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Filed by Tyson Foods, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12(b)
under the Securities Act of 1934
Subject Company: IBP, inc.
Commission File No. 1-6085
January 8, 2001
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IMPORTANT INFORMATION
LASSO ACQUISITION CORPORATION ("LASSO"), A WHOLLY OWNED SUBSIDIARY OF TYSON
FOODS, INC. ("TYSON") IS COMMENCING AN OFFER FOR UP TO 50.1% OF THE OUTSTANDING
SHARES OF COMMON STOCK, OF IBP, INC ("IBP") AT $30.00 NET PER SHARE TO SELLER IN
CASH. THE OFFER CURRENTLY IS SCHEDULED TO EXPIRE AT 12:00 MIDNIGHT, EASTERN
STANDARD TIME, ON TUESDAY, JANUARY 16, 2001, UNLESS EXTENDED BY LASSO IN ITS
DISCRETION. TYSON'S OFFER IS BEING MADE ONLY BY WAY OF AN OFFER TO PURCHASE AND
RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS THERETO AND IS
BEING MADE TO ALL HOLDERS OF IBP'S SHARES. MORE DETAILED INFORMATION PERTAINING
TO TYSON'S OFFER AND THE PROPOSED MERGER WILL BE SET FORTH IN APPROPRIATE
FILINGS TO BE MADE WITH THE SEC, IF AND WHEN MADE. SHAREHOLDERS ARE URGED TO
READ ANY RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS WILL BE ABLE TO OBTAIN A FREE COPY
OF ANY FILINGS CONTAINING INFORMATION ABOUT TYSON, LASSO AND IBP, WITHOUT
CHARGE, AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES OF ANY FILINGS
CONTAINING INFORMATION ABOUT TYSON CAN ALSO BE OBTAINED, WITHOUT CHARGE, BY
DIRECTING A REQUEST TO TYSON FOODS, INC., 2210 WEST OAKLAWN DRIVE, SPRINGDALE,
ARKANSAS 72762- 6999, ATTENTION: OFFICE OF THE CORPORATE SECRETARY (501) 290-
4000.
Tyson and certain other persons named below may be deemed to be participants in
the solicitation of proxies. The participants in this solicitation may include
the directors and executive officers of Tyson. A detailed list of the names of
Tyson's directors and officers is contained in Tyson's proxy statement for its
2001 annual meeting, which may be obtained without charge at the SEC's Internet
site (http://www.sec.gov) or by directing a request to Tyson at the address
provided above.
As of the date of this communication, none of the foregoing participants,
individually beneficially owns in excess of 5% of IBP's common stock. Except as
disclosed above and in Tyson's proxy statement for its 2001 annual meeting and
other documents filed with the SEC, to the knowledge of Tyson, none of the
directors or executive officers of Tyson has any material interest, direct or
indirect, by security holdings or otherwise, in Tyson or IBP.
This communication is not an offer to purchase shares of IBP, nor is it an offer
to sell shares of Tyson Class A common stock which may be issued in any proposed
merger with IBP or exchange offer for IBP shares. Any issuance of Tyson Class A
common stock in any proposed merger with IBP or exchange offer for IBP shares
would have to be registered under the Securities Act of 1933, as amended, and
such Tyson stock would be offered only by means of a prospectus complying with
the Act.
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Exhibit (a)(16)
Supplement No. 1 to the
Offer to Purchase for Cash up to
50.1% of the Outstanding Shares of Common Stock
of
IBP, inc.
at
$30.00 Net Per Share
by
Lasso Acquisition Corporation,
a wholly-owned subsidiary of
Tyson Foods, Inc.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JANUARY 16, 2001, UNLESS THE
OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER A NUMBER
OF SHARES OF COMMON STOCK, PAR VALUE $0.05 PER SHARE (THE "SHARES"), OF IBP,
INC. (THE "COMPANY") REPRESENTING, TOGETHER WITH THE SHARES OWNED BY TYSON
FOODS, INC. ("TYSON"), AT LEAST 50.1% OF THE TOTAL NUMBER OF OUTSTANDING
SHARES (THE "MINIMUM CONDITION") AND (2) ANY WAITING PERIODS UNDER APPLICABLE
ANTITRUST LAWS HAVING EXPIRED OR BEEN TERMINATED. SEE "INTRODUCTION" AND "THE
OFFER--CONDITIONS TO THE OFFER." THE OFFER IS ALSO SUBJECT TO OTHER
CONDITIONS.
----------------
THE OFFER IS NOT CONDITIONED UPON TYSON OR LASSO ACQUISITION CORPORATION
("PURCHASER") OBTAINING FINANCING.
----------------
THE BOARD OF DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE, HAS APPROVED THE
AGREEMENT AND PLAN OF MERGER, DATED AS OF JANUARY 1, 2001, AMONG PURCHASER,
TYSON AND THE COMPANY (THE "MERGER AGREEMENT") AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER, THE EXCHANGE OFFER AND THE MERGER
(EACH DEFINED HEREIN), AND HAS DETERMINED THAT THE OFFER, THE EXCHANGE OFFER
AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF
SHARES AND RECOMMENDS THAT ALL THE COMPANY'S STOCKHOLDERS WHO DESIRE TO
RECEIVE CASH FOR THEIR SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
SHARES TENDERED IN THE OFFER WHICH, BECAUSE OF PRORATION, ARE NOT PURCHASED
WILL BE DELIVERED TO THE EXCHANGE AGENT FOR THE EXCHANGE OFFER AND TREATED AS
TENDERED FOR THE EXCHANGE OFFER UNLESS YOU INDICATE OTHERWISE IN THE LETTER OF
TRANSMITTAL OR OTHER WRITTEN NOTICE TO THE DEPOSITARY.
----------------
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
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If you wish to tender all or any part of your Shares, you should either (i)
complete and sign the original Letter of Transmittal (or a facsimile thereof)
or the revised Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions in the Letter of Transmittal, have your signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile thereof) and any
other required documents to the Depositary (as defined herein) and either
deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal (or a facsimile thereof) or deliver such Shares pursuant
to the procedures for book-entry transfers set forth in Section 4 prior to the
expiration date of the Offer or (ii) request your broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for you. If you
have Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee, you must contact such broker, dealer, commercial
bank, trust company or other nominee if you desire to tender your Shares.
If you desire to tender your Shares and your certificates for such Shares
are not immediately available, or you cannot comply with the procedures for
book-entry transfers described in this Supplement to the Offer on a timely
basis, you may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 4.
A summary of the principal terms of the Offer appears on pages 1-6 hereof.
If you have questions about the Offer, you can call MacKenzie Partners,
Inc., the information agent for the Offer, or Merrill Lynch, Pierce, Fenner &
Smith Incorporated, the dealer manager for the Offer, at their respective
addresses and telephone numbers set forth on the back cover of this Supplement
to the Offer. You can also obtain additional copies of this Supplement to the
Offer, the related Letter of Transmittal and the Notice of Guaranteed Delivery
from MacKenzie Partners, Inc., or your broker, dealer, commercial bank, trust
company or other nominee.
THIS SUPPLEMENT TO THE OFFER AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
January 5, 2001
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----------------
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY TERM SHEET........................................................ 1
INTRODUCTION.............................................................. 7
THE OFFER................................................................. 10
1. Terms of the Offer; Expiration Date................................. 10
2. Extension of Tender Period; Termination; Amendment.................. 10
3. Acceptance for Payment and Payment.................................. 11
4. Procedure for Tendering Shares...................................... 12
5. Withdrawal Rights................................................... 14
6. Material Tax Considerations......................................... 15
7. Price Range of Shares; Dividends.................................... 17
8. Certain Information Concerning the Company.......................... 18
9. Certain Information Concerning Purchaser and Tyson.................. 20
10. Certain Comparative and Pro Forma Information...................... 23
11. Source and Amount of Funds......................................... 29
12. Background of the Offer............................................ 29
13. Purpose and Structure of the Offer; Plans for the Company;
Dissenters' Rights................................................. 35
14. The Merger Agreement............................................... 36
15. Effect of the Offer on the Market for the Shares; Stock Exchange
Listing(s); Registration under the Exchange Act.................... 47
16. Dividends and Distributions........................................ 48
17. Conditions to the Offer............................................ 48
18. Certain Legal Matters; Regulatory Approvals........................ 49
19. Fees and Expenses.................................................. 51
20. Miscellaneous...................................................... 52
Schedule I--Directors and Executive Officers of Tyson and Purchaser....... 53
Schedule II--Transactions In Shares....................................... 56
</TABLE>
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SUMMARY TERM SHEET
This summary term sheet is a brief description of the material provisions
of the Offer being made by Tyson Foods, Inc. ("Tyson") through Lasso
Acquisition Corporation ("Purchaser"), a wholly-owned subsidiary of Tyson, to
purchase up to 50.1% of the common stock, par value $0.05 per share (the
"Common Stock" or "Shares"), of IBP, inc. (the "Company") for $30.00 per Share
net to the seller in cash, without interest pursuant to an Agreement and Plan
of Merger dated as of January 1, 2001, among Tyson, Purchaser and the Company
(the "Merger Agreement"). The following are some of the questions you, as a
stockholder of the Company, may have and answers to those questions. You
should carefully read this Supplement to the Offer and the accompanying Letter
of Transmittal in their entirety because the information in this summary term
sheet is not complete and additional important information is contained in the
remainder of this Supplement to the Offer and the Letter of Transmittal.
Who is offering to buy my securities? Why?
Our name is Tyson Foods, Inc. We are a Delaware corporation and are making
the Offer through our wholly-owned subsidiary, Lasso Acquisition Corporation,
a Delaware corporation, which was formed for the purpose of making a tender
offer for the Shares. The tender offer is the first step in our plan to
acquire all of the outstanding Shares as provided in the Merger Agreement.
What are the classes and amounts of securities sought in the Offer?
We are seeking to purchase up to the number of Shares that represent,
together with Shares owned by Tyson, 50.1% of the outstanding Shares. Tyson
owns 574,200 Shares. In the Merger Agreement, the Company represented that
105,644,598 Shares were outstanding as of December 28, 2000.
What will happen if more than 50.1% of the outstanding Shares are validly
tendered and not withdrawn prior to the expiration date of the Offer?
If more than the number of Shares that represent, together with Shares
owned by Tyson, 50.1% of the outstanding Shares are validly tendered and not
withdrawn prior to the expiration date of the Offer, we will accept for
payment and pay for only the number of Shares that represent, together with
Shares owned by Tyson, 50.1% of the outstanding Shares on a pro rata basis
(with appropriate adjustments to avoid purchase of fractional Shares) based on
the number of Shares properly tendered by each stockholder prior to or on the
expiration date of the Offer. Preliminary results of proration will be
announced by press release as promptly as practicable after the expiration
date of the Offer. Stockholders may obtain such preliminary information from
MacKenzie Partners, Inc., the information agent for the Offer, and may be able
to obtain such information from their broker.
What will happen to my Shares that are not purchased in the Offer?
If we accept for payment less than all of the Shares tendered in the Offer,
Shares that are not purchased will be delivered to the exchange agent for the
Exchange Offer unless you indicate otherwise in the Letter of Transmittal.
Those unpurchased Shares will be deemed valid tenders for purposes of the
Exchange Offer, subject to withdrawal rights. There will be at least 5
business days between the delivery of unpurchased Shares to the exchange agent
for the Exchange Offer and the expiration date of the Exchange Offer.
Stockholders will be receiving shortly documents relating to the Exchange
Offer. Please read them carefully for important information about the Exchange
Offer.
What is the Exchange Offer?
In accordance with the Merger Agreement, Tyson intends to commence an
Exchange Offer for each Share not purchased in the Offer. In the Exchange
Offer, we will offer for each Share a number of shares of Tyson Class A common
stock worth $30.00 if the average closing price for a share of Tyson Class A
common stock for the fifteen trading day period ending on the second trading
day before the expiration of the Exchange Offer is
1
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between $12.60 and $15.40. If the average trading price is below $12.60, the
exchange ratio will be fixed at 2.381 shares of Tyson Class A common stock and
if the average trading price is above $15.40, the exchange ratio will be fixed
at 1.948 shares of Tyson Class A common stock. The Exchange Offer will close
at least 5 business days after the purchase of Shares in the Offer and
delivery of unpurchased Shares to the exchange agent for the Exchange Offer
and is conditioned on, among other things, the purchase of Shares in the
Offer. The Exchange Offer is intended to give stockholders the opportunity to
receive shares of Tyson Class A common stock sooner than would be possible
pursuant to the Merger. SHARES TENDERED IN THE OFFER WHICH, BECAUSE OF
PRORATION, ARE NOT PURCHASED WILL BE DELIVERED TO THE DEPOSITARY FOR THE
EXCHANGE OFFER AND TREATED AS TENDERED IN THE EXCHANGE OFFER UNLESS YOU
INDICATED OTHERWISE IN THE LETTER OF TRANSMITTAL OR IN A WRITTEN NOTICE TO THE
DEPOSITARY.
How much are you offering to pay for my securities and what is the form of
payment? Will I have to pay any fees or commissions?
We are offering to pay $30.00 per Share, net to you, in cash, without
interest. If you tender your Shares to us in the Offer, you will not have to
pay brokerage fees, commissions or similar expenses. If you own your Shares
through a broker or other nominee, and your broker tenders your Shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply.
Do you have the financial resources to make payment?
Yes. We will need approximately $1.8 billion to purchase all Shares
pursuant to the Offer and to pay related fees and expenses. In addition, we
will need approximately $950 million to repay certain indebtedness of IBP. It
is anticipated that such funds will be obtained from Tyson's general corporate
funds and from Tyson's existing commercial paper program. Tyson's existing
revolving credit facility provides a back-stop for the issuance of up to $1
billion in commercial paper. Tyson has received proposals from various
financial institutions to provide a new 364-day revolving credit facility,
which, when combined with its existing revolving credit facility, would
provide a back-stop for the issuance of a total of up to $3.5 billion in
commercial paper. In the event Tyson were unable to issue commercial paper,
the revolving credit facilities would be available to fund the payment for the
Shares. As of December 30, 2000, the outstanding borrowings under the
commercial paper program were approximately $234 million and the weighted
average interest rate on such commercial paper was 7.79%, with maturities
ranging from 3 to 30 days. At such date, outstanding borrowings under the
existing revolving credit agreement (unrelated to the commercial paper
program) were approximately $20 million.
Is your financial condition relevant to my decision to tender in the Offer?
Because the form of payment in the Offer consists solely of cash and the
Offer is not subject to a financing condition, we do not think our financial
condition is material to your decision whether to tender in the Offer.
However, as noted below, if you do not tender in the Offer, but tender in the
Exchange Offer, you will receive for each Share you tender (if we are required
pursuant to the terms of the Exchange Offer to accept Shares), shares of Tyson
Class A common stock having a value of $30.00 if, during the relevant pricing
period before the expiration date of the Exchange Offer, the average per share
price of Tyson Class A common stock is at least $12.60 and no more than
$15.40. If your Shares are not purchased in the Offer or the Exchange Offer,
in the subsequent merger (if it occurs) you will receive, for each Share you
hold, shares of Tyson Class A common stock having a value of $30.00 if, during
the relevant pricing period before the merger, the average per share price of
Tyson Class A common stock is at least $12.60 and no more than $15.40. These
$30.00 values are subject to adjustment as noted in this Supplement to the
Offer if the average per share price of Tyson Class A common stock during the
pricing period is not in that range. If you would like additional information
about our financial condition, please see "Certain Information Concerning
Purchaser and Tyson--Available Information."
2
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How long do I have to decide whether to tender in the Offer?
You have until at least 12:00 Midnight, New York City time, on Tuesday,
January 16, 2001, to decide whether to tender your Shares in the Offer.
Further, if you cannot deliver everything required to make a valid tender to
Wilmington Trust Company, the depositary for the Offer, prior to such time,
you may be able to use a guaranteed delivery procedure, which is described in
"The Offer--Procedure for Tendering Shares."
Can the Offer be extended and under what circumstances?
Under the Merger Agreement, we are required to extend the Offer from time
to time if at the then scheduled expiration date all of the conditions to the
Offer have not been satisfied or waived by us. Each extension shall not exceed
the lesser of 10 business days or such fewer days that we believe are
necessary for the conditions to be satisfied. We might extend, for instance,
if any of the conditions specified in "The Offer--Conditions to the Offer" are
not satisfied prior to the expiration date of the Offer.
How will I be notified if the Offer is extended?
If we decide to extend the Offer, we will inform Wilmington Trust Company,
the depositary for the Offer, of that fact and will make a public announcement
of the extension, not later than 9:00 a.m., New York City time, on the
business day after the day on which the Offer was scheduled to expire.
What are the most significant conditions to the Offer?
The most important conditions to the Offer are the following:
. That the Company's stockholders validly tender and do not withdraw prior
to the expiration date of the Offer the number of Shares representing,
together with the Shares owned by Tyson, at least 50.1% of the total
number of outstanding Shares.
. That any waiting periods under applicable antitrust laws have expired or
have been terminated.
For a complete list of the conditions to the Offer, see "The Offer--Conditions
to the Offer."
How do I tender my Shares?
To tender Shares, you must deliver the certificates representing your
Shares, together with a completed Letter of Transmittal, to Wilmington Trust
Company, the depositary for the Offer, not later than the time the Offer
expires. You may deliver either the original Letter of Transmittal or the
revised Letter of Transmittal. If your Shares are held in street name by your
broker, dealer, bank, trust company or other nominee, such nominee can tender
your Shares through The Depository Trust Company. If you cannot deliver
everything required to make a valid tender to the Depositary prior to the
expiration date of the Offer, you may have a limited amount of additional time
by having a broker, a bank or other fiduciary which is a member of the
Securities Transfer Agents Medallion Program or other eligible institution to
guarantee that the missing items will be received by the Depositary within
three New York Stock Exchange, Inc., or NYSE, trading days. However, the
Depositary must receive the missing items within that three trading day
period.
Until what time can I withdraw tendered Shares?
You can withdraw tendered Shares at any time until the Offer has expired
and, if we have not by February 9, 2001 agreed to accept your Shares for
payment, you can withdraw them at any time after such time until we accept
Shares for payment.
3
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How do I withdraw tendered Shares?
To withdraw Shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to Wilmington Trust Company,
the depositary for the Offer, while you have the right to withdraw the Shares.
When and how will I be paid for my tendered Shares?
Subject to the terms and conditions of this Supplement to the Offer, we
will pay for all validly tendered and not withdrawn Shares, subject to the
proration provisions noted in this Supplement to the Offer, promptly after the
expiration date of the Offer, subject to the satisfaction or waiver of the
conditions to the Offer, as set forth in "The Offer--Conditions to the Offer."
We do, however, reserve the right, in our sole discretion, to delay acceptance
for payment and payment for Shares pending receipt of any regulatory or
governmental approvals to the Offer as described under the caption "The
Offer--Certain Legal Matters; Regulatory Approvals." We will pay for your
validly tendered and not withdrawn Shares by depositing the purchase price
with Wilmington Trust Company, the depositary for the Offer, which will act as
your agent for the purpose of receiving payments from us and transmitting such
payments to you. In all cases, payment for tendered Shares will be made only
after timely receipt by Wilmington Trust Company of certificates for such
Shares (or of a confirmation of a book-entry transfer of such Shares as
described in "The Offer--Procedure for Tendering Shares"), a properly
completed and duly executed Letter of Transmittal and any other required
documents for such Shares.
Has the board of directors of the Company approved the Merger?
Yes. On January 1, 2001, the board of directors of the Company, based on
the unanimous recommendation of a special committee (the "Special Committee"),
approved, by unanimous vote, the terms set forth in the Merger Agreement and
the transactions contemplated therein, including the Offer, the Exchange Offer
and the Merger and recommended that the Company's stockholders tender their
Shares in the Offer and the Exchange Offer, and vote to approve the Merger and
the Merger Agreement. The Special Committee's financial advisors, J.P. Morgan
and Peter J. Solomon Company Limited, delivered their opinions to the Special
Committee that the consideration to be paid to the Company's stockholders in
the Offer, the Exchange Offer and the Merger is fair from a financial point of
view.
What happens after the Offer? Will the Offer be followed by a merger?
