x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
|
71-0225165
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
2200 West Don Tyson Parkway, Springdale, Arkansas
|
|
72762-6999
|
(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
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|
|
|
Emerging growth company
|
|
¨
|
Class
|
|
Outstanding Shares
|
|
Class A Common Stock, $0.10 Par Value (Class A stock)
|
|
295,257,039
|
|
Class B Common Stock, $0.10 Par Value (Class B stock)
|
|
70,010,355
|
|
|
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PAGE
|
Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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||
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Item 1A.
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||
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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||
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Item 1.
|
Financial Statements
|
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Sales
|
$
|
10,193
|
|
|
$
|
10,229
|
|
Cost of Sales
|
8,838
|
|
|
8,786
|
|
||
Gross Profit
|
1,355
|
|
|
1,443
|
|
||
Selling, General and Administrative
|
548
|
|
|
521
|
|
||
Operating Income
|
807
|
|
|
922
|
|
||
Other (Income) Expense:
|
|
|
|
||||
Interest income
|
(2
|
)
|
|
(2
|
)
|
||
Interest expense
|
99
|
|
|
88
|
|
||
Other, net
|
(3
|
)
|
|
(6
|
)
|
||
Total Other (Income) Expense
|
94
|
|
|
80
|
|
||
Income before Income Taxes
|
713
|
|
|
842
|
|
||
Income Tax Expense (Benefit)
|
161
|
|
|
(790
|
)
|
||
Net Income
|
552
|
|
|
1,632
|
|
||
Less: Net Income Attributable to Noncontrolling Interests
|
1
|
|
|
1
|
|
||
Net Income Attributable to Tyson
|
$
|
551
|
|
|
$
|
1,631
|
|
Weighted Average Shares Outstanding:
|
|
|
|
||||
Class A Basic
|
294
|
|
|
296
|
|
||
Class B Basic
|
70
|
|
|
70
|
|
||
Diluted
|
366
|
|
|
371
|
|
||
Net Income Per Share Attributable to Tyson:
|
|
|
|
||||
Class A Basic
|
$
|
1.54
|
|
|
$
|
4.54
|
|
Class B Basic
|
$
|
1.39
|
|
|
$
|
4.09
|
|
Diluted
|
$
|
1.50
|
|
|
$
|
4.40
|
|
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Net Income
|
$
|
552
|
|
|
$
|
1,632
|
|
Other Comprehensive Income (Loss), Net of Taxes:
|
|
|
|
||||
Derivatives accounted for as cash flow hedges
|
(9
|
)
|
|
(1
|
)
|
||
Investments
|
1
|
|
|
—
|
|
||
Currency translation
|
8
|
|
|
1
|
|
||
Postretirement benefits
|
(3
|
)
|
|
2
|
|
||
Total Other Comprehensive Income (Loss), Net of Taxes
|
(3
|
)
|
|
2
|
|
||
Comprehensive Income
|
549
|
|
|
1,634
|
|
||
Less: Comprehensive Income Attributable to Noncontrolling Interests
|
1
|
|
|
1
|
|
||
Comprehensive Income Attributable to Tyson
|
$
|
548
|
|
|
$
|
1,633
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
400
|
|
|
$
|
270
|
|
Accounts receivable, net
|
1,892
|
|
|
1,723
|
|
||
Inventories
|
3,777
|
|
|
3,513
|
|
||
Other current assets
|
232
|
|
|
182
|
|
||
Total Current Assets
|
6,301
|
|
|
5,688
|
|
||
Net Property, Plant and Equipment
|
7,018
|
|
|
6,169
|
|
||
Goodwill
|
10,814
|
|
|
9,739
|
|
||
Intangible Assets, net
|
7,441
|
|
|
6,759
|
|
||
Other Assets
|
761
|
|
|
754
|
|
||
Total Assets
|
$
|
32,335
|
|
|
$
|
29,109
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current debt
|
3,917
|
|
|
1,911
|
|
||
Accounts payable
|
1,962
|
|
|
1,694
|
|
||
Other current liabilities
|
1,551
|
|
|
1,426
|
|
||
Total Current Liabilities
|
7,430
|
|
|
5,031
|
|
||
Long-Term Debt
|
8,075
|
|
|
