit committee have been determined to be independent
pursuant to the New York Stock Exchange Rules 303.01(a)(B)(2)(a) and (3).

<TABLE>
<S> <C> <C>
Martin A. Massengale Wendy L. Gramm Michael L. Sanen
John S. Chalsty John J. Jacobson, Jr. JoAnn R. Smith
</TABLE>

SUMMARY COMPENSATION TABLE (1)

<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Awards
------------------------------------- ---------------------
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Salary Compensation Awards Options Compensation
Position Year ($) Bonus ($) ($)(2) ($)(3) (#) ($)(4)
------------------ ---- --------- --------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Peterson...... 2000 1,000,000 60,000 115,932
Chairman and 1999 1,000,000 6,316,914 51,125 304,878
Chief Executive Officer 1998 1,000,000 4,568,006 57,566 30,000 160,486

Richard L. Bond......... 2000 688,532 529,968 50,000 20,656
President and Chief 1999 555,317 853,740 174,099
Operating Officer 1998 516,667 550,800 21,000 30,243

Eugene D. Leman......... 2000 464,942 371,508 16,200 13,948
Chief Executive 1999 349,849 520,200 133,661
Officer, Fresh Meats 1998 325,500 346,800 12,000 19,096

Larry Shipley........... 2000 288,750 12,000 0
Chief Financial 1999 282,292 383,240 35,736
Officer 1998 289,150 260,000 12,000 16,942

Craig J. Hart........... 2000 148,491 200,000 3,120 4,257
Vice President 1999 99,936 103,180 21,131
and Controller 1998 92,083 70,000 3,120 5,403

R. Randolph Devening.... 2000 760,000 6,000 6,193
President & Chief 1999 728,000 728,000 10,000 35,999
Executive Officer, 1998 700,000 1,217,650 35,700
Foodbrands America,
Inc.
</TABLE>
--------
(1) No other types of compensation required to be reported in the table were
paid or were payable to any of the named executive officers and,
therefore, the column which the SEC regulations created to report "Long-
Term Incentive Plan Payouts" has been deleted from the table. IBP has not
granted any SARs pursuant to the IBP 1993 Stock Option Plan and 1996 Stock
Option Plan and has therefore removed SARs from the columns of this table
and reported only options. Certain information, including 2000 bonuses
payable in 2001, were not able to be calculated and included in this
table.

(2) Except for Mr. Peterson, the perquisites and other personal benefits
provided to the executive officers do not exceed the threshold established
by the SEC and are not reported in the table. The other annual
compensation reported for Mr. Peterson consists of perquisites provided by
the Company. For the perquisites reported in 2000, $29,201 of this amount
is attributable to Company automobile expenses and $28,231 is attributable
to Mr. Peterson's personal use of Company aircraft.

(3) Restricted stock was granted to certain officers pursuant to the IBP
Officer Long-Term Stock Plan. The shares vest five years from the date of
grant contingent upon continued employment with IBP. Early vesting

C-9
<PAGE>

may occur pursuant to the Plan's provisions due to events such as death or
total disability. The value of the shares on the date of grant is listed
for the named executive officers in the Summary Compensation Table. Under
certain past grants, and certain future grants to executive officers, the
Company is obligated to pay the executive officer's mandatory minimum
Federal tax withholding and Medicare tax portion of the Federal Insurance
Contribution Act upon vesting and receipt of the shares. Dividends paid on
the restricted stock are used to purchase additional shares of restricted
stock pursuant to the provisions of the Plan. These additional shares are
then credited to an officer's award. The number of shares of restricted
Common Stock in each named officer's account pursuant to the IBP Officer
Long-Term Stock Plan on December 30, 2000, and the aggregate fair market
value of the shares based upon a fiscal year-end closing- price of $26.75
per share, were as follows: Mr. Peterson--101,443 shared valued at
$2,713,600; Mr. Bond--46,641 shares valued at $1,247,647; Mr. Leman--33,106
shares valued at $885,586; Mr. Shipley--14,104 shares valued at $377,282;
and Mr. Hart--7,767 shares valued at $207,767.

(4) All Other Compensation includes 1997 profit sharing contributions made by
the Company into the named officer's account in the IBP Retirement Income
Plan ("RIP") and the matching contributions made by the Company in 1999.
The matching contribution attributable to each named officer for 2000 is
as follows: Mr. Peterson--$58,500; Mr. Bond--$20,656; Mr. Leman--$13,948;
Mr. Shipley--$0; and Mr. Hart--$4,257. The profit sharing and employer
matching amounts contributed by Foodbrands America, Inc. ("Foodbrands")
into Mr. Devening's 401(k) account in 2000, and which are attributable to
IBP, equaled $6,193. All Other Compensation also reports life insurance
premiums paid by the Company for the named officer. The amount of
insurance premiums paid by the Company for each named officer in 2000, and
any cash surrender value the named officer is entitled to under a policy
was not available at the time of this filing.