As mentioned previously, Tyson intends to commence the Exchange Offer soon
after the date of this Supplement to the Offer. If in the Offer and the
Exchange Offer we accept for payment and pay for a number of Shares that
represents at least 90% of the outstanding Shares, we intend to consummate a
"short form" merger in which the Company would be merged with and into the
Purchaser and would become a wholly-owned subsidiary of Tyson. We will not
need the approval of the Company's stockholders to complete a short form
merger. If in the Offer and the Exchange Offer we accept for payment and pay
for the number of Shares that represent, together with Shares owned by Tyson,
at least 50.1% of the outstanding Shares (or fewer Shares, if we waive the
Minimum Condition, which will require the consent of the Company), but less
than 90% of the outstanding Shares, we intend to consummate a merger with the
Company into the Purchaser which will require the approval of the Company's
stockholders. However, if we accept for payment and pay for the number of
Shares that represent, together with Shares owned by Tyson, 50.1% of the
outstanding Shares, we would have sufficient voting power to approve the
merger without the affirmative vote of any other stockholder of the Company.
If either type of merger takes place, Tyson will own all of the Shares and all
remaining stockholders (other than Tyson, Purchaser, or other subsidiaries of
Tyson) will receive, for each Share they hold, shares of Tyson Class A common
stock having a value of $30.00 if, during the relevant pricing period before
the merger, the average per share price of Tyson Class A common stock is at
least $12.60 and no more than $15.40. This $30.00 value is subject to
adjustment if the average per share price of Tyson Class A common stock during
the pricing period is not in that range.
4
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If the number of Shares that represent, together with Shares owned by Tyson,
50.1% of the outstanding Shares are tendered and accepted for payment, will the
Company continue as a public company?
Yes; however, if and when the merger takes place, the Company will no longer
be publicly owned. It is possible that, following the expiration date of the
Offer and prior to the merger, if we purchase all the tendered Shares, there
may be so few remaining stockholders and publicly held Shares that the Shares
will no longer be eligible to be traded on the NYSE or any other securities
exchange, there may not be an active public trading market (or, possibly, any
public trading market) for the Shares, and the Company may cease making filings
with the Securities and Exchange Commission, or SEC, or otherwise cease being
required to comply with the SEC rules relating to publicly held companies.
If I decide not to tender, how will the Offer affect my Shares?
As indicated above, if the Offer is successful, we expect to complete the
Exchange Offer. If the Offer and the Exchange Offer are successful, we expect
to conclude a merger transaction in which all stockholders not tendering in the
Offer or the Exchange Offer (other than Tyson, Purchaser and any other
subsidiary of Tyson) will receive, for each Share they hold, shares of Tyson
Class A common stock having a value of $30.00 if, during the relevant pricing
period before the merger, the average per share price of Tyson Class A common
stock is at least $12.60 and no more than $15.40. This $30.00 value is subject
to adjustment if the average per share price of Tyson Class A common stock
during the pricing period is not in that range. Therefore, if the Exchange
Offer is consummated and/or the merger takes place, the difference to you
between tendering your Shares and not tendering your Shares is that you will be
paid in cash if you tender your Shares in the Offer and will receive shares of
Tyson Class A common stock in exchange for your Shares if you do not tender in
the Offer. If the average per share price of Tyson Class A common stock during
the pricing period is not in that range, the difference to you is that you
would receive $30.00 per share in cash if you tender your Shares in the Offer,
but will receive shares of Tyson Class A common stock having a value of more
than $30.00 per Share if the average price is more than $15.40 or having a
value of less than $30.00 per Share if the average price is less than $12.60.
However, if the merger does not take place and the Offer and the Exchange Offer
are consummated, the number of stockholders and Shares that are still in the
hands of the public may be so small that there will no longer be an active
public trading market (or, possibly, any public trading market) for the Shares,
which may affect prices at which Shares trade. Also, as described above, the
Company may cease making filings with the SEC or otherwise being required to
comply with the SEC rules relating to publicly held companies.
Are appraisal rights available in either the Offer or the merger?
Appraisal rights are not available in the Offer. Appraisal rights will not
be available to holders of the Shares in connection with the merger if both of
the following are true:
. at the date fixed to determine the stockholders entitled to notice of
and to vote on the merger, the Shares are registered on a national
securities exchange or traded on Nasdaq, and
. the shares of Tyson Class A common stock at the effective time of the
merger are either listed on a national securities exchange or traded on
Nasdaq.
As of the date of this Supplement to the Offer, the Shares and the Tyson Class
A common stock are each listed on the NYSE.
What is the market value of my Shares as of a recent date?
On September 29, 2000, the last full trading day before the date the Company
entered into the Agreement and Plan of Merger dated October 1, 2000 among the
Company, Rawhide Holdings Corporation and Rawhide Acquisition Corporation, the
closing price of a Share of the Company was $18.31. On November 10, 2000, the
last full trading day before the date Smithfield Foods, Inc. made its
unsolicited proposal to the Special Committee for a stock-for-stock merger, the
closing price of a Share of the Company was $20.88.
5
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Between January 1, 2000 and January 4, 2001, the price per Share on the New
York Stock Exchange ranged between $11.00 and $28.63, and on January 4, 2001,
the last full trading day before the date of this Supplement to the Offer, the
closing price of a Share of the Company was $27.06. We advise you to obtain a
recent quotation for Shares before deciding whether to tender your Shares.
Who can I talk to if I have questions about the Offer?
You can call MacKenzie Partners, Inc., the information agent for the Offer,
at (800) 322-2885 (toll free) or Merrill Lynch, Pierce, Fenner & Smith
Incorporated, the dealer manager for the Offer, at (212) 236-3790 (call
collect).
6
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To the Holders of Common Stock of IBP, inc.:
INTRODUCTION
The following supplements our Offer to Purchase, dated December 12, 2000.
We, Tyson Foods, Inc., a Delaware corporation ("Tyson"), through our wholly
owned subsidiary Lasso Acquisition Corporation, a Delaware corporation
("Purchaser"), hereby offer to purchase up to the number of Shares that
represent, together with Shares owned by Tyson, 50.1% (the "Maximum Amount") of
the outstanding common stock, par value $0.05 per share (the "Shares"), of IBP,
inc., a Delaware corporation (the "Company"), at $30.00 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Supplement to the Offer and in the related Letter of
Transmittal (which together, as amended, supplemented or otherwise modified
from time to time, constitute the "Offer"). You will not be obligated to pay
brokerage fees, commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the
Offer. We will pay all charges and expenses of Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Dealer Manager" or "Merrill Lynch"), Wilmington Trust
Company (the "Depositary") and MacKenzie Partners, Inc. (the "Information
Agent") incurred in connection with the Offer. See "The Offer-Fees and
Expenses."
The purpose of the Offer, the Exchange Offer and the Merger (as defined
below) is to enable Tyson to acquire control of, and to acquire the entire
equity interest in, the Company.
SHARES PREVIOUSLY VALIDLY TENDERED AND NOT WITHDRAWN CONSTITUTE VALID
TENDERS FOR PURPOSES OF THE OFFER. STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY
FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE OFFER PRICE
PER SHARE IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY PURCHASER PURSUANT
TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY PROCEDURE IF
SUCH PROCEDURE WAS UTILIZED.
SHARES TENDERED IN THE OFFER WHICH, BECAUSE OF PRORATION, ARE NOT PURCHASED
WILL BE DELIVERED TO THE DEPOSITARY FOR THE EXCHANGE OFFER AND TREATED AS
TENDERED IN THE EXCHANGE OFFER UNLESS YOU INDICATE OTHERWISE IN THE LETTER OF
TRANSMITTAL OR OTHER WRITTEN NOTICE TO THE DEPOSITARY.
This Supplement to 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. The Merger Agreement provides that following
the completion of the Offer and the Exchange Offer and the satisfaction or
waiver of certain conditions in the Merger Agreement, the Company will be
merged with and into Purchaser with the Purchaser continuing as the surviving
corporation (the "Merger"). 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 Class A common stock, par value
$0.10 per share, of Tyson ("Tyson Class A Common Stock") having a value of
$30.00 if, during the relevant pricing period before the Merger, 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
not in that range, the difference to you is that you would receive $30.00 per
share in cash if you tender your Shares in the Offer, but will receive shares
of Tyson Class A Common Stock having a value of more than $30.00 per Share if
the average price is more than $15.40 or having a value of less than $30.00 per
Share if the average price is less than $12.60. This $30.00 value is subject to
change if the average per share price of Tyson Class A Common Stock is not in
that range and the value you will receive will be proportionately changed.
Pursuant to the Merger Agreement, Tyson will commence promptly an exchange
offer (the "Exchange Offer") for all Shares not purchased in the Offer. In the
Exchange Offer, Tyson would offer to exchange, for each outstanding Share not
owned by Tyson, a number of shares of Tyson Class A Common Stock having a
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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. This $30.00 value is subject to change if the
average per share price of Tyson Class A Common Stock is not in that range and
the value you will receive will be proportionately changed.
The Board of Directors of the Company (the "Company Board"), by unanimous
vote, has approved, upon the unanimous recommendation of the special committee
of the Company Board (the "Special Committee"), the Merger Agreement and the
transactions contemplated by it, including the Offer, the Exchange Offer and
the Merger, and has determined that the Offer, the Exchange Offer and the
Merger are fair to, and in the best interests of, the stockholders of the
Company and recommends that stockholders of the Company accept the Offer and
tender their Shares pursuant to the Offer.
The Company's financial advisors, J.P. Morgan and Peter J. Solomon Company
Limited, have delivered to the Company Board their respective opinions dated
January 1, 2001 (the "Financial Advisor Opinions"), to the effect that, as of
such date, and based on and subject to the matters stated in the opinions, the
consideration to be received by holders of Shares in the Offer, the Exchange
Offer and in the Merger is fair from a financial point of view to those
stockholders. The full text of the Financial Advisor Opinions, including the
assumptions made, matters considered and limits on the review undertaken, are
attached as Annex A and Annex B to the Company's amended
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which has been filed by the Company with the SEC in connection with the
Offer and which is being mailed to stockholders together with this Supplement
to the Offer. Stockholders are urged to, and should, read the Financial
Advisor Opinions carefully. The Company has advised us that to the best of its
knowledge each of its executive officers and directors intends to tender all
of his or her Shares pursuant to the Offer.
The Offer is subject to the conditions described in "The Offer--Conditions
to the Offer", including, among other things, (1) there being 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 (the "Minimum Condition") and (2) any
waiting periods under applicable antitrust laws having expired or been
terminated. The Offer is also subject to other conditions.
According to the Company's representations and warranties in the Merger
Agreement, as of December 28, 2000, there were 105,644,598 Shares outstanding.
On the date hereof, Tyson owns 574,200 Shares. Based on this information, the
Minimum Condition would be satisfied if 52,353,743 Shares are validly tendered
and not withdrawn prior to the Expiration Date.
The Merger Agreement provides that promptly upon payment by Purchaser for
Shares purchased pursuant to the Offer, and from time to time thereafter, the
Company shall, upon request of Tyson, promptly use its reasonable best efforts
to take all actions necessary to cause a majority of the Company Board to
consist of Tyson's designees.
The Merger is subject to the satisfaction or waiver of certain conditions,
including the approval of the Merger Agreement by the Company's stockholders,
if necessary. If the Minimum Condition is satisfied, Purchaser would have
sufficient voting power to approve the Merger without the affirmative vote of
any other stockholder of the Company. The Company has agreed to cause a
meeting of its stockholders to be held as promptly as practicable following
consummation of the Offer for the purposes of considering and taking action
upon the approval and adoption of the Merger Agreement. Tyson and Purchaser
have agreed to vote their shares in favor of the approval and adoption of the
Merger Agreement. See "The Offer--The Merger Agreement."
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
STOCKHOLDERS OF THE COMPANY OR ANY OFFER TO SELL OR SOLICITATION OF OFFERS TO
BUY TYSON CLASS A COMMON STOCK OR OTHER SECURITIES. ANY SUCH SOLICITATION WILL
BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS PURSUANT TO THE REQUIREMENTS
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND
ANY SUCH OFFER WILL BE MADE ONLY THROUGH A REGISTRATION STATEMENT
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AND THE PROSPECTUS PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
AS AMENDED. THE OFFER DOES NOT CONSTITUTE AN EXCHANGE OFFER FOR SHARES THAT ARE
NOT THE SUBJECT OF THE OFFER AND ANY SUCH EXCHANGE OFFER WILL BE MADE ONLY
THROUGH TENDER OFFER MATERIALS PURSUANT TO THE REQUIREMENTS OF THE EXCHANGE ACT
AS WELL AS A REGISTRATION STATEMENT AND THE PROSPECTUS PURSUANT TO THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED.
THIS SUPPLEMENT TO THE OFFER AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
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THE OFFER
1. Terms of the Offer; Expiration Date. On the terms and subject to the
conditions set forth in this Supplement to the Offer, we will accept for
payment and pay for up to the number of Shares that represent, together with
Shares owned by Tyson, 50.1% of the outstanding Shares that are validly
tendered prior to the Expiration Date and not withdrawn.
To the extent more than the number of Shares that represent, together with
Shares owned by Tyson, 50.1% of the outstanding Shares are tendered in the
Offer, we will purchase a number of Shares tendered in the Offer that
represent, together with Shares owned by Tyson, 50.1% of the outstanding
Shares on a pro rata basis (with appropriate adjustment to avoid purchase of
fractional Shares) based on the number of Shares properly tendered by each
stockholder prior to the Expiration Date and not withdrawn. See "The Offer--
Acceptance for Payment and Payment."
"Expiration Date" means 12:00 Midnight, New York City time, on Tuesday,
January 16, 2001, unless we extend the period of time for which the Offer is
open, in which event "Expiration Date" means the latest time and date at which
the Offer, as so extended, shall expire.
The Offer is conditioned upon, among other things, the Minimum Condition
having been satisfied and any waiting periods under applicable antitrust laws
having expired or been terminated. The Offer is also subject to other
conditions as described in "The Offer--Conditions to the Offer." If any such
condition is not satisfied, the Merger Agreement states that we (a) shall
extend the Offer and, subject to certain conditions and to your withdrawal
rights as set forth in "The Offer--Withdrawal Rights," retain all Shares until
the Expiration Date as so extended; or (b) may waive, with the consent of the
Company, the Minimum Condition and, subject to any requirement to extend the
period of time during which the Offer is open, purchase all Shares validly
tendered prior to the Expiration Date and not withdrawn or delay acceptance
for payment or payment for Shares, subject to applicable law, until
satisfaction or waiver of the conditions to the Offer; or (c) if the Offer is
not completed on or before February 28, 2001, shall terminate the Offer and
return all tendered Shares. For a description of our right to extend, amend,
delay or terminate the Offer, see "The Offer--Extension of the Tender Period;
Termination; Amendment," and "The Offer--Conditions to the Offer."
According to the Company's representations in the Merger Agreement, as of
December 28, 2000, there were 105,644,598 Shares outstanding. On the date
hereof, Tyson owns 574,200 Shares. Based on this information, the Minimum
Condition would be satisfied if 52,353,743 Shares are validly tendered and not
withdrawn prior to the Expiration Date.
2. Extension of Tender Period; Termination; Amendment. Under the Merger
Agreement, we are required to extend the Offer from time to time if at the
then scheduled Expiration Date all of the conditions to the Offer have not
been satisfied or waived by us. Each extension shall not exceed the lesser of
10 business days or such fewer days that we believe are necessary for the
conditions to be satisfied. We also have the right to extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the SEC staff applicable to
the Offer or any period required by applicable law. If the conditions to the
Offer are not satisfied, and Tyson has not accepted for payment, and paid for,
Shares tendered in the Offer, on or before February 28, 2001, Tyson must
terminate the Offer and proceed to complete a merger of the Purchaser and the
Company pursuant to the terms of the Merger Agreement. Tyson shall also
terminate the Offer if the Merger Agreement is terminated. We expressly
reserve the right to waive any of the conditions to the Offer and to make any
change in the terms of our conditions to the Offer.
If we increase or decrease the percentage of Shares being sought or
increase or decrease the consideration to be paid for Shares pursuant to the
Offer and the Offer is scheduled to expire less than 10 business days from,
and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified below, the Offer will be
extended until the expiration of such period of 10 business days. If we make a
material change in the terms of the Offer (other than a change in price or
percentage of securities sought) or in
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the information concerning the Offer, or waive a material condition of the
Offer, we will extend the Offer, if required by applicable law, for a period
sufficient to allow you to consider the amended terms of the Offer. In a
published release, the SEC has stated that in its view an offer must remain
open for a minimum period of time following a material change in the terms of
such offer and that the waiver of a condition such as the Minimum Condition is
a material change in the terms of an offer. The release states that an offer
should remain open for a minimum of five business days from the date the
material change is first published, sent or given to stockholders, and that if
material changes are made with respect to information that approaches the
significance of price and percentage of Shares sought, a minimum of 10
business days may be required to allow adequate dissemination and investor
response. "Business day" means any day other than Saturday, Sunday or a
federal holiday and shall consist of the time period from 12:01 a.m. through
12:00 Midnight, New York City time.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement, in the case of an extension of
the Offer to be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date, in accordance
with the public announcement requirements of Rule 14e-1(d) under the Exchange
Act. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under
the Exchange Act, which require that material changes in the information
published, sent or given to any stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes), and without limiting the manner in which we may
choose to make any public announcement, we have no obligation to publish,
advertise or otherwise communicate any public announcement other than by
issuing a press release to the Dow Jones News Service.
If we extend the time during which the Offer is open, or if we are delayed
in its acceptance for payment of or payment for Shares pursuant to the Offer
for any reason, then, without prejudice to our rights under the Offer, the
Depositary may retain tendered Shares on our behalf and those Shares may not
be withdrawn except to the extent tendering stockholders are entitled to
withdrawal rights as described herein under "The Offer--Withdrawal Rights."
However, our ability to delay the payment for Shares that we have accepted for
payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of stockholders promptly after the termination or withdrawal
of such bidder's offer.
Pursuant to Rule 14d-5 under the Exchange Act and Section 220 of the
Delaware General Corporation Law, requests were made to the Company for the
use of the Company's stockholder lists and security position listings for the
purpose of disseminating the Offer to holders of Shares. The Company has
provided us with its stockholder list and security position listings so we can
disseminate the Offer to holders of Shares. We will send this Supplement to
the Offer and the related Letter of Transmittal to record holders of Shares
and to brokers, dealers, banks, trust companies and other nominees whose names
appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
3. Acceptance for Payment and Payment. Upon the terms and subject to the
conditions of the Offer, we will accept for payment and pay for, promptly
after the Expiration Date, up to the number of Shares that represent, together
with Shares owned by Tyson, 50.1% of the outstanding Shares that are validly
tendered prior to the Expiration Date and not withdrawn, subject to the
satisfaction or waiver of the conditions set forth in "The Offer--Conditions
to the Offer." In addition, we reserve the right, subject to compliance with
Rule 14e-1(c) under the Exchange Act, to delay the acceptance for payment or
payment for Shares pending receipt of any regulatory or governmental approvals
to the Offer as described under the caption "The Offer--Certain Legal Matters;
Regulatory Approvals." For a description of our right to terminate the Offer
and not accept for payment or pay for Shares or to delay acceptance for
payment or payment for Shares, see "The Offer--Extension of Tender Period;
Termination; Amendment."
For purposes of the Offer, we shall be deemed to have accepted for payment
tendered Shares when, as and if we give oral or written notice of our
acceptance to the Depositary. We will pay for Shares accepted for payment
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pursuant to the Offer by depositing the purchase price with the Depositary.
The Depositary will act as your agent for the purpose of receiving payments
from us and transmitting such payments to you. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of certificates for such Shares (or of a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in "The Offer-
Procedure for Tendering Shares")), a properly completed and duly executed
Letter of Transmittal and any other required documents. Accordingly, payment
may be made to tendering stockholders at different times if delivery of the
Shares and other required documents occurs at different times. For a
description of the procedure for tendering Shares pursuant to the Offer, see
"The Offer-Procedure for Tendering Shares."
Under no circumstances will we pay interest on the consideration paid for
Shares pursuant to the Offer, regardless of any delay in making such payment.