7,962
|
|
||
Deferred Income Taxes
|
2,330
|
|
|
2,107
|
|
||
Other Liabilities
|
1,241
|
|
|
1,198
|
|
||
Commitments and Contingencies (Note 17)
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Common stock ($0.10 par value):
|
|
|
|
||||
Class A-authorized 900 million shares, issued 378 million shares
|
38
|
|
|
38
|
|
||
Convertible Class B-authorized 900 million shares, issued 70 million shares
|
7
|
|
|
7
|
|
||
Capital in excess of par value
|
4,332
|
|
|
4,387
|
|
||
Retained earnings
|
12,719
|
|
|
12,329
|
|
||
Accumulated other comprehensive loss
|
(18
|
)
|
|
(15
|
)
|
||
Treasury stock, at cost – 82 million shares at December 29, 2018 and September 29, 2018
|
(3,951
|
)
|
|
(3,943
|
)
|
||
Total Tyson Shareholders’ Equity
|
13,127
|
|
|
12,803
|
|
||
Noncontrolling Interests
|
132
|
|
|
8
|
|
||
Total Shareholders’ Equity
|
13,259
|
|
|
12,811
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
32,335
|
|
|
$
|
29,109
|
|
|
Three Months Ended
|
||||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
||
Class A Common Stock:
|
|
|
|
|
|
|
|
||||||
Balance at beginning and end of period
|
378
|
|
|
$
|
38
|
|
|
378
|
|
|
$
|
38
|
|
|
|
|
|
|
|
|
|
||||||
Class B Common Stock:
|
|
|
|
|
|
|
|
||||||
Balance at beginning and end of period
|
70
|
|
|
7
|
|
|
70
|
|
|
7
|
|
||
|
|
|
|
|
|
|
|
||||||
Capital in Excess of Par Value:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
4,387
|
|
|
|
|
4,378
|
|
||||
Stock-based compensation
|
|
|
(55
|
)
|
|
|
|
(32
|
)
|
||||
Balance at end of period
|
|
|
4,332
|
|
|
|
|
4,346
|
|
||||
|
|
|
|
|
|
|
|
||||||
Retained Earnings:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
12,329
|
|
|
|
|
9,776
|
|
||||
Net income attributable to Tyson
|
|
|
551
|
|
|
|
|
1,631
|
|
||||
Dividends
|
|
|
(161
|
)
|
|
|
|
(135
|
)
|
||||
Balance at end of period
|
|
|
12,719
|
|
|
|
|
11,272
|
|
||||
|
|
|
|
|
|
|
|
||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
(15
|
)
|
|
|
|
16
|
|
||||
Other Comprehensive Income (Loss)
|
|
|
(3
|
)
|
|
|
|
2
|
|
||||
Balance at end of period
|
|
|
(18
|
)
|
|
|
|
18
|
|
||||
|
|
|
|
|
|
|
|
||||||
Treasury Stock:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
82
|
|
|
(3,943
|
)
|
|
80
|
|
|
(3,674
|
)
|
||
Purchase of Class A common stock
|
1
|
|
|
(83
|
)
|
|
2
|
|
|
(164
|
)
|
||
Stock-based compensation
|
(1
|
)
|
|
75
|
|
|
(2
|
)
|
|
112
|
|
||
Balance at end of period
|
82
|
|
|
(3,951
|
)
|
|
80
|
|
|
(3,726
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Total Shareholders’ Equity Attributable to Tyson
|
|
|
$
|
13,127
|
|
|
|
|
$
|
11,955
|
|
||
|
|
|
|
|
|
|
|
||||||
Equity Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
$
|
8
|
|
|
|
|
$
|
18
|
|
||
Net income attributable to noncontrolling interests
|
|
|
1
|
|
|
|
|
1
|
|
||||
Business combination and other
|
|
|
123
|
|
|
|
|
—
|
|
||||
Total Equity Attributable to Noncontrolling Interests
|
|
|
$
|
132
|
|
|
|
|
$
|
19
|
|
||
|
|
|
|
|
|
|
|
||||||
Total Shareholders’ Equity
|
|
|
$
|
13,259
|
|
|
|
|
$
|
11,974
|
|
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
552
|
|
|
$
|
1,632
|
|
Depreciation and amortization
|
250
|
|
|
229
|
|
||
Deferred income taxes
|
18
|
|
|
(967
|
)
|
||
Other, net
|
64
|
|
|
29
|
|
||
Net changes in operating assets and liabilities
|
(16
|
)
|
|
203
|
|
||
Cash Provided by Operating Activities
|
868
|
|
|
1,126
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(318
|
)
|
|
(296
|
)
|
||