Employment Contracts

Except for Mr. Peterson, IBP has employment agreements with all of its
executive officers, including Messrs. Bond, Leman, Shipley and Hart. Each
agreement is for a term of five years, Messrs. Bond's and Leman's commenced
February 1, 2000; Mr. Shipley's commenced August 18, 1997 and Mr. Hart's
commenced December 26, 2000. Each provides for a one year non-compete
obligation from the employee following the termination of employment with IBP.
The agreements provide for, among other things, a minimum base salary and
participation in IBP employee benefit plans including specifically stock
options and the IBP Officer Long-Term Stock Plan as an incentive to an
employee's long term commitment to IBP. For the four IBP executive officers
named in the Summary Compensation Table who currently have employment
contracts, the minimum base salaries are: Mr. Bond--$700,000; Mr. Leman--
$475,000; Mr. Shipley--$250,000; and Mr. Hart--$180,000. While the agreements
terminate by their terms after five years, either party to an agreement has
the right to terminate it, subject to the non-compete obligation, upon one
year's notice,

IBP does not have termination or change of control plans or contracts with
any of its employees, except as provided for in the IBP 1987 Stock Option
Plan, the IBP 1993 Stock Option Plan, the 1996 Stock Option Plan, the IBP
Officer Long-Term Stock Plan and the 1996 Officer Long-Term Stock Plan.

Mr. Devening's agreement commenced on August 2, 1994 and was amended on
December 31, 1996. The minimum base salary for Mr. Devening is $700,000, and
in addition Mr. Devening is entitled to an annual bonus based on Foodbrands
obtaining target goals for earnings before interest and taxes ("EBIT"). Mr.
Devening's agreement also contains a non-compete obligation in which Mr.
Devening agrees not to compete for a period of twenty-four (24) months after
termination, and in return will receive a payment of $1 million dollars
distributed over such twenty-four month period. In addition, Mr. Devening's
employment agreement and a stay bonus agreement call for Foodbrands to make
certain payments to Mr. Devening due to the change of control which occurred
upon IBP's acquisition of Foodbrands.

C-10
<PAGE>

OPTION GRANTS TABLE

Option Grants in 2000(/1/)

<TABLE>
<CAPTION>
Potential
Individual Grant Realizable Value
------------------------------------------ at Assumed Annual
Percent of Rates of Stock
Number of Total Price
Securities Options Appreciation for
Underlying Granted to Exercise Option Term
Options Employees of Base (10 Years)
Granted in Fiscal Price Expiration -----------------
Name (#)(/2/) Year (%) ($/Share) Date 5% ($) 10% ($)
---- ---------- ---------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Peterson...... 60,000 6.24% 12.9375 2/18/00 487,950 1,237,350
Richard L. Bond......... 50,000 5.20% 12.9375 2/18/00 406,625 1,031,125
Eugene D. Leman......... 16,200 1.68% 12.9375 2/18/00 131,747 334,085
Larry Shipley........... 12,000 1.25% 12.9375 2/18/00 97,590 247,470
Craig J. Hart........... 3,120 .32% 12.9375 2/18/00 25,373 64,342
R. Randolph Devening.... 6,000 .62% 12.9375 2/18/00 48,795 123,735
</TABLE>

--------
(1) All options were granted pursuant to the 1996 Stock Option Plan. IBP has
not granted any SARs pursuant to the 1996 Stock Option Plan, and has
therefore removed SARs from the title and columns of this table and has
reported only options.

(2) The options are granted for terms of ten years and become exercisable in
increments beginning after the second and continuing through the fifth
year of the option term. All options are priced it the fair market value
of the IBP Common Stock on the effective date of the grant.

AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES TABLE

Aggregated Option Exercises in 2000
and 2000 Year-End Option Values(/1/)

<TABLE>
<CAPTION>
Number of Securities Value of Unexercisable
Shares Underlying Unexercised In-The-Money Options
Acquired on Options at 2000 Year-End (#) at 2000 Year-End ($)
Exercise Value -------------------------------- -------------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Peterson...... 294,000 126,000 2,887,125 1,378,500
Richard L. Bond......... 114,308 103,712 937,436 1,090,911
Eugene D. Leman(/2/).... 4,000 53,000 93,294 51,906 912,775 532,863
Larry Shipley(/2/)...... 420 5,410 48,860 38,800 308,841 384,000
Craig J. Hart(/2/)...... 1,726 14,319 22,906 9,984 161,489 100,269
R. Randolph Devening.... 0 22,000 0 209,250
</TABLE>
--------
(1) IBP has not granted any SARs pursuant to the IBP 1993 Stock Option Plan
and 1996 Stock Option Plan, and has therefore removed SARs from the title
and columns of this table and has reported only options granted.

(2) The shares acquired on exercise by Mr. Leman, Mr. Shipley and Mr. Hart
were held by them. For the value realized, IBP has reported the product of
the number of shares exercised times the difference between the closing
price of IBP Common Stock on the date of exercise and the option exercise
price.

C-11
<PAGE>

PERFORMANCE GRAPH

The following performance graph compares the registrants to stock performance
over the past five years against the performance of both in equity interest
index and a peer group index that cover the same five year period.

IBP, inc.
Comparison of Five Year Cumulative Total Return
IBP, inc., S&P 500 Index and S&P 400 Index(1)

[LINE GRAPH]

<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
IBP, inc. ...................... $100.00 $ 96.42 $ 83.61 $115.85 $ 71.05 $108.50
S&P 500......................... 100.00 125.08 160.30 211.97 252.18 227.51
S&P 400......................... 100.00 124.37 156.39 211.99 260.48 216.78
</TABLE>
--------
(1) Assumes $100 invested on December 29, 1995 in IBP, inc. Common Stock, the
S&P 500 Index, and the S&P 400 Index. Each of the three measures of
cumulative total return assumes reinvestment of dividends.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
ten percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the SEC and the New York
Stock Exchange. Executive officers, directors and greater than ten-percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.

Based solely on review of the copies of such forms furnished to the Company,
or written representations that forms were not required, the Company believes
that during the fiscal year ending December 30, 2000 there was compliance with
all Section 16(a) filing requirements applicable to its executive officers and
directors.

C-12