If we increase the consideration to be paid for Shares pursuant to the Offer,
we will pay such increased consideration for all Shares purchased pursuant to
the Offer.
We reserve the right to transfer or assign, in whole or from time to time
in part, to one or more of our affiliates the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve us of our obligations under the Offer or prejudice your rights to
receive payment for Shares validly tendered and accepted for payment. If any
tendered Shares are not purchased pursuant to the Offer for any reason, other
than as a result of the proration procedures described below, or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased or untendered Shares will be returned (or, in the case of
Shares tendered by book-entry transfer, such Shares will be credited to an
account maintained at the Book-Entry Transfer Facility as defined below),
without expense to you, as promptly as practicable following the expiration or
termination of the Offer.
If more than the number of Shares that represent, together with Shares
owned by Tyson, 50.1% of the outstanding Shares are validly tendered and not
withdrawn prior to the Expiration Date, we will accept for payment and pay for
only the number of Shares that represent, together with Shares owned by Tyson,
50.1% of the outstanding Shares on a pro rata basis (with appropriate
adjustments to avoid purchase of fractional Shares) based on the number of
Shares properly tendered by each stockholder prior to or on the Expiration
Date and not withdrawn. Preliminary results of proration will be announced by
press release as promptly as practicable after the Expiration Date.
Stockholders may obtain such preliminary information from the Information
Agent and may be able to obtain such information from their broker. Unless
otherwise indicated on the Letter of Transmittal, any properly tendered Shares
that are not accepted for payment and paid for because of proration will be
delivered to the exchange agent for the Exchange Offer, along with a copy of
the related Letter of Transmittal. Delivery of these Shares, along with a copy
of the related Letter of Transmittal, will be deemed to constitute valid
tenders of Shares under the Exchange Offer, subject to withdrawal rights.
There will be at least 5 business days between the delivery of unpurchased
shares to the exchange agent for the Exchange Offer and the expiration date of
the Exchange Offer. Stockholders will be receiving shortly documents relating
to the Exchange Offer. Please read them carefully for important information
about the Exchange Offer.
4. Procedure for Tendering Shares. To tender Shares pursuant to the Offer,
either (i) the Depositary must receive at one of its addresses set forth on
the back cover of this Supplement to the Offer (A) a properly completed and
duly executed Letter of Transmittal and any other documents required by the
Letter of Transmittal and (B) certificates for the Shares to be tendered or
delivery of such Shares pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery including an Agent's
Message (as defined below) if the tendering stockholder has not delivered a
Letter of Transmittal), in each case by the Expiration Date, or (ii) the
guaranteed delivery procedure described below must be complied with.
Book Entry Delivery. The Depositary has established an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer, and any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make
delivery of Shares by causing the Book-Entry Transfer Facility to transfer
such Shares into the Depositary's account in accordance with the procedures of
the Book-Entry Transfer Facility. However, although delivery of Shares may be
effected
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through book-entry transfer, the Letter of Transmittal properly completed and
duly executed together with any required signature guarantees or an Agent's
Message and any other required documents must, in any case, be received by the
Depositary at one of its addresses set forth on the back cover of this
Supplement to the Offer by the Expiration Date, or the guaranteed delivery
procedure described below must be complied with. Delivery of the Letter of
Transmittal and any other required documents to the Book-Entry Transfer
Facility does not constitute delivery to the Depositary. "Agent's Message"
means a message, transmitted by the Book-Entry Transfer Facility to, and
received by, the Depositary and forming a part of a book-entry confirmation
which states that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant in the Book-Entry Transfer Facility
tendering the Shares that are the subject of such book-entry confirmation which
such participant has received, and agrees to be bound by, the terms of the
Letter of Transmittal and that the Company may enforce such agreement against
such participant.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution
(including most banks, savings and loan associations and brokerage houses) that
is a member of a recognized Medallion Program approved by The Securities
Transfer Association Inc., including the Securities Transfer Agents Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York
Stock Exchange, Inc. ("NYSE") Medallion Signature Program (MSP) (each, an
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed (i) if the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not completed the box
entitled "Special Payment Instructions" on the Letter of Transmittal or (ii) if
such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If you wish to tender Shares pursuant to the Offer and
cannot deliver such Shares and all other required documents to the Depositary
by the Expiration Date, or cannot complete the procedure for delivery by book-
entry transfer on a timely basis, you may nevertheless tender such Shares if
all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery in the form provided by Purchaser is received by the Depositary
(as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of a book-
entry transfer of such Shares into the Depositary's account at the Book-
Entry Transfer Facility), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantee or an Agent's Message and any other documents required
by the Letter of Transmittal, are received by the Depositary within three
NYSE trading days after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice. The method of
delivery of Shares and all other required documents, including through the
Book-Entry Transfer Facility, is at your option and risk, and the delivery will
be deemed made only when actually received by the Depositary. If certificates
for Shares are sent by mail, we recommend registered mail with return receipt
requested, properly insured.
Back-up Withholding. Under the federal income tax laws, the Depositary will
be required to withhold 31% of the amount of any payments made to certain
stockholders pursuant to the Offer. In order to avoid such back-up withholding,
you must provide the Depositary with your correct taxpayer identification
number and certify that you are not subject to such back-up withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal. If
you are a non-resident alien or foreign entity not subject to back-up
withholding, you must give the Depositary a completed Form W-8 Certificate of
Foreign Status prior to receipt of any payment.
Grant of Proxy. By executing a Letter of Transmittal (or delivering an
Agent's Message), you irrevocably appoint our designees as your proxies in the
manner set forth in the Letter of Transmittal to the full extent of
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your rights with respect to the Shares tendered and accepted for payment by us
(and any and all other Shares or other securities issued or issuable in respect
of such Shares on or after December 12, 2000). All such proxies are irrevocable
and coupled with an interest in the tendered Shares. Such appointment is
effective only upon our acceptance for payment of such Shares. Upon such
acceptance for payment, all prior proxies and consents granted by you with
respect to such Shares and other securities will, without further action, be
revoked, and no subsequent proxies may be given nor subsequent written consents
executed (and, if previously given or executed, will cease to be effective).
Our designees will be empowered to exercise all your voting and other rights as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Company's stockholders, by written consent or
otherwise. We reserve the right to require that, in order for Shares to be
validly tendered, immediately upon our acceptance for payment of such Shares,
we are able to exercise full voting rights with respect to such Shares and
other securities (including voting at any meeting of stockholders then
scheduled or acting by written consent without a meeting).
The tender of Shares pursuant to any one of the procedures described above
will constitute your acceptance of the Offer, as well as your representation
and warranty that (i) you own the Shares being tendered within the meaning of
Rule 14e-4 promulgated under the Exchange Act, (ii) the tender of such Shares
complies with Rule 14e-4 and (iii) you have the full power and authority to
tender, sell, assign and transfer the Shares tendered, as specified in the
Letter of Transmittal. Our acceptance for payment of Shares tendered by you
pursuant to the Offer will constitute a binding agreement between us with
respect to such Shares, upon the terms and subject to the conditions of the
Offer.
Validity. We will determine, in our sole discretion, all questions as to the
form of documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares, and our determination shall be
final and binding. We reserve the absolute right to reject any or all tenders
of Shares that we determine not to be in proper form or the acceptance for
payment of or payment for which may, in the opinion of our counsel, be
unlawful. We also reserve the absolute right to waive any defect or
irregularity in any tender of Shares. Our interpretation of the terms and
conditions of the Offer will be final and binding. None of Tyson, Purchaser,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in
tenders or waiver of any such defect or irregularity or incur any liability for
failure to give any such notification.
5. Withdrawal Rights. You may withdraw tenders of Shares made pursuant to
the Offer at any time prior to the Expiration Date. Thereafter, such tenders
are irrevocable, except that they may be withdrawn after February 9, 2001,
unless such Shares are accepted for payment as provided in this Supplement to
the Offer. If we extend the period of time during which the Offer is open or
are delayed in accepting for payment or paying for Shares pursuant to the Offer
for any reason, then, without prejudice to our rights under the Offer, the
Depositary may, on our behalf, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in this Section.
To withdraw tendered Shares, a written or facsimile transmission notice of
withdrawal with respect to the Shares must be timely received by the Depositary
at one of its addresses set forth on the back cover of this Supplement to the
Offer, and the notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn and the number of Shares to be withdrawn
and the name of the registered holder of Shares, if different from that of the
person who tendered such Shares. If the Shares to be withdrawn have been
delivered to the Depositary, a signed notice of withdrawal with (except in the
case of Shares tendered by an Eligible Institution) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
Withdrawals may not be rescinded and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may
be re-entered by again following one of the procedures described in "The
Offer--Procedures for Tendering Shares" at any time prior to the Expiration
Date.
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We will determine, in our sole discretion, all questions as to the form and
validity (including time of receipt) of any notice of withdrawal, and our
determination shall be final and binding. None of Purchaser, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity in any notice
of withdrawal or waiver of any such defect or irregularity or incur any
liability for failure to give any such notification.
6. Material Tax Considerations. The following discussion is a summary of
material United States federal income tax consequences of the Offer, the
Exchange Offer and the Merger to the holders of Shares who hold their Shares as
capital assets. This discussion is based on the Internal Revenue Code of 1986,
as amended (the "Code"), applicable Treasury regulations, and administrative
and judicial interpretations thereof, each as in effect as of the date of this
Supplement to the Offer, all of which may change, possibly with retroactive
effect.
This discussion does not address all aspects of federal income taxation that
may be relevant to a holder of Shares in light of that holder's particular
circumstances or to a holder subject to special rules, such as (i) a
stockholder who is not a citizen or resident of the United States, (ii) a
financial institution or insurance company, (iii) a tax-exempt organization,
(iv) a dealer or broker in securities, (v) a stockholder that holds its Shares
as part of a hedge, straddle, constructive sale, conversion transaction or
other integrated transaction, or (vi) a stockholder that acquired its Shares
pursuant to the exercise of options or otherwise as compensation. In addition,
this discussion does not address any state, local or foreign tax consequences
of the Offer, the Exchange Offer or the Merger. We urge each holder of Shares
to consult its own tax advisor to determine the particular federal income tax
or other tax consequences to it of participation in the Offer, the Exchange
Offer or the Merger and to determine whether it should participate in the
Offer, the Exchange Offer or the Merger.
The Offer is being made as the first step in a three-step transaction in
which we will acquire 100% of the Company. The second step of the transaction
will be the Exchange Offer. The third step of the transaction will be the
Merger. Each holder of Shares is urged to consider the tax consequences to it
of participating in the Offer, the Exchange Offer and Merger in each of the
following circumstances: (i) if all of its Shares are tendered and accepted for
purchase in the Offer, (ii) if all of its Shares are tendered and accepted for
purchase in the Exchange Offer, (iii) if all of its Shares are exchanged for
Tyson Class A Common Stock pursuant to the Merger, or (iv) if some of its
Shares are tendered and accepted for purchase in the Offer, and its remaining
Shares are exchanged for Tyson Class A Common Stock pursuant to the Exchange
Offer or the Merger.
The Offer, the Exchange Offer and the Merger will be treated as three steps
in an integrated transaction that are intended to be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code (and Tyson, the Purchaser and the Company will be included as parties to
that reorganization within the meaning of Section 368(b) of the Code) assuming
the following factual assumptions (which we refer to as supporting conditions)
are met:
. the Offer, the Exchange Offer and the Merger are completed under the
current terms of the Merger Agreement,
. the aggregate fair market value of the Tyson Class A Common Stock
delivered as consideration for Shares in the Exchange Offer and the
Merger exceeds a minimum percentage (approximately 40 percent under one
United States Supreme Court case) of the aggregate fair market value of
the cash and Tyson Class A Common Stock delivered as consideration for
Shares in the Offer, the Exchange Offer and the Merger, and
. the Exchange Offer and the Merger are completed promptly after the
Offer.
In addition to the supporting conditions, Tyson and the Company will use
their reasonable best efforts to cause Milbank, Tweed, Hadley & McCloy LLP and
Wachtell, Lipton, Rosen & Katz, respectively, to deliver legal opinions to the
effect that the Offer, the Exchange Offer and the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code (and Tyson, Purchaser and the Company will be included as
parties to that reorganization within the meaning of Section 368(b) of the
Code). In rendering these opinions, Milbank, Tweed, Hadley & McCloy LLP and
Wachtell, Lipton, Rosen & Katz will
15
<PAGE>
rely upon representations and covenants to be made by Tyson, Purchaser and the
Company, including those contained in certificates of officers of Tyson,
Purchaser and the Company. In addition, the discussion of the material U.S.
federal income tax consequences of the Offer, the Exchange Offer and the
Merger discussed below assumes the absence of changes in pertinent facts or
law between the date of this Supplement to the Offer and the Effective Time.
If any of those representations, covenants or assumptions is inaccurate, the
tax consequences of the Offer, the Exchange Offer and the Merger could differ
materially from those summarized below. In addition, the ability to satisfy
the supporting conditions, and therefore the federal income tax consequences
of the Offer, the Exchange Offer and the Merger, depend in part on facts that
will not be available before the completion of the Offer, the Exchange Offer
or the Merger (for example, the fair market value of the Tyson Class A Common
Stock delivered as consideration in the Exchange Offer and the Merger). There
can be no assurances that the Exchange Offer and the Merger will be completed,
or that the supporting conditions will be satisfied. If the supporting
conditions are not satisfied, the tax consequences of the Exchange Offer and
the Merger could differ materially from those discussed below.
Assuming that the Offer, the Exchange Offer and the Merger, taken together,
are treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code (and Tyson, Purchaser and the Company
are included as parties to that reorganization within the meaning of Section
368(b) of the Code), for federal income tax purposes:
. A holder of Shares that has all of its Shares purchased in the Offer
will recognize gain or loss, measured by the difference between the cash
received and such holder's adjusted tax basis in such Shares. This gain
or loss will be capital gain or loss provided such holder's Shares were
held as a capital asset, and will be long-term capital gain or loss if
the holder has held the Shares tendered in the Offer for more than one
year at the time such Shares are purchased in the Offer.
. A holder of Shares that exchanges all of its Shares for Tyson Class A
Common Stock pursuant to the Exchange Offer or the Merger will not
recognize any gain or loss except gain realized with respect to cash
received in lieu of fractional Shares.
. A holder of Shares that has some of its Shares accepted for tender in
the Offer and exchanges its remaining Shares for Tyson Class A Common
Stock pursuant to the Exchange Offer or the Merger will recognize gain
(but not loss) realized in respect of any Share but not in excess of the
amount of cash received or deemed received for that Share. The amount of
gain realized in respect of any Share is the excess of the amount
realized for that Share over the holder's tax basis in that Share. The
consideration received or deemed received for any one Share, whether
tendered in the Offer, the Exchange Offer or the Merger, will be the
amount a holder realizes which is attributable to that Share. A holder's
aggregate amount realized is the sum of (i) the amount of cash the
holder received pursuant to the Offer plus (ii) the fair market value of
Tyson Class A Common Stock received in the Exchange Offer or the Merger.
The gain realized calculation must be made separately for each Share
surrendered, and a loss realized on one Share may not be used to offset
a gain realized on another Share. Under most circumstances, a holder's
gain will be capital gain and will be long-term capital gain if the
holder has held the holder's Shares for more than one year. However, for
certain holders, including holders who tender only a portion of their
Shares in the Offer and holders who actually or constructively own
shares in Tyson (other than the Tyson Class A Common Stock to be
received in the Exchange Offer or the Merger) or who constructively own
Shares under certain attribution rules under the Code, such gain might
be treated as dividend income. Shareholders should consult their tax
advisors regarding whether any gain they recognize will be capital gain
or dividend income to them.
. If a holder of Shares receives cash in lieu of fractional shares of
Tyson Class A Common Stock in the Exchange Offer or the Merger, the
holder will be required to recognize gain or loss measured by the
difference between the amount of cash received in lieu of that
fractional share and the portion of the tax basis of that holder's
Shares allocable to that fractional share. This gain or loss will be
capital gain or loss provided such holder's Shares were held as a
capital asset, and will be long-term capital gain or loss if the holder
has held the Shares deemed exchanged for that fractional share of Tyson
Class A
16
<PAGE>
Common Stock for more than one year at either the expiration date of the
Exchange Offer or the Effective Time, as applicable.
. A holder of Shares will have a tax basis in Tyson Class A Common Stock
received in the Exchange Offer or the Merger equal to the tax basis in
its Shares surrendered by that holder in the Offer, the Exchange Offer
and the Merger, (A) reduced by (i) any tax basis in such Shares that is
allocable to fractional share interests in Tyson Class A Common Stock
for which cash is received and (ii) the amount of cash received by such
holder, if any, pursuant to the Offer, and (B) increased by the amount
of gain, if any, recognized by such holder in the Offer (but not by gain
recognized upon the receipt of cash in lieu of fractional shares of
Tyson Class A Common Stock in the Exchange Offer or the Merger).
. The holding period for Tyson Class A Common Stock received in exchange
for Shares in the Exchange Offer or the Merger will include the holding
period for Shares surrendered in the Exchange Offer or the Merger, as
applicable, provided such Shares were held as a capital asset.
The tax consequences described above are based on factual assumptions,
including the satisfaction of the supporting conditions. If those factual
assumptions are not satisfied, the federal income tax consequences of the
Exchange Offer and the Merger to holders of Shares could differ materially
from those summarized above. In particular, although holders of Shares that
have Shares accepted for tender in the Offer will recognize gain for federal
income tax purposes regardless of whether these factual assumptions are
satisfied, the Exchange Offer or the Merger may be taxable transactions for
federal income tax purposes if these factual assumptions are not satisfied.
If the Exchange Offer and the Merger are consummated but fail to be treated
as part of a reorganization within the meaning of Section 368(a) of the Code
(or Tyson, Purchaser or the Company is not included as a party to that
reorganization within the meaning of Section 368(b) of the Code), the Exchange
Offer and the Merger will be a taxable transaction for federal income tax
purposes. In that event, each holder of Shares that exchanges Shares for Tyson
Class A Common Stock in the Exchange Offer or the Merger will recognize gain
or loss measured by the difference between the fair market value of Tyson
Class A Common Stock received (together with any cash received in lieu of
fractional shares) and such stockholder's adjusted tax basis in the Shares
exchanged in the Exchange Offer and the Merger. The gain or loss will be
capital gain or loss provided such Shares were held as a capital asset, and
will be long-term capital gain or loss if such Shares were held for more than
one year at either the expiration date of the Exchange Offer or the Effective
Time of the Merger, as applicable.
The federal income tax discussion set forth above is included for general
information only and is based upon present law. Due to the individual nature
of tax consequences, you are urged to consult your tax advisors as to the
specific tax consequences to you of the Offer, the Exchange Offer and the
Merger, including the effects of applicable state, local or other tax laws.
7. Price Range of Shares; Dividends. The Shares are listed and principally
traded on the NYSE. The following table sets forth for the periods indicated
the high and low sales prices per Share on the NYSE based on published
financial sources.
<TABLE>
<CAPTION>
High Low
------ ------
<S> <C> <C>
1999
First Quarter............................................. $29.31 $19.38
Second Quarter............................................ 23.88 16.75
Third Quarter............................................. 25.56 22.00
Fourth Quarter............................................ 25.38 17.75
2000
First Quarter............................................. $18.50 $11.00
Second Quarter............................................ 18.88 13.19
Third Quarter............................................. 17.94 14.00
Fourth Quarter............................................ 26.94 17.25
</TABLE>
17
<PAGE>
On September 29, 2000, the last full trading day before the date the
Company entered into the Rawhide Agreement (as defined herein), the closing
price of a Share of the Company was $18.31. On November 10, 2000, the last
full trading day before the date Smithfield Foods, Inc. made its unsolicited
proposal to the Special Committee for a stock-for-stock merger, the closing
price of a Share of the Company was $20.88.
Between January 1, 2000 and January 4, 2001, the price per Share on the
NYSE ranged between $11.00 and $28.63. On January 4, 2001, the last full
trading day before the date of this Supplement to the Offer, the reported
closing sales price per Share on the NYSE was $27.06. We urge you to obtain
current market quotations for the Shares. The Company's annual dividend is
$.10.