Purchases of marketable securities
|
(15
|
)
|
|
(12
|
)
|
||
Proceeds from sale of marketable securities
|
15
|
|
|
9
|
|
||
Acquisitions, net of cash acquired
|
(2,141
|
)
|
|
(226
|
)
|
||
Proceeds from sale of business
|
—
|
|
|
125
|
|
||
Other, net
|
10
|
|
|
(22
|
)
|
||
Cash Used for Investing Activities
|
(2,449
|
)
|
|
(422
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Payments on debt
|
(12
|
)
|
|
(429
|
)
|
||
Proceeds from issuance of debt
|
1,807
|
|
|
—
|
|
||
Borrowings on revolving credit facility
|
—
|
|
|
655
|
|
||
Payments on revolving credit facility
|
—
|
|
|
(650
|
)
|
||
Proceeds from issuance of commercial paper
|
5,538
|
|
|
5,728
|
|
||
Repayments of commercial paper
|
(5,406
|
)
|
|
(5,824
|
)
|
||
Purchases of Tyson Class A common stock
|
(83
|
)
|
|
(164
|
)
|
||
Dividends
|
(134
|
)
|
|
(108
|
)
|
||
Stock options exercised
|
3
|
|
|
63
|
|
||
Other, net
|
(2
|
)
|
|
—
|
|
||
Cash (Used for) Provided by Financing Activities
|
1,711
|
|
|
(729
|
)
|
||
Effect of Exchange Rate Changes on Cash
|
—
|
|
|
—
|
|
||
Increase (Decrease) in Cash and Cash Equivalents
|
130
|
|
|
(25
|
)
|
||
Cash and Cash Equivalents at Beginning of Year
|
270
|
|
|
318
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
400
|
|
|
$
|
293
|
|
Three Months Ended December 30, 2017:
|
As Previously Reported
|
Adjustments
|
As Recast
|
||||||
Cost of Sales
|
$
|
8,778
|
|
$
|
8
|
|
$
|
8,786
|
|
Selling, General and Administrative
|
$
|
524
|
|
$
|
(3
|
)
|
$
|
521
|
|
Operating Income
|
$
|
927
|
|
$
|
(5
|
)
|
$
|
922
|
|
Other (Income) Expense
|
$
|
85
|
|
$
|
(5
|
)
|
$
|
80
|
|
|
in millions
|
|
||
Cash and cash equivalents
|
|
$
|
186
|
|
Accounts receivable
|
|
118
|
|
|
Inventories
|
|
257
|
|
|
Other current assets
|
|
34
|
|
|
Property, Plant and Equipment
|
|
725
|
|
|
Goodwill
|
|
1,073
|
|
|
Intangible Assets
|
|
745
|
|
|
Other Assets
|
|
28
|
|
|
Current debt
|
|
(73
|
)
|
|
Accounts payable
|
|
(206
|
)
|
|
Other current liabilities
|
|
(100
|
)
|
|
Long-Term Debt
|
|
(115
|
)
|
|
Deferred Income Taxes
|
|
(213
|
)
|
|
Other Liabilities
|
|
(10
|
)
|
|
Noncontrolling Interests
|
|
(122
|
)
|
|
Net assets acquired
|
|
$
|
2,327
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Processed products
|
$
|
2,064
|
|
|
$
|
1,981
|
|
Livestock
|
1,121
|
|
|
1,006
|
|
||
Supplies and other
|
592
|
|
|
526
|
|
||
Total inventory
|
$
|
3,777
|
|
|
$
|
3,513
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Land
|
$
|
168
|
|
|
$
|
154
|
|
Buildings and leasehold improvements
|
4,455
|
|
|
4,115
|
|
||
Machinery and equipment
|
8,122
|
|
|
7,720
|
|
||
Land improvements and other
|
363
|
|
|
357
|
|
||
Buildings and equipment under construction
|
917
|
|
|
689
|
|
||
|
14,025
|
|
|
13,035
|
|
||
Less accumulated depreciation
|
7,007
|
|
|
6,866
|
|
||
Net property, plant and equipment
|
$
|
7,018
|
|
|
$
|
6,169
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Accrued salaries, wages and benefits
|
$
|
476
|
|
|
$
|
549
|
|
Income taxes payable
|
237
|
|
|
72
|
|
||
Other
|
838
|
|
|
805
|
|
||
Total other current liabilities
|
$
|
1,551
|
|
|
$
|
1,426
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
737
|
|
|
605
|
|
||
Senior notes:
|
|
|
|
||||
Notes due May 2019 (3.16% at 12/29/2018)
|
300
|
|
|
300
|
|
||
2.65% Notes due August 2019
|
1,000
|
|
|
1,000
|
|
||
Notes due June 2020 (3.29% at 12/29/2018)
|
350
|
|
|
350
|
|
||
Notes due August 2020 (3.10% at 12/29/2018)
|
400
|
|
|
400
|
|
||
4.10% Notes due September 2020
|
281
|
|
|
281
|
|
||
2.25% Notes due August 2021
|
500
|
|
|
500
|
|
||
4.50% Senior notes due June 2022
|
1,000
|
|
|
1,000
|
|
||
3.90% Senior notes due September 2023
|
400
|
|
|
400
|
|
||
3.95% Notes due August 2024
|
1,250
|
|
|
1,250
|
|
||
3.55% Notes due June 2027
|
1,350
|
|
|
1,350
|
|
||
7.00% Notes due January 2028
|
18
|
|
|
18
|
|
||
6.13% Notes due November 2032
|
161
|
|
|
161
|
|
||
4.88% Notes due August 2034
|
500
|
|
|
500
|
|
||
5.15% Notes due August 2044
|
500
|
|
|
500
|
|
||
4.55% Notes due June 2047
|
750
|
|
|
750
|
|
||
5.10% Notes due September 2048
|
500
|
|
|
500
|
|
||
Discount on senior notes
|
(15
|
)
|
|
(15
|
)
|
||
Term loan:
|
|
|
|
||||
364-Day Term Loan due November 2019 (3.50% at 12/29/2018)
|
1,800
|
|
|
—
|
|
||
Other
|
257
|
|
|
73
|
|
||
Unamortized debt issuance costs
|
(47
|
)
|
|
(50
|
)
|
||
Total debt
|
11,992
|
|
|
9,873
|
|
||
Less current debt
|
3,917
|
|
|
1,911
|
|
||
Total long-term debt
|
$
|
8,075
|
|
|
$
|
7,962
|
|
|
|
Three Months Ended
|
||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
||||||
Shares repurchased:
|
|
|
|
|
|
|
|
|
||||||
Under share repurchase program
|
|
0.9
|
|
|
$
|
50
|
|
|
1.5
|
|
|
$
|
120
|
|
To fund certain obligations under equity compensation plans
|
|
0.5
|
|
|
33
|
|
|
0.6
|
|
|
44
|
|
||
Total share repurchases
|
|
1.4
|
|
|
$
|
83
|
|
|
2.1
|
|
|
$
|
164
|
|
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
552
|
|
|
$
|
1,632
|
|
Less: Net income attributable to noncontrolling interests
|
1
|
|
|
1
|
|
||
Net income attributable to Tyson
|
551
|
|
|
1,631
|
|
||
Less dividends declared:
|
|
|
|
||||
Class A
|
133
|
|
|
111
|
|
||
Class B
|
28
|
|
|
24
|
|
||
Undistributed earnings
|
$
|
390
|
|
|
$
|
1,496
|
|
|
|
|
|
||||
Class A undistributed earnings
|
$
|
321
|
|
|
$
|
1,233
|
|
Class B undistributed earnings
|
69
|
|
|
263
|
|
||
Total undistributed earnings
|
$
|
390
|
|
|
$
|
1,496
|
|
Denominator:
|
|
|
|
||||
Denominator for basic earnings per share:
|
|
|
|
||||
Class A weighted average shares
|
294
|
|
|
296
|
|
||
Class B weighted average shares, and shares under the if-converted method for diluted earnings per share
|
70
|
|
|
70
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options, restricted stock and performance units
|
2
|
|
|
5
|
|
||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversions
|
366
|
|
|
371
|
|
||
|
|
|
|
||||
Net income per share attributable to Tyson:
|
|
|
|
||||
Class A basic
|
$
|
1.54
|
|
|
$
|
4.54
|
|
Class B basic
|
$
|
1.39
|
|
|
$
|
4.09
|
|
Diluted
|
$
|
1.50
|
|
|
$
|
4.40
|
|
Dividends Declared Per Share:
|
|
|
|
||||
Class A
|
$
|
0.450
|
|
|
$
|
0.375
|
|
Class B
|
$
|
0.405
|
|
|
$
|
0.338
|
|
in millions, except soy meal tons
|
Metric
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
Commodity:
|
|
|
|
|
|
||||
Corn
|
Bushels
|
|
63
|
|
|
112
|
|
||
Soy Meal
|
Tons
|
|
607,200
|
|
|
651,700
|
|
||
Live Cattle
|
Pounds
|
|
256
|
|
|
105
|
|
||
Lean Hogs
|
Pounds
|
|
151
|
|
|
39
|
|
||
Foreign Currency
|
United States dollar
|
|
$
|
261
|
|
|
$
|
89
|
|
Interest Rate Swaps
|
Average monthly debt
|
|
$
|
400
|
|
|
$
|
400
|
|
Treasury Rate Locks
|
Average monthly debt
|
|
$
|
1,200
|
|
|
$
|
—
|
|
•
|
Cash Flow Hedges – include certain commodity forward and option contracts of forecasted purchases (i.e., grains), interest rate swaps and locks, and certain foreign exchange forward contracts.