8. Certain Information Concerning the Company.
General. The Company is a Delaware corporation, with principal executive
offices at 800 Stevens Port Drive, Dakota Dunes, South Dakota 57049. The
telephone number of the Company's executive offices is (605) 235-2061. The
Company is one of the world's largest manufacturers of fresh meats and frozen
and refrigerated food products, with 1999 annual sales in excess of $14.0
billion. The Company has two primary business segments: Fresh Meats, which
produces boxed beef, pork, hides and other allied products; and Foodbrands,
which manufactures various value added products including pepperoni, pizza
toppings, appetizers, prepared meals, Mexican foods, soups, sauces, and
branded and processed meats. The Company has over 60 manufacturing locations
in the United States and internationally. The Company has sales offices in
North America, Central America, Europe, and Asia. The Company employs
approximately 50,000 people.
Selected Financial Data. The following selected consolidated financial data
relating to the Company and its subsidiaries has been taken or derived from
the audited financial statements contained in the Company's Current Report on
Form 8-K dated November 3, 2000, and the unaudited financial statements
contained in the Company's Form 10-Q for the 39 weeks ended September 23,
2000. More comprehensive financial information is included in such reports and
the other documents filed by the Company with the SEC, and the financial data
set forth below is qualified in its entirety by reference to such reports and
other documents, including the financial statements and related notes
contained therein. Such reports and other documents may be obtained as
described in the section captioned "Available Information" below. The selected
financial balance sheet data and cash flow data for the fiscal years ended
December 30, 1995 and December 28, 1996 are derived from the Company's
historical audited financial statements contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 27, 1999 and do not
give effect to the acquisition by the Company of Corporate Brand Foods
America, Inc. on February 7, 2000 (the "CBFA Acquisition"). The balance sheet
data for the nine months ended September 30, 1999 gives effect to the CBFA
Acquisition based on information provided by the Company.
<TABLE>
<CAPTION>
Nine Months
Years ended December 31, Ended September 30,
------------------------------------------- --------------------------
1995 1996 1997 1998 1999 1999 2000
------- ------- ------- ------- ------- ------------ ------------
(in millions of dollars, except per (in millions of dollars,
share amounts) except per share
amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues................ $12,668 $12,539 $13,446 $13,277 $14,635 $ 10,625 $12,201
Income before
extraordinary item..... 280 199 120 208 317 235 172
Net income.............. 258 199 120 193 317 235 157
Balance Sheet Data:
Total assets............ $ 2,028 $ 2,174 $ 2,972 $ 3,313 $ 4,151 $ 4,063 $ 4,395
Long-term debt.......... 261 260 635 761 790 781 663
Short-term borrowings... 1 1 199 152 555 603 801
Stockholders' equity.... 1,023 1,204 1,244 1,409 1,717 1,639 1,888
Cash Flow Data:
Cash flows from
operations............. $ 351 $ 268 $ 207 $ 371 $ 298 $ 60 $ 215
Cash flows from
financing activities... (174) -- 124 (15) 425 478 101
Cash flows (used in)
investing activities... (146) (290) (354) (397) (720) (539) (315)
Earnings Per Share Data:
Basic earnings per
share:
Before extraordinary
item................... $2.96 $2.10 $1.25 $2.13 $3.25 $2.41 $1.60
Extraordinary item...... (.24) -- -- (.16) -- -- (.14)
Basic earnings per
share.................. 2.72 2.10 1.25 1.97 3.25 2.41 1.46
Diluted earnings per
share:
Before extraordinary
item................... 2.92 2.07 1.18 1.95 2.94 2.19 1.58
Extraordinary item...... (.23) -- -- (.14) -- -- (.14)
Diluted earnings per
share.................. 2.69 2.07 1.18 1.81 2.94 2.19 1.44
Cash dividends per
share.................. $0.10 $0.10 $0.10 $0.10 $0.10 $0.075 $0.075
</TABLE>
18
<PAGE>
Projections. Prior to entering into the Merger Agreement, the Company
provided to Tyson certain information which was not publicly available,
including certain projected financial data (the "Projections") for the fiscal
years 2000 through 2005. The Company has advised us that it 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.
IBP, INC.
PROJECTED FINANCIAL PERFORMANCE
<TABLE>
<CAPTION>
Fiscal Years
------------------------------------------------
Item 2000 2001 2002 2003 2004 2005
---- ------- ------- ------- ------- ------- -------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Total Revenues................. $16,600 $17,300 $18,000 $18,600 $18,800 $19,500
EBIT........................... 473 446 543 619 693 760
Capital Expenditures........... 453 331 300 300 300 300
Net Income..................... 200 212 277 332 388 439
Earnings Per Share............. $ 2.21* $ 1.98 $ 2.58 $ 3.10 $ 3.61 $ 4.09
</TABLE>
--------
* Year 2000 Earnings Per Share was calculated excluding one time adjustments
and year end closing adjustments.
The Projections were not prepared with a view to public disclosure or
compliance with published guidelines of the SEC or the American Institute of
Certified Public Accountants regarding prospective financial information. In
addition, the Projections were not prepared with the assistance of or
reviewed, compiled or examined by, independent auditors. The Projections
reflect numerous assumptions, all made by the Company 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 the Company's control. Accordingly, there can be no
assurance that the assumptions made in preparing the Projections will prove
accurate, and actual results may be materially greater or less than those
contained in the Projections.
The inclusion of the Projections in this Supplement to the Offer should not
be regarded as an indication that the Company, Tyson or Purchaser or any of
the Company'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, we caution
against reliance on such information. The Company has advised us that it does
not intend to update or revise the Projections to reflect circumstances
existing after the date when prepared or to reflect the occurrence of future
events, unless required by law.
Forward Looking Statements. This Supplement to the Offer, including
information included or incorporated by reference in this document, contains
certain forward-looking statements concerning the financial condition, results
of operations and business of Tyson following the consummation of its proposed
acquisition of the Company, the anticipated financial and other benefits of
such proposed acquisition and the plans and objectives of the Company's
management following such proposed acquisition, including, without limitation,
statements relating to the cost savings expected to result from the proposed
acquisition, anticipated results of operations of the combined Company
following the proposed acquisition, projected earnings per share of the
combined Company following the proposed acquisition and the restructuring
charges estimated to be incurred in connection with the proposed acquisition.
Generally, the words "will," "may," "should," "continue," "believes,"
"expects," "intends," "anticipates" or similar expressions identify forward-
looking statements.
These forward-looking statements involve certain risks and uncertainties.
Factors that could cause actual results to differ materially from those
contemplated by the forward-looking statements include, among others, the
following factors:
. the risk that Tyson and the Company will not successfully integrate
their combined operations;
. the risk that Tyson and the Company will not realize estimated
synergies;
19
<PAGE>
. unknown costs relating to the proposed transaction;
. risks associated with the availability and costs of financing, including
cost increases due to rising interest rates;
. fluctuations in the cost and availability of raw materials, such as feed
grain costs;
. changes in availability and relative costs of labor and contract
growers;
. market conditions for finished products, including the supply and
pricing of alternative proteins;
. effectiveness of advertising and marketing programs;
. changes in regulations and laws, including changes in accounting
standards, environmental laws, and occupational, health and safety laws;
. access to foreign markets together with foreign economic conditions,
including currency fluctuations;
. the effect of, or changes in, general economic conditions; and
. adverse results from ongoing litigation.
Tyson undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise. See "Where You Can Find More Information" below.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, Suite 1400, 500 W. Madison Street,
Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the SEC at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or free of charge at
the Web site maintained by the SEC at http://www.sec.gov.
Except as otherwise stated in this Supplement to the Offer, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the SEC or otherwise publicly
available. Although we have no knowledge that would indicate that any
statements contained herein based upon such reports and documents are untrue,
we take no responsibility for the accuracy or completeness of the information
contained in such reports and other documents or for any failure by the
Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but that are unknown to us.
9. Certain Information Concerning Purchaser and Tyson. Purchaser is a
Delaware corporation incorporated on December 8, 2000, with principal
executive offices at 2210 West Oaklawn Drive, Springdale, Arkansas 72762-6999.
The telephone number of our principal executive offices is (501) 290-4000. To
date, Purchaser has engaged in no activities other than those incident to
Purchaser's formation and the commencement of the Offer. Purchaser is a
wholly-owned subsidiary of Tyson.
Tyson is a Delaware corporation with principal executive offices at 2210
West Oakland Drive, Springdale, Arkansas 72762-6999. The telephone number of
Tyson's executive offices is (501) 290-4000. Tyson produces, distributes and
markets chicken, Mexican foods, prepared foods, animal and pet food
ingredients and live swine. Tyson's goal is to be the undisputed world leader
in growing, processing and marketing chicken and chicken-
20
<PAGE>
based food products. Tyson's integrated operations consist of breeding and
rearing chickens, as well as the processing, further-processing and marketing
of these food products. Tyson's products are marketed and sold to national and
regional grocery chains, regional grocery wholesalers, clubs and warehouse
stores, military commissaries, industrial food processing companies, national
and regional chain restaurants or their distributors, international export
companies and domestic distributors who service restaurants, foodservice
operations such as plant and school cafeterias, convenience stores, hospitals
and other vendors. Tyson's integrated chicken processes include genetic
research, breeding, hatching, rearing, ingredient procurement, feed milling,
veterinary and other technical services, and related transportation and
delivery services.
Tyson is a fully-integrated producer, processor and marketer of a variety of
food products. Tyson presently identifies segments based on the products
offered and the nature of customers, resulting in four reported business
segments: Food Service, Consumer Products, International and Swine.
Tyson's chicken business consists of the Food Service, Consumer Products and
International segments. Food Service includes fresh, frozen and value-enhanced
chicken products sold through food service and specialty distributors who
deliver to restaurants, schools and other accounts. Consumer Products include
fresh, frozen and value-enhanced chicken products sold through retail markets
for at-home consumption and through wholesale club markets targeted to small
food service operators, individuals and small businesses. Tyson's International
segment markets and sells the full line of Tyson chicken products.
Tyson's farrow to finish swine operations, which include genetic and
nutritional research, breeding, farrowing and feeder pig finishing and the
marketing of live swine to regional and national packers, are conducted in
Arkansas, Missouri, North Carolina and Oklahoma.
Tyson's other business category includes the Prepared Foods group,
consisting of Mexican Original, Culinary Foods and Mallard's Food Products.
Mexican Original produces flour and corn tortilla products. Culinary Foods and
Mallard's Food Products produce specialty pasta and meat dishes for
restaurants, airlines and other major customers. Additionally, the other
category includes Tyson's wholly-owned subsidiaries involved in supplying
chicken breeding stock and trading agricultural goods worldwide.
The name, business address, principal occupation or employment, five year
employment history and citizenship of each director and executive officer of
Tyson and Purchaser and certain other information are set forth on Schedule I.
Except as set forth in this Supplement to the Offer, during the past two years,
none of us, nor, to our best knowledge, any of the persons listed on Schedule I
hereto, has had any business relationship or transaction with the Company or
any of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the SEC applicable to the Offer.
Except as set forth in this Supplement to the Offer, none of the persons listed
in Schedule I, nor any of their respective associates or majority-owned
subsidiaries, beneficially owns any securities of the Company. Except as set
forth in this Supplement to the Offer, there have been no contacts,
negotiations or transactions between us or any of our subsidiaries or, to our
best knowledge, any of the persons listed in Schedule I to this Supplement to
the Offer, on the one hand, and the Company or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets. None of the persons listed in Schedule I has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). Except as described in Schedule I,
none of the persons listed in Schedule I has, during the past five years, been
a party to any judicial or administrative proceeding (except for matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
On November 15, 2000, John S. Lea sold 1,000 Shares for $22.25 per Share.
Mr. Lea had purchased these Shares on March 17, 2000. As of January 4, 2001,
Tyson beneficially owned 574,200 Shares, representing less than 1% of the
outstanding Shares. Transactions in the Shares by Tyson effected in the past 60
days are described
21
<PAGE>
in Schedule II hereto. All such transactions were effected by Tyson in the
open market on the NYSE at the prices per share indicated on Schedule II.
On December 5, 2000, Tyson announced that it expects to resume purchases
under its ongoing corporate stock repurchase program. Since December 4, 2000,
the day Tyson announced its proposal to acquire the Company, Tyson has
repurchased 1,595,700 shares of Tyson Class A Common Stock in the open market
at prices ranging from $11.15 to $12.75 per share. During fiscal 2000 Tyson
repurchased 4.0 million shares of Tyson Class A Common Stock under this
program. Depending on market conditions and the price for Tyson Class A Common
Stock, and subject to applicable SEC rules and regulations, including without
limitation Regulation M, Tyson may continue to purchase, from time to time,
shares of Tyson Class A Common Stock in the open market.
Selected Financial Data. The following selected consolidated financial data
relating to Tyson and its subsidiaries has been taken or derived from the
audited financial statements contained in the Tyson's Form 10-K for fiscal
years ended September 27, 1997, October 3, 1998 and September 30, 2000. More
comprehensive financial information is included in such reports and the other
documents filed by Tyson with the SEC, which are incorporated by reference in
this Supplement to the Offer. Such reports and other documents may be obtained
as described in the section captioned "Available Information" below.
<TABLE>
<CAPTION>
Years ended
---------------------------------------------------------------
September 28, September 27, October 3, October 2, September 30,
1996 1997 1998 1999 2000
------------- ------------- ---------- ---------- -------------
(in millions of dollars, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues................ $6,454 $6,356 $7,414 $7,363 $7,158
Income before minority
interest............... 84 186 25 242 151
Net income.............. 87 186 25 230 151
Balance Sheet Data:
Total assets............ $4,544 $4,411 $5,242 $5,083 $4,854
Long-term debt.......... 1,806 1,558 1,967 1,515 1,357
Short-term borrowings... 169 132 162 289 185
Stockholders' equity.... 1,542 1,621 1,970 2,128 2,175
Cash Flow Data:
Cash flows from
operations............. $ 173 $ 541 $ 496 $ 547 $ 587
Cash flows from (used
in) financing
activities............. 52 (418) (27) (395) (366)
Cash flows from (used
in) investing
activities............. (222) (136) (446) (166) (206)
Earnings Per Share Data:
Basic earnings per
share.................. $ 0.40 $ 0.86 $ 0.11 $ 1.00 $ 0.67
Diluted earnings per
share.................. $ 0.40 $ 0.85 $ 0.11 $ 1.00 $ 0.67
Cash Dividends Per
Share:
Class A Common Stock.... $0.080 $0.095 $0.100 $0.115 $0.160
Class B Common Stock.... $0.072 $0.086 $0.090 $0.104 $0.144
</TABLE>
--------
1. The results for 2000 include a $24 million pretax charge for bad debt
writeoff related to the January 31, 2000, bankruptcy filing of AmeriServe
Food Distribution, Inc. and a $9 million pretax charge related to Tyson de
Mexico losses.
2. The results for 1999 include a $77 million pretax charge for loss on sale
of assets and impairment write-downs.
3. Significant business combination accounted for as a purchase: Hudson Foods,
Inc. on January 9, 1998.
4. The results for 1998 include a $215 million pretax charge for asset
impairment and other charges.
22
<PAGE>
Available Information. Tyson is subject to the informational requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. Tyson is required to disclose in such
proxy statements certain information, as of particular dates, concerning its
directors and officers, their remuneration, stock options granted to them, the
principal holders of its securities and any material interests of such persons
in transactions with Tyson. Such reports, proxy statements and other
information should be available for inspection and copying at the offices of
the SEC in the same manner as set forth with respect to the Company in
"Certain Information Concerning the Company--Available Information" and the
library of the NYSE, 20 Broad Street, New York, New York 10005.
10. Certain Comparative and Pro Forma Information.
Comparative Per Share Data. The following table sets forth, for each of the
periods indicated, income per share from continuing operations and book value
per share separately for Tyson and the Company on a historical basis, for
Tyson on a historical pro forma combined basis and on a historical pro forma
combined basis per Company equivalent share. The information in the table
below should be read in conjunction with the historical financial statements
of the corporations referred to in this Supplement to the Offer in the
sections captioned "Selected Financial Data" of each of Tyson and the Company.
We used an assumed exchange ratio of 2.381 in computing the historical pro
forma combined and equivalent pro forma combined per share data. We calculated
this exchange ratio by dividing $30.00 by $12.60 (the closing price of Tyson
Class A Common Stock on the NYSE on January 2, 2001 was $11.81). See "Merger
Agreement and Voting Agreement--The Merger Agreement."
The Tyson pro forma data was derived by combining the historical
consolidated financial information of Tyson and the Company using the purchase
method of accounting for business combinations in accordance with U.S.
generally accepted accounting principles.
The Company's equivalent pro forma per share data shows the effect of the
Merger from the perspective of an owner of Shares. The information was
computed by multiplying the Tyson/Company historical pro forma information by
the assumed exchange ratio of 2.381 and then multiplying the result by 49.9%,
which represents the percentage of total consideration for the acquisition of
the Company that will be paid in Tyson Class A Common Stock. The remaining
50.1% of the Company shares will be purchased by Tyson for cash pursuant to
the Offer.
The historical pro forma combined per share data may not be indicative of
the operating results or financial position that would have occurred if the
Merger had been consummated at the beginning of the periods indicated, and may
not be indicative of future operating results or financial position.
23
<PAGE>
The information in the table below should be read in conjunction with the
historical financial statements incorporated by reference in this Supplement
to the Offer in the sections captioned "Selected Financial Data" of each of
Tyson and the Company.
<TABLE>
<S> <C>
Tyson Historical Per Share (Year ended September 30, 2000)
Earnings from continuing operations
Basic earnings per share.......................................... $ 0.67
Diluted earnings per share........................................ 0.67
Cash Dividends
Class A........................................................... 0.160
Class B........................................................... 0.144
Book Value.......................................................... 9.67
Company Historical Per Share (Year ended December 25, 1999)
Earnings from continuing operations
Basic earnings per share.......................................... $ 3.25
Diluted earnings per share........................................ 2.94
Cash dividends...................................................... 0.10
Book Value.......................................................... 17.78
Tyson/Company Historical Pro Forma Per Share (Year ended September 30,
2000)
Earnings from continuing operations
Earnings per share before extraordinary loss
Basic........................................................... $ 0.78
Diluted......................................................... 0.78
Earnings per share after extraordinary loss
Basic........................................................... 0.74
Diluted......................................................... 0.73
Cash dividends
Class A........................................................... 0.085
Class B........................................................... 0.144
Book Value.......................................................... 10.70
Equivalent Historical Pro Forma Per Share for the Company (Twelve
Months ended September 30, 2000)
Earnings from continuing operations
Earnings per share before extraordinary loss
Basic........................................................... $ 0.93
Diluted......................................................... 0.93
Earnings per share after extraordinary loss
Basic........................................................... 0.88
Diluted......................................................... 0.87
Cash dividends...................................................... 0.101
Book Value.......................................................... 12.71
</TABLE>
Pro Forma Financial Information. The following Unaudited Pro Forma Combined
Condensed Balance Sheet at September 30, 2000 (the "Pro Forma Balance Sheet")
and the Unaudited Pro Forma Combined Condensed Statement of Income for the
fiscal year ended September 30, 2000 (the "Pro Forma Income Statement" and,
together with the Pro Forma Balance Sheet, the "Pro Forma Financial
Statements") are presented using the purchase method of accounting to give
effect to the Merger and reflect the combination of consolidated historical
financial data of the Company and Tyson.
The Pro Forma Balance Sheet is derived from the audited financial
statements of Tyson contained in Tyson's Annual Report on Form 10-K for the
fiscal year ended September 30, 2000 (the "Tyson 10-K") and the audited
financial statements of the Company contained in the Company's Current Report
on Form 8-K dated
24
<PAGE>
November 3, 2000 (the "Company 8-K") (restating the fiscal year ended December
25, 1999 for the acquisition of Corporate Brand Foods America, Inc. accounted
for as a pooling of interests) and the Company's Quarterly Report on Form 10-Q
for the 39 weeks ended September 23, 2000 (the "Company 10-Q") and is
presented as if the Merger had occurred on September 30, 2000. The Unaudited
Pro Forma Combined Condensed Income Statement for the fiscal year ended
September 30, 2000 has been derived from the audited financial statements of
Tyson contained in the Tyson 10-K and the financial statements of the Company
contained in the Company 8-K and the Company 10-Q, and is presented as if the
Merger had occurred on October 3, 1999.
The pro forma adjustments reflected in the Pro Forma Financial Statements
represent estimated values and amounts based on available information
regarding the Company's assets and liabilities. The actual adjustments that
will result from the Merger will be based on further evaluations and may
differ substantially from the adjustments presented herein. The Pro Forma
Financial Statements are presented for illustrative purposes only and are not
necessarily indicative of the financial position or operating results that
would have been achieved had the Merger been consummated as of the dates
indicated or of the results that may be obtained in the future.
The Pro Forma Financial Statements should be read in conjunction with the
accompanying notes and the historical financial statements of the corporations
incorporated by reference or referred to in this Supplement to the Offer in
the sections captioned "Selected Financial Data" of each of Tyson and the
Company.
25
<PAGE>
TYSON FOODS, INC.
Unaudited Pro Forma Combined Balance Sheet
September 30, 2000
(in millions)
<TABLE>
<CAPTION>
(a) (b) (c) (a)+(b)+(c)
Pro Forma
Tyson Sept. 23, 2000 -------------------------
Foods, Inc. IBP, inc. Adjustments Combined
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash
equivalents............ $ 43 $ 35 $(1,822)(2) $ 78
1,822 (2)
Accounts receivable..... 520 795 -- 1,315
Inventories............. 965 722 -- 1,687
Other current assets.... 48 95 -- 143
------ ------ ------- -------
Total Current Assets.. 1,576 1,647 0 3,223
Net Property, Plant and
Equipment.............. 2,141 1,551 -- 3,692
Excess of Investments
over Net Assets
Acquired............... 937 1,047 (1,047)(1)
2,327 (1)
235 (5) 3,499
Investments and Other
Assets................. 200 150 -- 350
------ ------ ------- -------
Total Assets.......... $4,854 $4,395 $ 1,515 $10,764
====== ====== ======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable........... $ 62 $ 746 $ -- $ 808
Current portion of long-
term debt 123 54 -- 177
Trade accounts payable.. 346 417 -- 763
Other accrued
liabilities............ 355 450 -- 805
------ ------ ------- -------
Total Current
Liabilities.......... 886 1,667 -- 2,553
Long-Term Debt.......... 1,357 663 1,822 (2) 3,842
Deferred Income Taxes... 385 177 -- 562
Other Liabilities....... 51 -- -- 51
Shareholders' Equity:
Class A Common Stock.... 14 5 (5)(3)
13 (4) 27
Class B Common Stock.... 10 -- -- 10
Capital in excess of par
value.................. 735 442 (442)(3)
1,568 (4) 2,303
Retained earnings....... 1,715 1,522 (1,522)(3) 1,715
Accumulated other
comprehensive income... (5) (10) 10 (3) (5)
------ ------ ------- -------
2,469 1,959 (378) 4,050
Less treasury stock..... 284 71 (71)(3) 284
Less unamortized
deferred compensation.. 10 -- -- 10
------ ------ ------- -------
2,175 1,888 (307) 3,756
------ ------ ------- -------
Total Liabilities and
Shareholders'
Equity............... $4,854 $4,395 $ 1,515 $10,764
====== ====== ======= =======
</TABLE>
See accompanying notes.
26
<PAGE>
Tyson Foods, Inc.
Unaudited Pro Forma Combined Statement of Income
Fiscal Year Ended September 30, 2000
(in millions)
<TABLE>
<CAPTION>
(a)+(b)+(c)
(except per
(a) (b) (c) share data)
Pro Forma
------------------------
Tyson IBP,
Foods, Inc. Inc. Adjustments Combined
----------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Sales............................ $7,158 $16,211 $ -- $23,369
Cost of Sales.................... 6,044 15,145 -- 21,189
------ ------- ----- -------
1,114 1,066 -- 2,180
Expenses:
Selling, general and
administrative................ 766 574 (31)(1)
64 (1) 1,373
------ ------- ----- -------
Operating Income................. 348 492 (33) 807
Other Expenses:
Interest....................... 115 83 146 (2) 344
Other.......................... (1) -- -- (1)
------ ------- ----- -------
Income Before Taxes on Income and
Extraordinary Loss.............. 234 409 (179) 464
Provision for Income Taxes....... 83 155 (52)(3) 186
Extraordinary Loss............... -- 15 -- 15
------ ------- ----- -------
Net Income....................... $ 151 $ 239 ($127) $ 263
====== ======= ===== =======
Weighted Average Shares
Outstanding
Basic.......................... 225 104 351
Diluted........................ 226 107 353
Earnings Per Share before
Extraordinary Loss
Basic.......................... $ 0.67 $ 2.40 $ 0.78
Diluted........................ $ 0.67 $ 2.33 $ 0.78
Earnings Per Share after
Extraordinary Loss
Basic.......................... $ 0.67 $ 2.26 $ 0.74
Diluted........................ $ 0.67 $ 2.19 $ 0.73
</TABLE>
See accompanying notes.
27
<PAGE>
Notes To Unaudited Pro Forma Combined Balance Sheet
(1) To record the remaining excess of investments over net assets acquired as
follows (in millions):
<TABLE>
<S> <C>
Purchase consideration:
Cash paid for 50.1% of outstanding Shares (52,910,777 Shares at $30
per share)......................................................... $ 1,587
Tyson Class A Common Stock issued for 49.9% of the outstanding
Shares based upon an average trading price of $12.60, which is the
lower end of the range of $12.60 to $15.40 of Tyson's average
trading price of Class A Common Stock set forth in the Merger
Agreement (52,699,557 at $30)...................................... 1,581
Estimated acquisition expenses........................................ 235
-------
Total acquisition consideration................................... $ 3,403
=======
Total acquisition costs allocated:
Book value of the Company's net assets acquired..................... $ 1,888
To eliminate the Company's excess of investments over net assets
acquired........................................................... (1,047)
Remaining amount of excess of investment over net assets acquired... 2,562
-------
Total acquisition consideration................................... $ 3,403
=======
</TABLE>
(2) To reflect incremental additional debt required to finance the
acquisition. The amounts reflect the additional borrowings that will be
required to purchase the Shares for cash of $1,587 million plus estimated
acquisition costs of $235 million. A portion of the Company's debt may be
retired and replaced with new debt, however it is expected that the
current maturities will approximate that presented above.
(3) To eliminate the Company's shareholders equity balances.
(4) To reflect the incremental shares of Tyson Class A Common Stock to be
issued for the acquisition based upon the maximum exchange ratio in the
Merger Agreement of 2.381.
(5) To record $67 million of termination fees to be paid to Donaldson, Lufkin
& Jenrette, Inc. and $168 million of estimated acquisition fees.
Notes To Unaudited Pro Forma Statement Of Income
(1) To reflect amortization of the excess of investment over net assets
acquired associated with the acquisition over forty years and reverse the
Company's amortization of $31 million on existing excess of investment
over net assets acquired.
(2) To reflect increased interest expense resulting from the acquisition debt
of $1,822 million based on an assumed interest rate of 8% representing
Tyson's average interest rate for the fiscal year ended September 30, 2000
for total debt.
(3) To reflect the net tax benefit resulting from the additional interest
expense at Tyson's effective tax rate of 35.5%.
(4) The following schedule conforms the Company's most recent fiscal year to
Tyson's fiscal year ended September 30, 2000 (in millions):
28
<PAGE>
<TABLE>
<CAPTION>
(c)
(a) (b) (a)-(b) (d) (c)+(d)
Combined
Twelve Nine Three Nine Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
12/25/99 9/25/99 12/25/99 9/23/00 9/30/00
-------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Sales.............................. $14,635 $10,626 $4,009 $12,202 $16,211
Cost of Sales...................... 13,631 9,901 3,730 11,415 15,145
------- ------- ------ ------- -------
1,004 725 279 787 1,066
Expenses:
Selling, general and
administrative.................. 446 318 128 446 574
------- ------- ------ ------- -------
Operating Income................... 558 407 151 341 492
Interest Expense................... 68 49 19 64 83
------- ------- ------ ------- -------
Income Before Taxes on Income and
Extraordinary Loss................ 490 358 132 277 409
Provision for Income Taxes......... 173 123 50 105 155
Extraordinary Loss................. 0 0 0 15 15
------- ------- ------ ------- -------
Net Income......................... $ 317 $ 235 $ 82 $ 157 $ 239
======= ======= ====== ======= =======
</TABLE>
11. Source and Amount of Funds. We will need approximately $1.8 billion to
purchase the number of Shares representing, together with Shares owned by
Tyson, 50.1% of the outstanding Shares pursuant to the Offer and to pay
related fees and expenses. In addition, we will need approximately $950
million to repay certain indebtedness of the Company. We will obtain such
funds from Tyson's general corporate funds and also from Tyson's commercial
paper program. Tyson has received proposals from various financial
institutions to provide a new 364-day revolving credit facility, which, when
combined with its existing revolving credit facility, would provide a back-
stop for the issuance of a total of up to $3.5 billion in commercial paper. In
the event Tyson were unable to issue commercial paper, the revolving credit
facilities would be available to fund the payment for the Shares. As of
December 30, 2000, the outstanding borrowings under the commercial paper
program were approximately $234 million and the weighted average interest rate
on such commercial paper was 7.79%, with maturities ranging from 3 to 30 days.
At such date, outstanding borrowings under the existing revolving credit
agreement (unrelated to the commercial paper program) were approximately $20
million. Following the issuance of the commercial paper, Tyson may seek to
refinance all or a portion of the commercial paper borrowings through the
issuance of public debt securities. However, the decision whether or not to
effect such refinancing and the timing of such refinancing will depend on a
number of factors, including, market conditions, interest rates and interest
rate spreads and the availability of alternative financing. If we are unable
to consummate the foregoing financing arrangements, we will seek alternative
financing.
12. Background of the Offer. As part of the continuous evaluation of its
businesses and plans, Tyson regularly considers a variety of strategic options
and transactions. In recent years, as part of this process, Tyson has
evaluated various alternatives for expanding its business, including through
acquisitions and including discussions with the Company from time to time.
On October 2, 2000, the Company and Donaldson, Lufkin & Jenrette, Inc.
("DLJ") jointly announced that Rawhide Holdings Corporation, a wholly-owned
subsidiary of DLJ Merchant Banking Partners III, L.P., a private equity fund
affiliated with DLJ, had entered into the Rawhide Agreement, to acquire the
outstanding Shares in a transaction whereby each Share would be converted into
the right to receive $22.25 in cash (the "Rawhide Agreement").
29
<PAGE>
On October 27, 2000, Brandes Investment Partners, L.P., Brandes Investment
Partners Inc., Brandes Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and
Jeffrey A. Busby, together the holders of 9.12% of the outstanding Shares,
disclosed in a public filing with the SEC their intention to vote against the
merger proposed by the Rawhide Agreement and to consider asserting their
appraisal rights under Delaware law.
On November 13, 2000, Smithfield Foods, Inc. ("Smithfield") announced in a
public filing with the SEC its offer to acquire the outstanding Shares for $25
a share payable in Smithfield common stock. Also, on November 13, 2000, the
Special Committee announced that it would begin discussions with Smithfield.
Thereafter, on November 16, 2000, the Company and Smithfield announced that
they entered into a confidentiality agreement.
On November 21, 2000, John Tyson, Chairman, President and Chief Executive
Officer of Tyson, contacted Richard Bond, President of the Company, and
inquired as to whether there might be any interest in discussing a combination
of the Company and Tyson. As a follow-up to this conversation, John Tyson and
other senior Tyson executives initiated a meeting with Robert Peterson,
Chairman and Chief Executive Officer of the Company, and Mr. Bond on November
24, 2000. During the subsequent week, Mr. Tyson initiated other conversations
with both Mr. Peterson and Mr. Bond.
On December 4, 2000, Tyson sent the following letter to the Special
Committee:
Special Committee of the Board of Directors of IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Attn: Ms. Jo Ann R. Smith, Chairperson
Tyson Foods, Inc. proposes the following transaction with IBP:
Tyson will acquire all outstanding common stock of IBP in a two-step
merger pursuant to a definitive agreement in which IBP stockholders receive
cash and Tyson Class A Common Stock valued at $26.00 for each share of IBP
common stock. To effect the transaction, Tyson will first commence a cash
tender offer for 50.1% of outstanding IBP common stock. After conclusion of
the tender offer, Tyson will effect a merger in which each remaining share
of IBP common stock will be converted into $26.00 of Tyson Class A Common
Stock, subject to a maximum exchange ratio of 2.063 Tyson shares and a
minimum exchange ratio of 1.688 Tyson shares per IBP share.
Our proposal provides a 42% premium over the closing price of IBP on September
29, 2000, the last trading day prior to announcement of the Rawhide
transaction.
Our transaction is clearly superior to the Smithfield and Rawhide offers for
the following reasons:
. We provide higher absolute value for each IBP share.
. IBP stockholders will receive one-half of total consideration promptly
in cash under the tender offer. Our proposal is not subject to any
financing condition. The Smithfield proposal contains no cash
consideration and will take significantly longer to complete. The
Rawhide proposal offers no equity participation and requires financing.
. Our equity component is compelling. The transaction is instantly
accretive to Tyson, before synergies, and offers even stronger cash-flow
characteristics. In addition, the combined company will be better
positioned in the highly competitive food industry.
. Our proposal avoids significant regulatory risk. As observed in your
letter to Smithfield, their proposal will cause strict regulatory
scrutiny and likely require significant asset divestiture. Numerous
regulators, politicians and farm advocacy groups have already expressed
opposition to the Smithfield
30
<PAGE>
combination. The resulting uncertainty and expected delay is detrimental
to both IBP and the ultimate value to be received by your stockholders.
. Finally, the resulting company will be the world's leading supplier of
chicken, beef and pork. We offer complementary products, operations and
philosophies, and look forward to working with Bob Peterson and Dick
Bond. We will combine these companies only in ways that create strength
and do not anticipate any significant reduction in employment levels.
Our transaction is intended to qualify as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code such that the stock portion of
consideration would be tax-free to IBP stockholders.
We expect IBP employee stock options will be converted into Tyson's stock
options on a basis consistent with the overall valuation received by IBP
stockholders in the second-step merger portion of the transaction.
This proposal is subject to completion of a quick, confirmatory due diligence
review and negotiation of a definitive merger agreement. Tyson is prepared to
enter into a confidentiality agreement on terms no less favorable than that
offered Smithfield. We attach a signed confidentiality agreement substantially
identical to Smithfield's agreement for your review and execution.
Time is of the essence. We ask to commence due diligence as soon as possible
and are prepared to begin tomorrow, December 5th. We are also prepared to
immediately negotiate a definitive merger agreement, which we anticipate will
contain customary terms and conditions for transactions of this kind.
Because this proposal is important to our respective stockholders we are
releasing this letter publicly.
I know we can, with your cooperation, close quickly and focus management on
creating value. I strongly believe this transaction will benefit all our
stockholders. Please call me or our advisors, Merrill Lynch, with any
questions.
Sincerely,
John Tyson
Chairman, President and Chief Executive Officer
Tyson Foods, Inc.
On December 4, the Special Committee sent John Tyson the following letter:
December 4, 2000
Mr. John Tyson
Chairman, President and Chief Executive Officer
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
Dear Mr. Tyson:
The Special Committee of the Board of Directors of IBP, inc., was pleased to
receive your letter dated December 4, 2000 in which you propose a merger in
which IBP stockholders would receive $26 per share, payable as to 50.1% of the
outstanding IBP shares in cash and payable as to 49.9% of the outstanding IBP
shares in Tyson Class A Common Stock, subject to the terms and conditions set
forth therein.
31
<PAGE>
The Committee has determined that your proposal meets the applicable
threshold under IBP's merger agreement with Rawhide Holdings Corporation and is
therefore prepared to enter into discussions with you regarding your proposal.
The Committee has reviewed your proposed form of confidentiality agreement
and has authorized me to execute it on behalf of the Company. An executed copy
is enclosed. You indicated in your letter that you are interested in performing
a quick, confirmatory due diligence review and we will try to accommodate you
on that score. In that regard, we will make documents available for legal due
diligence beginning tomorrow at our counsel's offices.
A key point of concern with respect to your proposal is the "collar" on the
exchange ratio. We note that this morning, subsequent to the announcement, your
stock traded below the lower end of your proposed collar. We are very
interested in discussing with you ways to protect the value for IBP
stockholders, such as a broader collar or a higher starting price.
We also look forward to sitting down with your representatives to discuss
the regulatory and political implication of your proposal, and we are very
interested in hearing your strategy for addressing any issues that may arise in
that regard.
I note, as I'm sure you are aware, that the Committee's objectives, as well
as its obligation, is to act to achieve the highest price reasonably available
to stockholders.
We look forward to working with you to assure the most favorable possible
transaction from the standpoint of IBP stockholders.
Very truly yours,
Jo Ann R. Smith
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 Tender Offer Statement on Schedule TO filed by Tyson and the
Purchaser (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.
On December 5 and 6, 2000, representatives of Tyson, and its legal and
financial advisors, visited the offices of counsel to the Special Committee to
conduct preliminary due diligence. On December 8, representatives of Tyson met
with the Company's management to conduct further due diligence and to discuss
issues in connection with a possible acquisition of the Company.
On December 11, 2000, John Tyson spoke with JoAnn R. Smith informing her
that Tyson would be initiating the Offer. On December 11, 2000 Tyson announced
its intention to commence the Offer. Tyson also delivered a form of merger
agreement to the Company, a copy of which was filed as an exhibit to the
Schedule TO.
On December 18, 2000, Tyson and the Company entered into a confidentiality
agreement substantially similar to the Confidentiality Agreement providing for
Tyson to provide due diligence information to IBP. During this period,
representatives of Tyson and the Company continued to conduct due diligence
with respect to the business and operations of the other.
32
<PAGE>
On December 21, 2000, Tyson received a letter from J.P. Morgan Securities
Inc. ("JP Morgan") on behalf of the Special Committee inviting Tyson to submit
a "best and final offer" between 4:00 p.m. and 5:00 p.m. on Friday, December
29, 2000.
On December 27, 2000, Mr. John Tyson and other representatives of Tyson
addressed the Special Committee and its advisors by telephone with respect to
the business and operations of Tyson.
On December 28, 2000, Tyson delivered the letter below to the Special
Committee outlining the terms of its revised proposal and issued a press
release disclosing those terms. Tyson also delivered to counsel to the Special
Committee an executed merger agreement incorporating the terms of the revised
proposal and addressing other comments made by counsel to the Special
Committee, a copy of which is filed as an exhibit to the Schedule TO.
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 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.
33
<PAGE>
. 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.
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
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During the course of Saturday, December 30, 2000, representatives of Tyson
and the Special Committee negotiated the terms of Tyson's proposal. On
December 30, 2000, Tyson increased the per share price offered in the Offer,
the Exchange Offer and the Merger to $28.50. On Sunday, December 31, 2000,
representatives of Tyson and the Company continued negotiations and the
Special Committee asked Tyson to increase its offer. On January 1, 2001, Tyson
increased the per share price offered in the Offer, the Exchange Offer and the
Merger to $30.00 per share and Tyson, the Purchaser and the Company executed
the Merger Agreement.
13. Purpose and Structure of the Offer; Plans for the Company; Dissenters'
Rights.
Purpose of the Offer. The purpose of the Offer is to acquire control of the
Company through the acquisition of a number of Shares which, together with
Shares owned by Tyson, represent 50.1% of the outstanding Shares. The Offer,
as the first step in the acquisition of the Company, is intended to facilitate
the acquisition of the Company. The purpose of the Exchange Offer is to give
the Company's stockholders the opportunity to receive their Tyson Class A
Common Stock more quickly than if they were to receive it in the Merger. The
purpose of the Merger is to acquire all outstanding Shares not tendered and
purchased pursuant to the Offer and the Exchange Offer. If the Offer is
successful, we intend to purchase the Shares tendered in the Exchange Offer as
soon as permitted by law (but no sooner than 5 business days after payment for
Shares in the Offer and delivery of unpurchased Shares to the exchange agent
for the Exchange Offer) and consummate the Merger as promptly as practicable
after completion of the Exchange Offer. Upon consummation of the Merger, the
Company will become a wholly owned subsidiary of Tyson.