|
•
|
Fair Value Hedges – include certain commodity forward contracts of firm commitments (i.e., livestock).
|
|
Gain (Loss)
Recognized in OCI
On Derivatives
|
|
|
Consolidated Condensed
Statements of Income
Classification
|
|
Gain (Loss)
Reclassified from
OCI to Earnings
|
|
||||||||||
|
Three Months Ended
|
|
|
|
Three Months Ended
|
||||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||
Cash flow hedge – derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
Cost of Sales
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
Interest rate hedges
|
(18
|
)
|
|
—
|
|
|
Interest expense
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
(20
|
)
|
|
$
|
(2
|
)
|
|
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
|
|
in millions
|
|
|||||
|
Consolidated Condensed
Statements of Income
Classification
|
|
Three Months Ended
|
||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
|||||
Gain (Loss) on forwards
|
Cost of Sales
|
|
$
|
(1
|
)
|
|
$
|
(7
|
)
|
Gain (Loss) on purchase contract
|
Cost of Sales
|
|
1
|
|
|
7
|
|
|
|
|
Gain (Loss)
Recognized in Earnings
|
|
|||||
|
Consolidated Condensed
Statements of Income Classification |
|
Three Months Ended
|
||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
|||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Commodity contracts
|
Sales
|
|
$
|
1
|
|
|
$
|
9
|
|
Commodity contracts
|
Cost of Sales
|
|
3
|
|
|
(22
|
)
|
||
Foreign exchange contracts
|
Other Income/Expense
|
|
—
|
|
|
—
|
|
||
Total
|
|
|
$
|
4
|
|
|
$
|
(13
|
)
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets in non-active markets;
|
•
|
Inputs other than quoted prices that are observable for the asset or liability; and
|
•
|
Inputs derived principally from or corroborated by other observable market data.
|
December 29, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
Total
|
||||||||||
Other Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Undesignated
|
—
|
|
|
31
|
|
|
—
|
|
|
(3
|
)
|
|
28
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Other Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-current
|
—
|
|
|
46
|
|
|
52
|
|
|
—
|
|
|
98
|
|
|||||
Deferred compensation assets
|
6
|
|
|
280
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|||||
Total assets
|
$
|
6
|
|
|
$
|
362
|
|
|
$
|
52
|
|
|
$
|
(3
|
)
|
|
$
|
417
|
|
Other Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
17
|
|
Undesignated
|
—
|
|
|
41
|
|
|
—
|
|
|
(23
|
)
|
|
18
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
35
|
|
September 29, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
Total
|
||||||||||
Other Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Undesignated
|
—
|
|
|
44
|
|
|
—
|
|
|
(19
|
)
|
|
25
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Other Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-current
|
—
|
|
|
46
|
|
|
51
|
|
|
—
|
|
|
97
|
|
|||||
Deferred compensation assets
|
21
|
|
|
295
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||
Total assets
|
$
|
21
|
|
|
$
|
388
|
|
|
$
|
51
|
|
|
$
|
(20
|
)
|
|
$
|
440
|
|
Other Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
Undesignated
|
—
|
|
|
35
|
|
|
—
|
|
|
(30
|
)
|
|
5
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
5
|
|
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Balance at beginning of year
|
$
|
51
|
|
|
$
|
51
|
|
Total realized and unrealized gains (losses):
|
|
|
|
||||
Included in earnings
|
—
|
|
|
—
|
|
||
Included in other comprehensive income (loss)
|
—
|
|
|
—
|
|
||
Purchases
|
7
|
|
|
4
|
|
||
Issuances
|
—
|
|
|
—
|
|
||
Settlements
|
(6
|
)
|
|
(5
|
)
|
||
Balance at end of period
|
$
|
52
|
|
|
$
|
50
|
|
Total gains (losses) for the three-month period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||||||||||||||||||
|
Amortized
Cost Basis |
|
|
Fair
Value |
|
|
Unrealized
Gain (Loss) |
|
|
Amortized
Cost Basis |
|
|
Fair
Value |
|
|
Unrealized
Gain (Loss) |
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. treasury and agency
|
$
|
47
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
47
|
|
|
$
|
(1
|
)
|
Corporate and asset-backed
|
53
|
|
|
52
|
|
|
(1
|
)
|
|
52
|
|
|
51
|
|
|
(1
|
)
|
|
December 29, 2018