If the Purchaser owns 90% or more of the outstanding Shares after
completing the Offer and the Exchange Offer, Tyson will cause the Company to
be merged into the Purchaser and the approval of the Company's stockholders
will not be required to complete the Merger. If the Purchaser does not own at
least 90% of the outstanding Shares after completing the Offer and the
Exchange Offer, the Company Board will be required to submit the Merger
Agreement to the Company's stockholders for approval at a stockholders'
meeting convened for that purpose in accordance with Delaware Law. The Merger
Agreement must be approved by a majority vote of the outstanding Shares.
If the Minimum Condition is satisfied, we will, upon consummation of the
Offer, have sufficient voting power to ensure approval of the Merger at the
stockholders' meeting without the affirmative vote of any other stockholder.
Plans for the Company. The acquisition of the Company will allow Tyson to
expand its business to include the processing and marketing of beef and pork
products. Tyson plans to use its expertise to accelerate the Company's program
to develop value-added convenience foods and case ready retail products in
beef and pork.
Except as otherwise provided herein, it is currently expected that,
following the Merger, the business and operations of the Company will be
continued substantially as they are currently being conducted. We will
continue to evaluate the business and operations of the Company during the
pendency of the Offer and after the consummation of the Offer, the Exchange
Offer and the Merger and will take such actions as we deem appropriate under
the circumstances. Except as described above or elsewhere in this Supplement
to the Offer, we have no present plans or proposals that would relate to or
result in an extraordinary corporate transaction involving the Company or any
of its subsidiaries (such as a merger, reorganization, liquidation, relocation
of any operations or sale or other transfer of a material amount of assets),
any change in the Company Board or management, any material change in the
Company's capitalization or dividend policy or any other material change in
the Company's corporate structure or business.
Appraisal Rights. Appraisal rights are not available in the Offer.
Appraisal rights will not be available to holders of the Shares in connection
with the Merger if both of the following are true:
. if at the date fixed to determine the stockholders entitled to notice of
and to vote on the Merger, the Common Stock is registered on a national
securities exchange or traded on Nasdaq, and
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. if the shares of Tyson Class A Common Stock at the Effective Time will
be either listed on a national securities exchange or traded on Nasdaq.
As of the date of this Supplement to the Offer, the Shares and the Tyson Class
A Common Stock are each listed on the NYSE.
14. The Merger Agreement and the Voting Agreement.
The following is a summary of the material provisions of the Merger
Agreement and the Voting Agreement, copies of which are filed as exhibits to
the amended Schedule TO (the "Form TO/A") filed by Tyson and Purchaser. This
summary is qualified in its entirety by reference to the complete text of the
Merger Agreement and the Voting Agreement.
The Merger Agreement
The Merger Agreement requires Tyson to amend the Offer (the "Amended Offer")
and file the Form TO/A which includes this Supplement to the Offer. Purchaser's
obligation to accept for payment and pay for Shares tendered pursuant to the
Amended Offer is subject to the satisfaction or waiver of the Minimum Condition
and certain other conditions that are described below. Subject to the
provisions of the Merger Agreement, Purchaser may waive, in whole or in part at
any time or from time to time prior to the Expiration Date, any condition to
the Amended Offer; provided that without the prior written consent of the
Company, we cannot make any change that changes the form of consideration to be
paid in the Amended Offer or the Merger, decreases the price per Share,
increases the Minimum Condition or the Maximum Amount (as defined in the Merger
Agreement), imposes additional conditions to the Amended Offer or amends any
term or any condition to the Amended Offer in a manner materially adverse to
the holders of the Shares. See "The Offer--Certain Conditions to the Offer".
Under the Merger Agreement, Purchaser will have the right, without the
consent of the Company, to extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC or the staff of the SEC
applicable to the Amended Offer or any period required by applicable law.
Unless the Merger Agreement has been terminated, Purchaser shall extend the
Amended Offer from time to time in the event that, at a then-scheduled
expiration date, all of the conditions to the Amended Offer have not been
satisfied or waived as permitted pursuant to the Merger Agreement, each such
extension not to exceed (unless otherwise consented to in writing by the
Company) the lesser of 10 additional business days or such fewer number of days
that Purchaser reasonably believes are necessary to cause the conditions to the
Amended Offer to be satisfied. Except as provided in the Merger Agreement,
Purchaser shall not terminate the Amended Offer without purchasing Shares
pursuant to the Amended Offer.
As promptly as practicable after the date of the Merger Agreement, Tyson
shall cause Purchaser to, and Purchaser shall, commence an Exchange Offer
pursuant to which Purchaser shall offer to issue, in exchange for each then
issued and outstanding Share, other than Shares then owned by Tyson or
Purchaser, a number of duly authorized, validly issued, fully paid and non-
assessable shares of Tyson Class A Common Stock 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 on the
NYSE at the end of the regular session as reported on the Consolidated Tape,
Network A for the fifteen consecutive trading days ending on the second trading
day immediately preceding the expiration date of the Exchange Offer. 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 only to Purchaser having accepted for payment,
and paid for, Shares tendered pursuant to the Offer and certain other
conditions.
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Recommendation
At a meeting of directors of the Company, upon the unanimous recommendation
of the Special Committee, the Company Board unanimously (i) determined that
each of the Merger Agreement, the Amended Offer, the Exchange Offer and the
Merger is fair to, and in the best interest of, the holders of Shares, (ii)
approved the Merger Agreement and the transactions contemplated thereby,
including each of the Amended Offer, the Exchange Offer and the Merger and
(iii) resolved to recommend that the stockholders of the Company accept the
Amended Offer and the Exchange Offer, tender their Shares in the Offer and the
Exchange Offer and that, following consummation of the Amended Offer and the
Exchange Offer, the stockholders of the Company adopt the Merger Agreement and
vote in favor of the Merger.
The Merger
As soon as practicable after the purchase of the Shares pursuant to the
Amended Offer, the Exchange Offer, the approval of the Merger Agreement by the
Company's stockholders, if required, and the satisfaction or waiver of the
other conditions to the Merger, the Company will be merged with and into
Purchaser, and Purchaser will be the surviving corporation (the "Surviving
Corporation").
Each Share outstanding at the Effective Time (other than Shares owned by
Tyson or any of its subsidiaries, including Purchaser, or by the Company as
treasury stock, all of which will be cancelled), will be converted into the
right to receive that number of shares of Tyson Class A Common Stock 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, and (c) if
the market price per share of Tyson Class A Common Stock is equal to or less
than $12.60, equal to 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 on the NYSE at the end of the regular session as reported on the
Consolidated Tape, Network A for the fifteen consecutive trading days ending on
the fifth trading day immediately preceding the Effective Time.
In the event that at February 28, 2001, the Minimum Condition has not been
satisfied, Purchaser will terminate the Amended Offer and the Exchange 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"). In the Cash Election Merger, each holder of Shares will have the
right to elect to receive either $30.00 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 on the NYSE at the end of the regular
session as reported on the Consolidated Tape, Network A 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 Delaware Law,
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 Delaware
Law, 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.
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Employee Stock Options
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 shall 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, the Company will
use its best reasonable 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.
In the Merger Agreement, Tyson will agree to take, at or prior to the
Effective Time, 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 shall 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 shall administer the Company stock option plans in a manner
consistent with the exemptions provided by Rule 16(b)(3) promulgated under the
Exchange Act.
Representations and Warranties
Pursuant to the Merger Agreement, the Company has made customary
representations and warranties to Tyson, including representations relating to
its organization and governmental qualification and subsidiaries; its articles
of incorporation and bylaws; capitalization; corporate authorizations; absence
of conflicts; required filings and consents; compliance with laws; SEC filings;
financial statements; absence of certain changes or events (including any
material adverse effect on the financial condition, business, assets or results
of operations of the Company); absence of undisclosed liabilities; litigation;
employee benefit plans; tax matters; labor matters; intellectual property;
environmental matters; insurance and other matters.
Certain of the Company's representations and warranties are qualified as to
"materiality" or "Material Adverse Effect." When used in connection with the
Company or any of its subsidiaries, the term "Material Adverse Effect" means
any effect that would be materially adverse to the financial condition,
business, assets, liabilities or results of operations of the Company and its
subsidiaries taken as a whole.
In the Merger Agreement, Tyson has made customary representations and
warranties to the Company, including representations relating to its corporate
organization and subsidiaries; authority relative to the Merger Agreement;
absence of conflicts; capitalization; SEC filings; financial statements;
compliance with laws; absence
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of certain changes or events (including any material adverse effect on the
financial condition, business, assets or results of operations of the Company);
absence of material liabilities; adequate funding; ownership of Company stock;
finders fees and other matters.
Certain of Tyson's representations and warranties are qualified as to
"materiality" or "Parent Material Adverse Effect." When used in connection with
the Company or any of its subsidiaries, the term "Parent Material Adverse
Effect" means any effect that would be materially adverse to the financial
condition, business, assets, liabilities or results of operations of Tyson and
its subsidiaries taken as a whole.
Covenants of the Company
Pursuant to the Merger Agreement, the Company has agreed to comply with
various covenants.
Conduct of the Company. Prior to the date that Tyson's designees constitute
a majority of the Company's Board of Directors, except as expressly permitted
by the Merger Agreement, the Company and its subsidiaries will conduct business
in the ordinary course consistent with past practices, and the Company will not
and will not permit its subsidiaries to, among other things:
(a) amend its organizational documents;
(b) make any acquisitions for an amount in excess of $5 million in the
aggregate, or sell, lease or otherwise dispose of a subsidiary, assets or
securities for an amount in excess of $20 million in the aggregate;
(c) make any investment in an amount in excess of $20 million in the
aggregate or purchase any property or assets of any other individual or
entity for an amount in excess of $20 million in the aggregate;
(d) waive, release, grant, or transfer any rights of material value
other than in the ordinary course of business consistent with past
practice;
(e) modify any existing material license, lease, contract, or other
document other than in the ordinary course of business consistent with past
practice;
(f) incur, assume or prepay an amount of long-term or short-term debt in
excess of $150 million in the aggregate;
(g) assume, guarantee, endorse or otherwise become liable or responsible
for the obligations of any other person which, are in excess of $5 million
in the aggregate;
(h) make any loans, advances or capital contributions to, or investments
in, any other person which are in excess of $20 million in the aggregate;
(i) make any new capital expenditures which, individually or in the
aggregate, would exceed $200 million in the first six months of the 2001
calendar year;
(j) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution in respect of
its capital stock except regular quarterly dividends, or, redeem,
repurchase or otherwise acquire or offer to redeem, repurchase, or
otherwise acquire any of its securities or any securities of its
subsidiaries;
(k) adopt or amend any material bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, or increase in any
manner the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any existing plan or
arrangement;
(l) pay, discharge or satisfy any material claims, liabilities or
obligations;
(m) approve any new labor agreements;
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(n) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures; or
(o) knowingly take or agree or commit to take any action that would make
any representation and warranty of the Company under the Merger Agreement
inaccurate in any material respect at, or as of any time prior to, the
Effective Time.
Company Stockholder Meeting. The Company will cause a meeting of its
stockholders to be duly called and held as soon as reasonably practicable
after consummation of the Amended Offer and Exchange Offer for the purpose of
voting on the approval and adoption of the Merger Agreement and the Merger, if
such meeting is required. The Company Board will recommend approval and
adoption of the Agreement and the Merger by the Company's stockholders and the
Company Board shall not withdraw such recommendation.
Access to Information. From the date of the Merger Agreement until the
Effective Time, the Company will (a) give Tyson and its counsel, financial
advisors, auditors and other authorized representatives (collectively, the
"Representatives") reasonable access during normal business hours to the
offices, properties, books and records of the Company and its subsidiaries,
(b) provide the Representatives reasonable access to and the right to consult
with representatives of the Company handling any labor negotiations with any
union representing employees of the Company, (c) furnish to Tyson and the
Representatives such financial and operating data and other information as
such persons may reasonably request in order to complete the transactions
contemplated hereby and (d) instruct the Company's employees, counsel and
financial advisors to cooperate with Tyson in its investigation of the
business of the Company and its subsidiaries; provided that (i) any
information provided to Tyson or the Representatives will be subject to the
confidentiality agreements dated December 4, 2000 and December 18, 2000
between it and Tyson and (ii) Tyson shall inform the Representatives receiving
such information of the terms of such confidentiality agreements and shall be
responsible for any breach by such Representatives of such confidentiality
agreements.
Other Offers. Neither the Company nor any of its subsidiaries will, or will
authorize or permit any of their officers, directors, employees, investment
bankers, attorneys, accountants, consultants or other agents or advisors to,
directly or indirectly, (x) solicit, initiate or take any action to facilitate
or encourage the submission of inquiries, proposals or offers from any person
or group (other than Tyson and Purchaser) relating to any Acquisition Proposal
(defined below), or agree to or endorse any Acquisition Proposal, (y) enter
into or participate in any discussions or negotiations regarding any
Acquisition Proposal, or furnish to any person or group any information with
respect to its business, properties or assets in connection with any
Acquisition Proposal or (z) grant any waiver or release under any standstill
or similar agreement with respect to any class of equity securities of the
Company or any of its subsidiaries. "Acquisition Proposal" means any offer or
proposal for a merger, reorganization, consolidation, share exchange, business
combination or other similar transaction involving the Company or any of its
subsidiaries or any proposal or offer to acquire, directly or indirectly,
securities representing more than 50% of the voting power of the Company, or a
substantial portion of the assets of the Company and its subsidiaries taken as
a whole, other than the Amended Offer and the Merger contemplated by the
Merger Agreement.
Notwithstanding the foregoing, the Company Board may, prior to the
acceptance for payment of Shares pursuant to the Amended Offer, (i) furnish
information pursuant to a confidentiality letter deemed appropriate by the
Special Committee concerning the Company and its businesses, properties or
assets to a person or group who in the judgment of the Special Committee has
made a bona fide Acquisition Proposal, (ii) engage in discussions or
negotiations with such a person or group who in the judgment of the Special
Committee has made a bona fide Acquisition Proposal, (iii) following receipt
of a bona fide Acquisition Proposal, take and disclose to its stockholders a
position contemplated by Rule 14e-2(a) under the Exchange Act or otherwise
make disclosure to its stockholders, (iv) following receipt of an Acquisition
Proposal, fail to make or withdraw or modify its recommendation that all
stockholders of the Company who wish to receive cash for their Shares tender
their Shares in the Amended Offer and approve the Merger and/or (v) taking any
non-appealable, final action ordered to be taken by the Company by any court
of competent jurisdiction but, in each case referred to in the foregoing
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(i), (ii) and (iv), only if (i) the Company has complied with the terms of this
"No Solicitation Covenant", (ii) the Company has received an unsolicited
Acquisition Proposal which the Special Committee determines in good faith is
reasonably likely to result in a Superior Proposal, and (iii) the Company shall
have delivered to Tyson a prior written notice advising Tyson that it intends
to take such action. "Superior Proposal" means any bona fide written
Acquisition Proposal which (i) the Special Committee determines in good faith
(after consultation with a financial advisor of nationally recognized
reputation and taking into account all the terms and conditions of the
Acquisition Proposal) is (a) more favorable to the Company and its stockholders
from a financial point of view than the transaction contemplated under the
Merger Agreement, and (b) reasonably capable of being completed, including a
conclusion that its financing, to the extent required, is then committed or is
in the good-faith judgment of the Company Board, reasonably capable of being
financed by the person making such Acquisition Proposal.
Notices of Certain Events. The Company will promptly notify Tyson of (a) any
notice or other communication from any person alleging that the consent of such
person is or may be required in connection with the transactions contemplated
by the Merger Agreement, (b) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by the Merger Agreement; (c) any actions, suits,
claims, investigations or proceedings commenced or, to the best of its
knowledge threatened against, relating to or involving or otherwise affecting
the Company or any subsidiary of the Company which, if pending on the date of
the Merger Agreement, would have been required to be disclosed or which relate
to the consummation of the transactions contemplated by the Merger Agreement.
Tax Matters. The Merger Agreement requires that, except as permitted in the
Merger Agreement, as required by law or as would not have a material adverse
effect and without the prior written consent of Tyson, such consent not to be
unreasonably withheld, neither the Company nor any of its subsidiaries will
make or change any material tax election, change any annual tax accounting
period, adopt or change any method of tax accounting, file any amended tax
returns or claims for tax refunds, enter into any closing agreement, surrender
any tax claim, audit or assessment, surrender any right to claim a tax refund,
offset or other reduction in tax liability surrendered, consent to any
extension or waiver of the limitations period applicable to any tax claim or
assessment or take or omit to take any other action, if any such election,
action or omission would have the effect of increasing the tax liability or
reducing any tax asset of the Company or any of its subsidiaries.
The Company and each of its subsidiaries will establish or cause to be
established in accordance with GAAP on or before the Effective Time an adequate
accrual for all taxes due with respect to any tax period prior to the Effective
Time or for any period beginning before, and ending after, the Effective Time.
The Company shall use its reasonable best efforts to cause Wachtell, Lipton,
Rosen & Katz to provide an opinion, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated the Effective
Time, to the effect that the Offer, the Exchange Offer and the Merger, taken
together, will be treated for federal income tax purposes as a Reorganization
under Section 368(a) of the Code and that each of Tyson, Purchaser and the
Company will be a party to the reorganization within the meaning of Section
368(b) of the Code. The Company shall use its reasonable best efforts to
provide to Wachtell, Lipton, Rosen & Katz and Milbank, Tweed, Hadley & McCloy
LLP a certificate containing representations reasonably requested by such
counsel in connection with the opinions to be delivered pursuant to the Merger
Agreement.
Affiliates. The Merger Agreement requires that, at least 30 days prior to
the effective time of the Merger, the Company shall use its reasonable best
efforts to (a) deliver to Tyson a letter identifying all known persons who may
be deemed affiliates of the Company for the purposes of Rule 145 of the
Securities Act of 1933, as amended (the "Securities Act") and (b) obtain a
written agreement in an agreed upon form from each person who may be so deemed,
as soon as practicable and, in any event, prior to the effective time of the
Merger.
Confidentiality. The Company has agreed that the confidentiality agreements
dated December 4, 2000 and December 18, 2000 between it and Tyson shall
continue in full force and effect prior to the Effective Time and after any
termination of the Merger Agreement.
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Covenants of Tyson
Pursuant to the Merger Agreement, Tyson has agreed to comply with various
covenants.
Tyson Stockholder Meeting. Tyson will cause a meeting of its stockholders to
be duly called and held as soon as reasonably practicable for the purpose of
voting on the issuance of Tyson Class A Common Stock in the Exchange Offer, the
Merger and pursuant to Tyson Options after the Merger. The board of directors
of Tyson shall recommend approval of the issuance of Tyson Class A Common Stock
in the Exchange Offer and the Merger pursuant to the Merger Agreement and shall
not withdraw such recommendation.
Confidentiality. Tyson has agreed that the confidentiality agreements dated
December 4, 2000 and December 18, 2000 between it and the Company shall
continue in full force and effect prior to the Effective Time and after any
termination of the Merger Agreement.
Voting of Shares. Each of Tyson and Purchaser has agreed to vote all Shares
beneficially owned by it or any of its subsidiaries in favor of adoption of the
Merger Agreement at the Company stockholder meeting, and at any adjournment.
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 shall cause the Surviving
Corporation to provide only such coverage as shall then be available at an
annual premium equal to 200% of such rate.
Employee Matters. 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 provision will not apply to any employees represented for purposes of
collective bargaining.
Obligations of Purchaser. Tyson will take all action necessary to cause
Purchaser to perform its obligations under the Merger Agreement and to
consummate the Merger on the terms and conditions set forth in the Merger
Agreement.
Stock Exchange Listing. Tyson has agreed to use its reasonable best efforts
to cause the shares of Tyson Class A Common Stock to be issued in connection
with the Exchange Offer and the Merger to be listed on the NYSE, subject to
official notice of issuance.
Acquisitions of Shares. Tyson and Purchaser have agreed not to acquire any
Shares prior to the Effective Time or the termination of the Merger Agreement,
other than Shares purchased pursuant to the Amended Offer or the Exchange
Offer.
Notices of Certain Events. Tyson will promptly notify the Company of (a) any
notice or other communication from any person alleging that the consent of such
person is or may be required in connection with the transactions contemplated
by the Merger Agreement, (b) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by the Merger Agreement, and (c) any actions, suits,
claims, investigations or proceedings commenced or, to the best of its
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knowledge threatened against, relating to or involving or otherwise affecting
Tyson or any of its subsidiaries which relate to the consummation of the
transactions contemplated by the Merger Agreement.
Reorganization Matters. Neither Tyson nor any of its subsidiaries will take
any action that would reasonably be likely to prevent the Offer, the Exchange
Offer and the Merger, taken together, from qualifying as a reorganization under
Section 368(a) of the Internal Revenue Code and, prior to the Effective Time,
Tyson and its subsidiaries will use their reasonable best efforts to cause the
Merger to so qualify. Tyson will use its reasonable best efforts to cause
Milbank, Tweed, Hadley & McCloy LLP to provide an opinion, on the basis of
certain facts, representations and assumptions set forth in such opinion, dated
the effective time of the Merger, to the effect that the Offer, the Exchange
Offer and the Merger, taken together, will be treated for federal income tax
purposes as a Reorganization under Section 368(a) of the Code and that each of
Tyson, Purchaser and the Company will be a party to the reorganization within
the meaning of section 368(b) of the Code. Tyson will use its reasonable best
efforts to provide to Wachtell, Lipton, Rosen & Katz and Milbank, Tweed, Hadley
& McCloy LLP a certificate containing representations reasonably requested by
such counsel in connection with the opinions to be delivered pursuant to the
Merger Agreement.
Information Relating to Offer. Tyson will agree to cause any depository or
agent effecting the Amended Offer, to provide to the Company promptly as
requested from time to time by the Company current information regarding the
status of the Offer and the Exchange Offer and the number of Shares tendered
and not validly withdrawn.
Conduct of Tyson. From the date of the Merger Agreement until the Effective
Time, Tyson will conduct its business in the ordinary course consistent with
past practice and shall use its reasonable best efforts to preserve intact its
business organizations and relationships with third parties and to keep
available the services of its present officers and employees.
Mutual Covenants of Tyson and the Company
Pursuant to the Merger Agreement, Tyson and the Company have agreed to
comply with various mutual covenants.
Company Proxy Statement and Merger Form S-4. If Purchaser does not own at
least 90% of the issued and outstanding Shares following consummation of the
Offer and the Exchange Offer, the Merger Agreement provides that the Company
will promptly prepare its proxy statement (the "Company Proxy Statement") for
soliciting proxies to vote at the special meeting of stockholders called to
vote on the Merger Agreement and the Merger. Tyson will promptly prepare and
file with the SEC the Registration Statement on Form S-4 containing information
required by Regulation S-K under the Exchange Act (the "Merger Form S-4"), in
which the Company Proxy Statement will be included. The Company, Tyson and
Purchaser will cooperate with each other in the preparation of the Merger Form
S-4 and any amendment or supplement thereto, and each will notify the other of
the receipt of any comments of the SEC with respect to the Merger Form S-4 and
of any requests by the SEC for any amendment or supplement thereto or for
additional information, and will provide to the other promptly copies of all
correspondence between Tyson or the Company, as the case may be, or any of its
Representatives and the SEC with respect to the Merger Form S-4. Tyson will
give the Company and its counsel the opportunity to review the Merger Form S-4
and all responses to requests for additional information by and replies to
comments of the SEC before their being filed with, or sent to, the SEC. Each of
the Company, Tyson and Purchaser will use its best efforts, after consultation
with the other parties, to respond promptly to all such comments of and
requests by the SEC and use its reasonable best efforts to cause the Merger
Form S-4 to be declared effective by the SEC as promptly as practicable. Tyson
will promptly take any action (other than qualifying as a foreign corporation
or taking any action which would subject it to service of process in any
jurisdiction where Tyson is not now so qualified or subject) required to be
taken under foreign or state securities or Blue Sky laws in connection with the
issuance of Tyson Class A Common Stock in the Merger. As promptly as
practicable after the Merger Form S-4 shall have become effective, Tyson and
the Company shall fully cooperate with each other to cause the Proxy
Statement/Prospectus contained in the Merger Form S-4 to be
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mailed to stockholders of the Company and Tyson. Tyson will advise the Company,
promptly after it receives notice thereof, of (i) the time when the Merger Form
S-4 becomes effective, (ii) the issuance of any stop order with respect to the
Merger Form S-4, (iii) the suspension of the qualification of Tyson Class A
Common Stock for offering or sale in any jurisdiction, or (iv) any request by
the SEC for an amendment of the Merger Form S-4 or comments thereon and
responses thereto or requests by the SEC for additional information.
Certain Regulatory Issues. Each party will use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by the Merger Agreement. Each party
will refrain from taking, directly or indirectly, any action contrary to or
inconsistent with the provisions of the Merger Agreement, including action
which would interfere with the Amended Offer or impair such party's ability to
consummate the Merger. The Merger Agreement provides that the Company and its
board of directors will use their reasonable best efforts to (a) take all
action necessary so that no state takeover statute or similar statute or
regulation is or becomes applicable to the Amended Offer, the Exchange Offer,
the Merger or any of the other transactions contemplated by the Merger
Agreement and (b) if any state takeover statute or similar statute or
regulation becomes applicable to any of the foregoing, take all action
necessary so that the Amended Offer, the Exchange Offer, the Merger and the
other transactions contemplated by the Merger Agreement may be consummated as
promptly as practicable on the terms contemplated by the Merger Agreement and
otherwise to minimize the effect of such statute or regulation on the Amended
Offer, the Exchange Offer and the Merger. The Merger Agreement provides that
Tyson shall take actions as may be 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 Amended Offer, the Exchange Offer or
the Merger so as to enable the Amended Offer, the Exchange Offer and the Merger
to occur as soon as reasonably practicable. Without limiting the generality of
the foregoing, Tyson shall agree to divest, hold separate, or agree to any
conduct restrictions with respect to any Tyson or Company assets or may be
required by any governmental entity in order to forego that governmental entity
bringing any action to enjoin the Offer, the Exchange Offer or the Merger.
Certain Filings. The Company and Tyson will use their respective reasonable
best efforts to take or cause to be taken, (i) all actions necessary, proper or
advisable by such party with respect to the prompt preparation and filing with
the SEC of their SEC disclosure documents, and (ii) such actions as may be
required to have the Company Proxy Statement cleared and the Merger Form S-4
declared effective by the SEC, in each case as promptly as practicable. The
Company and Tyson shall cooperate with one another (i) in determining whether
any action by or in respect of, or filing with, any governmental body, agency
or official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with or as a result of the consummation of the transactions
contemplated by the Merger Agreement and (ii) in seeking any such actions,
consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the parties' SEC
disclosure documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
Public Announcements. Each of Tyson and the Company will consult with each
other before issuing any press release or making any public statement with
respect to the Merger Agreement and to not issue any such press release or make
any such public statement prior to such consultation.
Conditions to the Merger
The obligations of the Company, Tyson and Purchaser to consummate the Merger
are subject to the satisfaction or, to the extent permitted by law, waiver of
the following conditions:
(a) the Merger Agreement has been approved and adopted by the
stockholders of the Company in accordance with Delaware Law;
(b) any applicable waiting period under the HSR Act (as defined below)
relating to the Amended Offer and the Merger has expired or been
terminated;
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(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree prohibits the consummation of the Merger;
(d) the Merger Form S-4 will have been declared effective, no stop order
suspending the effectiveness of the Merger Form S-4 will be in effect and
no proceedings for such purpose will be pending before the SEC; and
(e) the shares of Tyson Class A Common Stock to be issued in the Merger
have been approved for listing on the NYSE, subject to official notice of
issuance.
The obligation of the Company to consummate the Merger is also subject to
the condition that the Purchaser will have purchased Shares representing,
together with Shares previously owned by Parent, no less than 50.1% of the
issued and outstanding Shares.
Termination
The Merger Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time (notwithstanding any approval of the
Merger Agreement by the stockholders of the Company):
(a) by mutual written agreement of the Company and Tyson;
(b) (i) by the Company, if the Offer has not been consummated by
February 28, 2001, provided that the Company is not then in breach in any
material respect of any of its obligations under the Merger Agreement; or
(ii) by either the Company or Tyson (but in case of Tyson, only if no
Shares were purchased by Purchaser pursuant to the Offer or the Exchange
Offer) if the Merger has not been consummated by May 31, 2001, provided
that the party seeking to exercise such right is not then in breach in any
material respect of any of its obligations under the Agreement;
(c) by either the Company or Tyson if there is any law or regulation
that makes acceptance for payment of, and payment for, the Shares pursuant
to the Offer, or consummation of the Merger illegal or otherwise prohibited
or any judgment, injunction, order or decree of any court or governmental
body having competent jurisdiction permanently enjoins Purchaser from
accepting for payment of, and paying for, the Shares pursuant to the
Amended Offer or Purchaser, the Company or Tyson from consummating the
Merger and such judgment, injunction, order or decree has become final and
nonappealable; or
(d) by Tyson, prior to the purchase of the Shares pursuant to the Offer,
(i) if the board of directors of the Company shall have withdrawn, or
modified or amended in a manner adverse to Tyson, its approval or
recommendation of the Merger Agreement, the Offer, the Exchange Offer or
the Merger or its recommendation that stockholders of the Company tender
their Shares pursuant to the Offer and the Exchange Offer, adopt and
approve the Merger Agreement and the Merger or approved, recommended or
endorsed any proposal for a transaction other than the transactions
hereunder (including a tender or exchange offer for Shares) or (ii) if the
Company has failed to call the Company stockholder meeting or failed to
mail the Company Proxy Statement to its stockholders within 20 days after
the Merger Form S-4 is declared effective by the SEC or failed to include
in such statement the recommendation referred to above; or
(e) by the Company, if (i) the Company Board authorizes the Company,
subject to complying with the terms of the Merger Agreement, to enter into
a binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Tyson in writing at least three
business days prior to the proposed effectiveness of such termination that
it intends to enter into such an agreement, attaching a description of the
material terms and conditions thereof and permits Tyson, within such three
business day period to submit a new offer, which shall be considered by the
Special Committee in good faith (it being understood that the Company shall
not enter into any such binding agreement during such three-day period) and
(ii) the Company prior to such termination pays to Tyson in immediately
available funds the Termination Fee (defined below) and the fees required
to be paid pursuant to the Merger Agreement; or
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(f) by Tyson, if prior to the acceptance for payment of the Shares under
the Amended Offer, there has been a breach by the Company of any
representation, warranty, covenant or agreement contained in the Merger
Agreement that is not curable and such breach would give rise to a failure
of the condition to the Merger Agreement; or
(g) by the Company, if prior to the acceptance for payment of the Shares
under the Offer there has been a breach by Tyson of any representation,
warranty, covenant or agreement contained in the Merger Agreement that is
not curable and such breach would give rise to a failure of the condition
to the Merger Agreement (which shall be construed to apply to Tyson); or
(h) by either the Company or Tyson if, at a duly held stockholders
meeting of the Company or any adjournment thereof at which this Agreement
and the Merger are voted upon, the requisite stockholder adoption and
approval shall not have been obtained; provided, however, that Tyson shall
not have the right to terminate this Agreement or abandon the transactions
contemplated hereby if Shares were purchased in the Offer.
Fees and Expenses
Except as otherwise specified below, all fees and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby
will be paid by the party incurring such expenses.
The Merger Agreement provides that if it is terminated under circumstances
which would constitute a Payment Event (as defined below), the Company would
pay to Tyson (i) if pursuant to clause (x) in the definition of "Payment Event"
below, simultaneously with the occurrence of such Payment Event or, if pursuant
to clause (y) in the definition of "Payment Event" below, within two business
days following such Payment Event, a fee of $15,000,000 (the "Termination Fee")
and (ii) a reimbursement payment of $66,500,000, in cash, together with
interest thereon, at a rate equal to the London Interbank Offered Rate plus
.75%, from January 2, 2001 to the date such payment is due pursuant to the
Merger Agreement (collectively, the "Reimbursement Payment"), reflecting
reimbursement of the amounts advanced by Tyson to the Company on January 2,
2001 and used by the Company to pay the termination fee and the out-of-pocket
fees and expenses owed to Rawhide Holdings Corporation under the Rawhide
Agreement. The advance is evidenced by a note that, in the event of termination
of the Merger Agreement, will be repaid only on the terms set forth in the
Merger Agreement with respect to the Reimbursement Payment, and that will
survive the consummation of the Merger if the Merger is completed. "Payment
Event" means (x) the termination of the Merger Agreement by the Company or
Tyson pursuant to subsections (d) or (e) under the section "Termination" or (y)
the termination of the Merger Agreement pursuant to subsections (b), (f) or (h)
under the section "Termination", if at the time of such termination (or, in the
case of a termination pursuant to subsection (h) under the section
"Termination", at the time of the stockholders meeting), there shall have been
outstanding an Acquisition Proposal pursuant to which stockholders of the
Company would receive cash, securities or other consideration having an
aggregate value in excess of $30.00, and within six months of any such
termination described in clause (y) above the Company enters into a definitive
agreement for or consummates such Acquisition Proposal or another Acquisition
Proposal with a higher value than such Acquisition Proposal.
Upon the termination of the Merger Agreement under circumstances which would
constitute a Payment Event, the Company shall reimburse Tyson and its
affiliates not later than two business days after demand delivered by Tyson to
the Company, the amount of $7,500,000 representing Tyson's fees and expenses
(including, without limitation, the fees and expenses of their counsel and
investment banking fees) and Tyson shall not be required to submit
documentation substantiating such fees and expenses.
The Merger Agreement provides that Tyson will pay to the Company a fee of
$70 million if the Merger Agreement is terminated (i) by Tyson or the Company
pursuant to subsection (c) of the section "Termination" or (ii) by the Company
pursuant to subsection (b) of the section "Termination" if the inability to
close is attributable to there being any law or order enacted or entered that
imposes material limitations on Tyson's ability to operate its business, own
its assets, accept Shares for payment in the Offer or acquire the Company,
provided,
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however, that, in each case, such termination results from any action, suit,
proceeding, judgment, writ, injunction, order or decree with respect to any
antitrust, competition or trade regulation laws that may be asserted by any
governmental entity with respect to the Offer, the Exchange Offer or the
Merger.
Amendments
At any time prior to the Effective Time, the Merger Agreement may be amended
by an instrument signed by Tyson, Purchaser and the Company. However, after
adoption of the Merger Agreement by the stockholders of the Company, the Merger
Agreement may not be amended by any amendment which by law requires the further
approval of the stockholders of the Company unless the stockholders of the
Company have given their approval.
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.
15. Effect of the Offer on the Market for the Shares; Stock Exchange
Listing(s); Registration under the Exchange Act. If the Merger is consummated,
stockholders who have not tendered their Shares in the Offer or the Exchange
Offer will receive shares of Tyson Class A Common Stock with a market value
equal to $30.00 if, during the relevant pricing period before the Merger, the
average per share price of Tyson Class A Common Stock is at least $12.60 and no
more than $15.40. This $30.00 value is subject to change if the average per
share price of Tyson Class A Common Stock is not in that range and the value
you will receive will be proportionately changed. If, however, the Merger is
not consummated, the purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by stockholders other than Tyson. We cannot
predict whether the reduction in the number of Shares that might otherwise
trade publicly would have an adverse or beneficial effect on the market price
for, or marketability of, the Shares or whether such reduction would cause
future market prices to be greater or less than the Offer price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements for continued listing in the NYSE.
According to the published guidelines of the NYSE, the NYSE would normally give
consideration to delisting the Shares when, among other things:
. the total number of holders of Shares is less than 400,
. the total number of holders of Shares is less than 1,200 and the average
monthly trading volume over the most recent 12-month period is less than
100,000 Shares,
. the number of publicly held Shares (excluding the holdings of officers,
directors and their families and other concentrated holdings of 10% or
more) is less than 600,000,
. the Company's total global market capitalization is less than $50.0
million and the total shareholders' equity is less than $50.0 million,
. the Company's average global market capitalization over a consecutive
30-trading-day period is less than $15.0 million, or
. the average closing price per Share is less than $1.00 over a
consecutive 30-trading-day period.
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If, as a result of the purchase of Shares pursuant to the Offer, the Shares
no longer meet the requirements for continued listing in NYSE and the listing
of Shares is discontinued, the market for the Shares could be adversely
affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
trade on another securities exchange or in the over-the-counter market and
that price quotations for the Shares would be reported by such exchange or
through other sources. The extent of the public market for the Shares and
availability of such quotations would, however, depend upon such factors as
the number of holders and/or the aggregate market value of the publicly held
Shares at such time, the possible termination of registration of the Shares
under the Exchange Act and other factors. The Shares are currently "margin
securities" under the regulations of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), which has the effect, among
other things, of allowing brokers to extend credit on the collateral of such
Shares. Depending upon factors similar to those described above regarding
listing and market quotations, the Shares might no longer constitute "margin
securities" for the purposes of the Federal Reserve Board's margin regulations
and, therefore, could no longer be used as collateral for loans made by
brokers.
Registration may be terminated upon application of the Company to the SEC
if the Shares are neither listed on a national securities exchange nor held by
300 or more holders of record. Termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to
be furnished by the Company to holders of Shares and to the SEC and would make
certain of the provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement pursuant to Section 14(a) in connection with a stockholder's meeting
and the related requirement of an annual report to stockholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. Furthermore,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of such securities pursuant
to Rule 144 promulgated under the Securities Act. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for listing or Nasdaq National Market
reporting.
16. Dividends and Distributions. If on or after December 11, 2000, the
Company should split, combine or otherwise change the Shares or its
capitalization, acquire or otherwise cause a reduction in the number of
outstanding Shares or issue or sell any additional Shares (other than Shares
issued pursuant to and in accordance with the terms in effect on December 11,
2000 of employee stock options outstanding prior to such date), shares of any
other class or series of capital stock, other voting securities or any
securities convertible into, or options, rights, or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to our
rights under "The Offer--Conditions to the Offer," we may, in our sole
discretion, make such adjustments in the purchase price and other terms of the
Offer as we deem appropriate including the number or type of securities to be
purchased.
17. Conditions to the Offer. Notwithstanding any other provision of the
Offer, we are not required to accept for payment or pay for any Shares, and we
may terminate the Offer, if:
(1) prior to the Expiration Date, the Minimum Condition has not been
satisfied or any waiting periods under the applicable anti-trust laws shall
not have expired or been terminated; or
(2) at any time on or after January 1, 2001 and prior to the payment for
Shares in the Offer, any of the following conditions exists:
(a) there shall have been any law or order promulgated, entered,
enforced, enacted, issued or deemed applicable to the Offer or the
Merger by any court of competent jurisdiction or other competent
governmental or regulatory authority which, directly or indirectly, (1)
prohibits, or imposes any material limitations on, Tyson's or
Purchaser's ownership or operation (or that of any of their respective
subsidiaries or affiliates) of any portion of their or the Company's
businesses or assets which is material to the business of all such
entities taken as a whole, or compels Tyson or Purchaser (or their
respective
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subsidiaries or affiliates) to dispose of or hold separate any portion
of their or the Company's business or assets which is material to the
business of all such entities taken as a whole, (2) prohibits,
restrains or makes illegal the acceptance for payment, payment for or
purchase of Shares pursuant to the Offer or the consummation of the
Merger, (3) imposes material limitations on the ability of Purchaser or
Tyson (or any of their respective subsidiaries or affiliates)
effectively to acquire or to hold or to exercise full rights of
ownership of the Shares purchased pursuant to the Offer including,
without limitation, the right to vote such Shares on all matters
properly presented to the Company's stockholders, (4) imposes material
limitations on the ability of Purchaser or Tyson (or any of their
respective subsidiaries or affiliates) effectively to control in any
material respect any material portion of the business or assets of the
Company and its subsidiaries taken as a whole, or (5) otherwise
materially adversely affects the Company and its subsidiaries taken as
a whole;
(b) there shall have occurred (1) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock
Exchange for a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference with
such exchange not related to market conditions or suspensions or
limitations triggered by price fluctuations on a trading day), (2) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (3)
any limitation (whether or not mandatory) by any United States
governmental or regulatory authority on the extension of credit by
banks or other financial institutions, or (4) in the case of any of the
foregoing existing at the time of the Offer, a material acceleration or
worsening thereof;
(c) except as disclosed in the Merger Agreement or on the Company's
reports filed with the SEC prior to the date of the Merger Agreement,
since the date of the Merger Agreement, there shall have been any
change, event or development having, or that could reasonably be
expected to have, individually or in the aggregate, a material adverse
effect on the condition (financial or otherwise), business, assets,
liabilities or results of operations of the Company and its
subsidiaries taken as a whole;
(d) except as affected by actions specifically permitted by the
Merger Agreement, the representations and warranties of the Company
contained in the Merger Agreement (x) that are qualified by materiality
or material adverse effect shall not be true at and as of the scheduled
expiration of the Offer as if made at and as of such time (except in
respect of representations and warranties made as of a specified date
which shall not be true as of such specified date), and (y) that are
not qualified by materiality or material adverse effect shall not be
true in all material respects at and as of the scheduled expiration
date of the Offer as if made at and as of such time (except in respect
of representations and warranties made as of a specific date which
shall not be true in all material respects as of such specified date);
(e) the Company shall not have performed and complied with, in all
material respects, each agreement and covenant required by the Merger
Agreement to be performed or complied with by it with such exceptions
as would not in the aggregate have a material adverse effect;
(f) the Merger Agreement shall have been terminated in accordance
with its terms; or
(g) Tyson, Purchaser and the Company shall have agreed that
Purchaser shall amend the Offer to terminate the Offer or postpone the
payment for Shares thereunder;
which, in the reasonable judgment of Tyson in any such case, and regardless of
the circumstances, makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payment.