|
|
September 29, 2018
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Total debt
|
$
|
11,723
|
|
|
$
|
11,992
|
|
|
$
|
9,775
|
|
|
$
|
9,873
|
|
|
Pension Plans
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
|
|
|
|
||||
Service cost
|
$
|
1
|
|
|
$
|
2
|
|
Interest cost
|
16
|
|
|
16
|
|
||
Expected return on plan assets
|
(14
|
)
|
|
(16
|
)
|
||
Amortization of net actuarial loss
|
—
|
|
|
1
|
|
||
Settlement loss
|
19
|
|
|
—
|
|
||
Net periodic cost
|
$
|
22
|
|
|
$
|
3
|
|
|
Postretirement Benefit Plans
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
|
|
|
|
||||
Amortization of prior service credit
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
Net periodic credit
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
|
Three Months Ended
|
||||||||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||||||
|
|
Before Tax
|
Tax
|
After Tax
|
|
Before Tax
|
Tax
|
After Tax
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives accounted for as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||||||
(Gain) loss reclassified to interest expense
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
(Gain) loss reclassified to cost of sales
|
|
7
|
|
(2
|
)
|
5
|
|
|
1
|
|
(1
|
)
|
—
|
|
||||||
Unrealized gain (loss)
|
|
(20
|
)
|
6
|
|
(14
|
)
|
|
(2
|
)
|
1
|
|
(1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Investments:
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain (loss)
|
|
1
|
|
—
|
|
1
|
|
|
(1
|
)
|
1
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation:
|
|
|
|
|
|
|
|
|
||||||||||||
Translation adjustment
|
|
9
|
|
(1
|
)
|
8
|
|
|
1
|
|
—
|
|
1
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Postretirement benefits
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain (loss)
|
|
(28
|
)
|
8
|
|
(20
|
)
|
|
2
|
|
—
|
|
2
|
|
||||||
Pension settlement reclassified to other (income) expense
|
|
23
|
|
(6
|
)
|
17
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
|
$
|
(8
|
)
|
$
|
5
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
|
Three Months Ended
|
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
||||
Sales:
|
|
|
|
|
||||
Beef
|
$
|
3,926
|
|
|
$
|
3,886
|
|
|
Pork
|
1,179
|
|
|
1,283
|
|
|
||
Chicken
|
3,115
|
|
|
2,997
|
|
|
||
Prepared Foods
|
2,149
|
|
|
2,292
|
|
|
||
Other
|
143
|
|
|
88
|
|
|
||
Intersegment
|
(319
|
)
|
|
(317
|
)
|
|
||
Total sales
|
$
|
10,193
|
|
|
$
|
10,229
|
|
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
|
||||
Beef
|
$
|
305
|
|
|
$
|
256
|
|
|
Pork
|
95
|
|
|
151
|
|
|
||
Chicken
|
160
|
|
(a)
|
272
|
|
|
||
Prepared Foods
|
265
|
|
|
256
|
|
|
||
Other
|
(18
|
)
|
(b)
|
(13
|
)
|
(b)
|
||
Total operating income
|
807
|
|
|
922
|
|
|
||
|
|
|
|
|
||||
Total other (income) expense
|
94
|
|
|
80
|
|
|
||
|
|
|
|
|
||||
Income before income taxes
|
$
|
713
|
|
|
$
|
842
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
December 29, 2018
|
||||||||||||||||||||||
|
Retail(a)
|
|
Foodservice(b)
|
|
International(c)
|
|
Industrial and Other(d)
|
|
Intersegment
|
|
Total
|
||||||||||||
Beef
|
$
|
1,851
|
|
|
$
|
1,017
|
|
|
$
|
628
|
|
|
$
|
340
|
|
|
$
|
90
|
|
|
$
|
3,926
|
|
Pork
|
337
|
|
|
91
|
|
|
225
|
|
|
311
|
|
|
215
|
|
|
1,179
|
|
||||||
Chicken
|
1,372
|
|
|
1,130
|
|
|
157
|
|
|
442
|
|
|
14
|
|
|
3,115
|
|
||||||
Prepared Foods
|
1,275
|
|
|
789
|
|
|
24
|
|
|
61
|
|
|
—
|
|
|
2,149
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
143
|
|
||||||
Intersegment
|
|
|
|
|
|
|
|
|
(319
|
)
|
|
(319
|
)
|
||||||||||
Total
|
$
|
4,835
|
|
|
$
|
3,027
|
|
|
$
|
1,177
|
|
|
$
|
1,154
|
|
|
$
|
—
|
|
|
$
|
10,193
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
General – Our operating income of $807 million remained strong for the first quarter of fiscal 2019, although down from last year’s record results, as strong Beef and Prepared Foods results were partially offset by a decline in Pork and Chicken margins. In the three months ended December 29, 2018, our results were impacted by $26 million of purchase accounting and acquisition related costs associated with the Keystone Foods acquisition and $8 million of restructuring and related charges.
|
•
|
Market Environment - According to the United States Department of Agriculture (USDA), domestic protein production (beef, pork, chicken and turkey) increased approximately 2% in the first quarter of fiscal 2019 compared to the same period in fiscal 2018. We continue to monitor recent trade and tariff activity and its potential impact to exports and inputs costs across all our segments. Currently, we are experiencing impacts to domestic and export prices, primarily chicken and pork, resulting from uncertainty in trade policies and increased tariffs. Additionally, all segments experienced increased operating and labor costs. We pursue recovery of these increased costs through pricing. The Beef segment experienced strong export demand and more favorable domestic market conditions associated with an increase in cattle supply. With excess domestic availability of pork products, the Pork segment experienced periods of challenging market conditions. Our Chicken segment also faced challenging market conditions associated with increased domestic availability of supply and higher feed ingredient costs. Our Prepared Foods segment continued its strong performance despite experiencing reduced volumes from the divestiture of certain non-protein businesses in fiscal 2018.
|
•
|
Margins – Our total operating margin was 7.9% in the first quarter of fiscal 2019. Operating margins by segment were as follows:
|
•
|
Beef – 7.8%
|
•
|
Pork – 8.1%
|
•
|
Chicken – 5.1%
|
•
|
Prepared Foods – 12.3%
|
•
|
Liquidity – We generated $868 million of operating cash flows during the three months of fiscal 2019. At December 29, 2018, we had approximately $1,414 million of liquidity, which included availability under our revolving credit facility after deducting amounts to backstop our commercial paper program and $400 million of cash and cash equivalents.
|
•
|
Strategy - Our strategy is to sustainably feed the world with the fastest growing protein brands. We intend to achieve our strategy as we: grow our business through differentiated capabilities; deliver ongoing financial discipline through continuous improvement; and sustain our company and our world for future generations.
|
•
|
On November 10, 2017, we acquired Original Philly, a valued added protein business. The results from operations of this business are included in the Prepared Foods and Chicken segments. On June 4, 2018, we acquired Tecumseh, a vertically integrated value-added protein business, and on August 20, 2018, we acquired American Proteins, a poultry rendering and blending operation as part of our strategic expansion and sustainability initiatives. The results from operations of these businesses are included in our Chicken segment. On November 30, 2018, we acquired Keystone Foods, our latest investment in furtherance of our growth strategy and expansion of our value-added protein capabilities. The results from operations of this business are included in the Chicken segment and Other. For further description of these transactions, refer to Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 2: Acquisitions and Dispositions.
|
•
|
On December 30, 2017, we completed the sale of our Kettle business, on July 30, 2018, we completed the sale of Sara Lee® Frozen Bakery and Van’s® businesses, and on September 2, 2018, we completed the sale of our TNT crust business, as part of our strategic focus on protein brands. All of these businesses were part of our Prepared Foods segment. For further description of these transactions, refer to Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 2: Acquisitions and Dispositions.
|
•
|
In the fourth quarter of fiscal 2017, our Board of Directors approved a multi-year restructuring program (the “Financial Fitness Program”), which is expected to contribute to the Company’s overall strategy of financial fitness through increased operational effectiveness and overhead reduction. Through a combination of synergies from the integration of business acquisitions and additional elimination of non-valued added costs, the program is focused on supply chain, procurement and overhead improvements, and net savings are expected to be realized in the Prepared Foods and Chicken segments. For further description refer to Part I, Item 1, Notes to the Consolidated Condensed Financial Statements, Note 5: Restructuring and Related Charges.