18. Certain Legal Matters; Regulatory Approvals.
General. We are not aware of any governmental license or regulatory permit
that appears to be material to the Company's business that might be adversely
affected by our acquisition of Shares pursuant to the Offer or, except as set
forth below, of any approval or other action by any government or governmental
administrative or
49
<PAGE>
regulatory authority or agency, domestic or foreign, that would be required for
our acquisition or ownership of Shares pursuant to the Offer. Should any such
approval or other action be required, we currently contemplate that, such
approval or other action will be sought. There can be no assurance that any
such approval or other action, if needed, would be obtained (with or without
substantial conditions) or that if such approvals were not obtained or such
other actions were not taken adverse consequences might not result to the
Company's business or certain parts of the Company's business might not have to
be disposed of, any of which could cause us to elect to terminate the Offer
without the purchase of Shares thereunder. Our obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions. See
"The Offer--Conditions to the Offer."
State Takeover Laws. Section 203 of the Delaware General Corporation Law, in
general, prohibits a Delaware corporation such as the Company from engaging in
a "business combination" (defined as a variety of transactions, including
mergers) with an "interested stockholder" (defined generally as a person that
is the beneficial owner of 15% or more of a corporation's outstanding voting
stock) for a period of three years following the time that such person became
an interested stockholder unless, among other things, prior to the time such
person became an interested stockholder, the board of directors of the
corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder.
A number of states have adopted takeover laws and regulations that purport
to be applicable to attempts to acquire securities of corporations that are
incorporated in those states or that have substantial assets, stockholders,
principal executive offices or principal places of business in those states. To
the extent that these state takeover statutes purport to apply to the Offer or
the Merger, we believe that those laws conflict with U.S. federal law and are
an unconstitutional burden on interstate commerce. In 1982, the Supreme Court
of the United States, in EDGAR v. MITE CORP., invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeover of corporations meeting certain requirements more
difficult. The reasoning in that decision is likely to apply to certain other
state takeover statutes. In 1987, however, in CTS CORP. v. DYNAMICS CORP. OF
AMERICA, the Supreme Court of the United States held that the State of Indiana
could as a matter of corporate law and, in particular, those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, as long as those laws were
applicable only under certain conditions. Subsequently, in TLX ACQUISITION
CORP. v. TELEX CORP., a federal district court in Oklahoma ruled that the
Oklahoma statutes were unconstitutional insofar as they apply to corporations
incorporated outside Oklahoma, because they would subject those corporations to
inconsistent regulations. Similarly, in TYSON FOODS, INC. v. MCREYNOLDS, a
federal district court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside
Tennessee. This decision was affirmed by the United State Court of Appeals for
the Sixth Circuit. In December 1988, a federal district court in Florida held,
in GRAND METROPOLITAN PLC v. BUTTERWORTH, that the provisions of the Florida
Affiliated Transactions Act and Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
We have not attempted to comply with any state takeover statutes in
connection with this Supplement to the Offer or the Merger. We reserve the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer or the Merger, and nothing in this Supplement to the
Offer nor any action that we take in connection with the Offer is intended as a
waiver of that right. In the event that it is asserted that one or more
takeover statutes apply to the Offer or the Merger, and it is not determined by
an appropriate court that the statutes in question do not apply or are invalid
as applied to the Offer or the Merger, as applicable, we may be required to
file certain documents with, or receive approvals from, the relevant state
authorities, and we might be unable to accept for payment or purchase Shares
tendered in the Offer or be delayed in continuing or consummating the Offer. In
that case, we may not be obligated to accept for purchase, or pay for, any
Shares tendered. See "The Offer--Conditions to the Offer."
Antitrust. 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
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<PAGE>
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.
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 our substantial compliance with such request. Thereafter,
such waiting period can be extended only by court order.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. See "The Offer--Conditions to the Offer." Any extension of
the waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See "The Offer--Withdrawal Rights." Subject to
certain circumstances described in "The Offer--Extension of Tender Period,"
any extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. If our acquisition of
Shares is delayed pursuant to a request by the Antitrust Division or the FTC
for additional information or documentary material pursuant to the HSR Act,
the Offer may be extended.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as our acquisition of Shares 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 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 Tyson's or the
Company's substantial assets. Private parties (including individual states)
may also bring legal actions under the antitrust laws. We do not believe that
the consummation of the Offer will result in a violation of any applicable
antitrust laws. However, there can be no assurance that a challenge to the
Offer on antitrust grounds will not be made, or if such a challenge is made,
what the result will be. See "The Offer--Conditions to the Offer" for certain
conditions to the Offer, including conditions with respect to litigation and
certain governmental actions. Under the Merger Agreement, Tyson has agreed to
take such actions as may be 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, the Exchange Offer or the
Merger so as to enable the Offer, the Exchange Offer and the Merger to occur
as soon as reasonably practicable. Without limiting the foregoing, Tyson will
agree to divest, hold separate, or agree to any conduct restrictions with
respect to any Tyson or Company assets or may be required by any governmental
entity in order to forego that governmental entity bringing any action to
enjoin the Offer, the Exchange Offer or the Merger.
The Merger Agreement provides that Tyson will pay to the Company a fee of
$70 million if the Merger Agreement is terminated (i) by Tyson or the Company
pursuant to subsection (c) of the section "Termination" or (ii) by the Company
pursuant to subsection (b) of the section "Termination" if the inability to
close is attributable to there being any law or order enacted or entered that
imposes material limitations on Tyson's ability to operate its business, own
its assets, accept Shares for payment in the Offer or acquire the Company,
provided, however, that, in each case, such termination results from any
action, suit, proceeding, judgment, writ, injunction, order or decree with
respect to any antitrust, competition or trade regulation laws that may be
asserted by any governmental entity with respect to the Offer, the Exchange
Offer or the Merger.
19. Fees and Expenses. Merrill Lynch is acting as Tyson's exclusive
financial advisor in connection with the Offer and the Merger. Tyson and the
Purchaser have also engaged Merrill Lynch to act as the Dealer Manager in
connection with the Offer. Pursuant to its engagement letter with Merrill
Lynch, Tyson has agreed to
51
<PAGE>
pay Merrill Lynch, as compensation for its services as financial advisor, a
transaction fee of $14 million payable upon the acceptance for payment by the
Purchaser of Shares pursuant to the Offer, against which a fee of $2 million,
which was paid to Merrill Lynch upon commencement of the Offer, will be
credited. Tyson has also agreed to reimburse Merrill Lynch for its reasonable
out-of-pocket expenses incurred in connection with Merrill Lynch's engagement,
including the reasonable fees and disbursements of counsel, and to indemnify
Merrill Lynch against certain liabilities, including certain liabilities under
the federal securities laws. Tyson will also pay to Stephens Inc. $1 million
for the delivery of a fairness opinion by Stephens Inc.
Tyson has retained MacKenzie Partners, Inc. to act as the Information Agent
and Wilmington Trust Company to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telex, telegraph and personal interviews and may request brokers, dealers,
banks, trust companies and other nominees to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their respective services,
will be reimbursed for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities in connection therewith, including
certain liabilities under the federal securities laws.
We will not pay any fees or commissions to any broker or dealer or any
other person (other than the Dealer Manager, the Information Agent and the
Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be
reimbursed by us for reasonable and necessary costs and expenses incurred by
them in forwarding materials to their customers.
20. Miscellaneous. The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in any jurisdiction in which
the making of the Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, we may, in our discretion, take such
action as we may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Purchaser or Tyson not contained in this
Supplement to the Offer or in the Letter of Transmittal and, if given or made,
such information or representation must not be relied upon as having been
authorized.
We have filed with the SEC a Tender Offer Statement on Schedule TO,
together with exhibits, and numerous amendments to the Schedule TO, together
with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations
under the Exchange Act, furnishing certain additional information with respect
to the Offer. The Schedule TO and any amendments thereto, including exhibits,
may be examined and copies may be obtained from the offices of the SEC in the
manner set forth in "The Offer--Certain Information Concerning Purchaser and
Tyson--Available Information" of this Supplement to the Offer (except that
such information will not be available at the regional offices of the SEC).
TYSON FOODS, INC.
LASSO ACQUISITION CORPORATION
January 5, 2001
52
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF TYSON AND PURCHASER
The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years, of each
director and executive officer of Tyson are set forth below. References herein
to "Tyson" mean Tyson Foods, Inc. Unless otherwise indicated below, the
business address of each director and officer is c/o Tyson Foods, Inc., 2210
West Oaklawn Drive, Springdale, Arkansas 72762-6999. Where no date is shown,
the individual has occupied the position indicated for the past five years.
Unless otherwise indicated, each occupation set forth opposite an individual's
name refers to employment with Tyson. Except as described herein, none of the
directors and officers of Tyson listed below has, during the past five years,
(i) been convicted in a criminal proceeding or (ii) been a party to any
judicial or administrative proceeding 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. All directors and officers
listed below are citizens of the United States.
On August 22, 1996, Don Tyson entered into a Stipulation and Consent with
the SEC pursuant to which Mr. Tyson, without admitting or denying any
wrongdoing, consented and agreed to the entry of a Final Judgment permanently
enjoining him from violating Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder and requiring the payment of a civil money
penalty of $46,125. The Stipulation and Consent was entered as a Final
Judgment on October 8, 1996, by the United States District Court for the
Western District of Arkansas. The Stipulation and Consent arose as a result of
the SEC's investigation of certain purchases and sales of common stock of
Arctic Alaska Fisheries Corporation by Fred Cameron, an acquaintance of Mr.
Tyson, in June 1992.
DIRECTORS AND EXECUTIVE OFFICERS OF TYSON
<TABLE>
<CAPTION>
Current Principal Occupation or Employment and Five-Year
Name Employment History
---- --------------------------------------------------------
<S> <C>
Don Tyson............... Senior Chairman of Tyson's Board, served as Chairman of Tyson's
Board until April 1995 when he was named Senior Chairman. Mr.
Tyson served as Chief Executive Officer until March 1991 and has
been a member of Tyson's Board since 1952.
John H. Tyson........... Chairman of Tyson's Board since October 1, 1998 and assumed
responsibilities as President and Chief Executive Officer in
April 2000. He previously served as Vice Chairman since 1997 and
President of the Beef and Pork Division since 1993. Mr. Tyson
has been a member of Tyson's Board since 1984.
Joe F. Starr............ A private investor, served as a Vice President of Tyson until
1996. Mr. Starr has been a member of the Board since 1969.
Leland E. Tollett....... Served as Chairman and Chief Executive Officer from 1995 to
1998. An employee of Tyson since 1959, Mr. Tollett was President
and Chief Executive Officer from 1991 to 1995. Mr. Tollett has
been a member of Tyson's Board since 1984.
Shelby Massey........... Farmer and a private investor. He served as Senior Vice Chairman
of Tyson's Board from 1985 to 1988 and has been a member of
Tyson's Board since 1985.
Barbara A. Tyson........ Vice President of Tyson. Ms. Tyson has served in related
capacities since 1988. Ms. Tyson has been a member of Tyson's
Board since 1988.
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
Current Principal Occupation or Employment and Five-Year
Name Employment History
---- --------------------------------------------------------
<S> <C>
Lloyd V. Hackley........ President and Chief Executive Officer of Lloyd V. Hackley and
Associates, Inc. He is a director of Branch Banking and Trust
Corporation headquartered in Winston-Salem, North Carolina. He
was president of the North Carolina Community College System
from 1995 to 1997. Mr. Hackley has been a member of Tyson's
Board since 1992.
Donald E. Wray.......... Retired as President of the Tyson in March 2000 after 39 years
with Tyson in various capacities. Mr. Wray has served as
President and Chief Operating Officer from 1995 to 1999 after
serving as Chief Operating Officer since 1991. Mr. Wray has been
a member of Tyson's Board since 1994.
Gerald M. Johnston...... Private investor, was Executive Vice President of Finance for
Tyson from 1981 to 1996 when he retired and became a consultant
to the Company. He is a director of Fairfield Communities, Inc.
Mr. Johnston has been a member of Tyson's Board since 1996.
Jim Kever............... Director of Quintiles Transnational ("Quintiles") since May 6,
1999 and has served as Chief Executive Officer of Envoy
Corporation ("Envoy"), subsidiary of Quintiles, since Envoy was
acquired by Quintiles in March 1999. Mr. Kever served as
President and Co-Chief Executive Officer of Envoy from August
1995 until March 1999 and as a director from Envoy's
incorporation in August 1994 until March 1999. Mr. Kever also is
a director of Transaction System Architects, Inc., a supplier of
electronic payment software products and network integration
solutions, and 3D Systems Corporation, a manufacturer of
technologically advanced solid imaging systems and prototype
models. Mr. Kever has been a member of Tyson's Board since May
1999.
David A. Jones.......... Chairman and Chief Executive Officer of Rayovac Corporation
since 1996. Before joining Rayovac, Mr. Jones served as
President, Chief Executive Officer and Chairman of Thermoscan,
Inc. and as President, Chief Executive Officer and Chairman of
Regina Company. He was previously with Electrolux Corporation
and General Electric Co. Mr. Jones is also a director of SCI,
Inc., an electronics manufacturer, and Spectrum Brands, a
specialty chemical manufacturer. Mr. Jones was elected to the
Board in August 2000.
Barbara Allen........... President and Chief Operating Officer of Paladin Resources and
has served in those capacities since 1999. Before joining
Paladin Resources, Ms. Allen was President of Corporate Supplier
Solutions for Corporate Express from 1998 to 1999. Previously,
she was with Quaker Oats Co. for 23 years where she held several
senior positions including Executive Vice President of
International Foods, Vice President of Corporate Strategic
Planning, President of the Frozen Foods Division and Vice
President of Marketing. Ms. Allen is also a director of Maytag
Corporation and Chart House Enterprises. Ms. Allen was elected
to the Board in November 2000.
Neely E. Cassady........ Chairman of the Board and President of Cassady Investments, Inc.
and served as a Senator in the Arkansas General Assembly from
1983 to 1996. Mr. Cassady has been a member of the Board since
1974.
Fred Vorsanger.......... Private business consultant, manager of Bud Walton Arena and
Vice President Emeritus of Finance and Administration at the
University of Arkansas. He is a director of McIlroy Bank & Trust
of Fayetteville, Arkansas. Mr. Vorsanger has been a member of
the Board since 1977.
</TABLE>
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years of each
director and executive officer of Purchaser are set forth below. Unless
otherwise indicated below, the business address of each director and officer is
c/o Tyson Foods, Inc., 2210 West Oaklawn Drive, Springdale, Arkansas 72762-
6999. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Purchaser. Except as described
herein, none of the directors and officers of Purchaser listed below has,
during the past five years, (i) been convicted in a criminal proceeding or (ii)
been a party to any judicial or administrative proceeding that resulted in a
judgement, 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. All directors
and officers listed below are citizens of the United States.
On August 22, 1996, Don Tyson entered into a Stipulation and Consent with
the SEC pursuant to which Mr. Tyson, without admitting or denying any
wrongdoing, consented and agreed to the entry of a Final Judgment permanently
enjoining him from violating Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder and requiring the payment of a civil money
penalty of $46,125. The Stipulation and Consent was entered as a Final Judgment
on October 8, 1996, by the United States District Court for the Western
District of Arkansas. The Stipulation and Consent arose as a result of the
SEC's investigation of certain purchases and sales of common stock of Arctic
Alaska Fisheries Corporation by Fred Cameron, an acquaintance of Mr. Tyson, in
June 1992.
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
<TABLE>
<CAPTION>
Current Principal Occupation or Employment and Five-Year
Name Employment History
---- --------------------------------------------------------
<C> <S>
Don Tyson......... Director. Senior Chairman of Tyson's Board, served as
Chairman of Tyson's Board until April 1995 when he was
named Senior Chairman. Mr. Tyson served as Chief Executive
Officer until March 1991 and has been a member of Tyson's
Board since 1952.
John H. Tyson..... Director and President. Chairman of Tyson's Board since
October 1, 1998 and assumed responsibilities as President
and Chief Executive Officer in April 2000. He previously
served as Vice Chairman since 1997 and President of the
Beef and Pork Division since 1993. Mr. Tyson has been a
member of Tyson's Board since 1984.
Greg W. Lee....... Director. Mr. Lee was appointed Chief Operating Officer of
Tyson in 1999 after serving as President of Tyson's
Foodservice Group since 1998 and Executive Vice President,
Sales, Marketing and Technical Services since 1995.
Steve Hankins..... Executive Vice President. Mr. Hankins was appointed Tyson's
Executive Vice President and Chief Financial Officer in
1998 after serving as Tyson's Senior Vice President,
Financial Planning and Shared Services since 1997 and Vice
President, Management Information Systems since 1993.
Les Baledge....... Executive Vice President. Mr. Baledge was appointed Tyson's
Executive Vice President and General Counsel in 2000 after
serving as Tyson's Executive Vice President and Associate
General Counsel since 1999 upon joining Tyson. Prior to
joining Tyson, Mr. Baledge was of counsel to the law firm
of Kutak Rock LLP and a partner with the Rose Law Firm.
R. Read Hudson.... Secretary. Mr. Hudson was appointed Tyson's Secretary and
Corporate Counsel in 1998 after serving as Tyson's
Corporate Counsel since 1992.
Dennis Leatherby.. Treasurer. Mr. Leatherby was appointed Tyson's Senior Vice
President, Finance and Treasurer in 1998 after serving as
Vice President and Treasurer since 1997 and Treasurer since
1994.
</TABLE>
55
<PAGE>
SCHEDULE II
TRANSACTIONS IN SHARES
<TABLE>
<CAPTION>
No. of Price
Shares Per
Date Purchased Share*
---- --------- ------
<S> <C> <C>
11/30/00 119,000 22.32
12/1/00 455,200 22.56
</TABLE>
--------
* Net of Brokerage Commissions
56
<PAGE>
The Letter of Transmittal and certificates for Shares and any other
required documents should be sent to the Depositary at one of the addresses
set forth below:
The Depositary for the Offer is:
WILMINGTON TRUST COMPANY
By Mail: By Hand/Overnight Courier:
Corporate Trust Reorg. Svcs. Wilmington Trust Company
Wilmington Trust Company 1105 North Market Street, 1st Floor
P O Box 8861 Wilmington, DE 19801
Wilmington, DE 19899-8861 Attn: Corporate Trust Operations
By Facsimile:
(302) 651-1079
Confirm by Telephone:
(302) 651-8869
If you have questions or need additional copies of this Supplement to the
Offer and the Letter of Transmittal, you can call the Information Agent or the
Dealer Manager at their respective addresses and telephone numbers set forth
below. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[MacKenzie LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
E-mail: [email protected]
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
Four World Financial Center
New York, New York 10080
Call Collect: (212) 236-3790