|
in millions, except per share data
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Net income attributable to Tyson
|
$
|
551
|
|
|
$
|
1,631
|
|
Net income attributable to Tyson – per diluted share
|
1.50
|
|
|
4.40
|
|
•
|
$26 million pretax, or ($0.06) per diluted share, of Keystone Foods purchase accounting and acquisition related costs, which included an $11 million purchase accounting adjustment for the amortization of the fair value step-up of inventory and $15 million of acquisition related costs.
|
•
|
$8 million pretax, or ($0.02) per diluted share, of restructuring and related charges.
|
•
|
$994 million post tax, or $2.68 per diluted share, tax benefit from remeasurement of net deferred tax liabilities at lower enacted tax rates.
|
•
|
$19 million pretax, or ($0.04) per diluted share, of restructuring and related charges.
|
•
|
$4 million pretax, or ($0.05) per diluted share, impairment net of realized gain associated with the divestiture of non-protein businesses.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Sales
|
$
|
10,193
|
|
|
$
|
10,229
|
|
Change in sales volume
|
3.3
|
%
|
|
|
|||
Change in average sales price
|
(3.7
|
)%
|
|
|
|||
Sales growth
|
(0.4
|
)%
|
|
|
•
|
Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $342 million primarily driven by incremental volumes from business acquisitions which impacted the Chicken segment and Other, partially offset by business divestitures in fiscal 2018 in our Prepared Foods segment.
|
•
|
Average Sales Price – Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $378 million. The Pork and Chicken segments had a decrease in average sales price as a result of decreased pricing associated with lower live hog costs in the Pork segment and product mix changes from fiscal 2018 acquisitions in our Chicken segment, partially offset by an increase in average sales price in the Beef and Prepared Foods segments attributable to strong export sales in the Beef segment and a more favorable product mix in our Prepared Foods segment.
|
•
|
The above amounts include a net increase of $199 million related to the inclusion of the Keystone Foods results post acquisition.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Cost of sales
|
$
|
8,838
|
|
|
$
|
8,786
|
|
Gross profit
|
$
|
1,355
|
|
|
$
|
1,443
|
|
Cost of sales as a percentage of sales
|
86.7
|
%
|
|
85.9
|
%
|
•
|
Cost of sales increased $52 million. Lower input cost per pound decreased cost of sales $241 million while higher sales volume increased cost of sales $293 million. These amounts include a net increase of $196 million related to the inclusion of Keystone Foods results from operations post acquisition, which also includes an $11 million purchase accounting adjustment for the fair value step-up of inventory.
|
•
|
The $241 million impact of lower input cost per pound was primarily driven by:
|
•
|
Decrease in live cattle costs of approximately $45 million in our Beef segment.
|
•
|
Decrease in live hog costs of approximately $20 million in our Pork segment.
|
•
|
Decrease due to net derivative losses of $5 million in the first quarter of fiscal 2019, compared to net derivative losses of $29 million in the first quarter of fiscal 2018 due to our risk management activities. These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed costs described above.
|
•
|
Increase of approximately $15 million in our Chicken segment related to net increases in feed ingredient costs, growout expenses and outside meat purchases.
|
•
|
Remaining decrease across all of our segments primarily driven by net impacts on average cost per pound from mix changes as well as from business acquisitions and divestitures.
|
•
|
The $293 million impact of higher sales volume was driven by an increase in sales volume in our Chicken segment, primarily due to acquisitions, partially offset by decreases in sales volume in our Beef, Pork, and Prepared Foods segments.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Selling, general and administrative expense
|
$
|
548
|
|
|
$
|
521
|
|
As a percentage of sales
|
5.4
|
%
|
|
5.1
|
%
|
•
|
Increase of $27 million in selling, general and administrative was primarily driven by:
|
•
|
Increase of $22 million related to the Keystone Foods acquisition.
|
•
|
Increase of $19 million in marketing, advertising, and promotion expenses.
|
•
|
Decrease of $11 million in restructuring and related charges.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Cash interest expense
|
$
|
102
|
|
|
$
|
89
|
|
Non-cash interest expense
|
(3
|
)
|
|
(1
|
)
|
||
Total interest expense
|
$
|
99
|
|
|
$
|
88
|
|
•
|
Cash interest expense primarily included interest expense related to our senior notes, term loans and commercial paper and commitment/letter of credit fees incurred on our revolving credit facility. The increase in cash interest expense in fiscal 2019 was primarily due to debt issued in connection with the Keystone Foods acquisition.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Total other (income) expense, net
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
•
|
Included $17 million of net periodic pension and postretirement benefit cost, which included $19 million of pension plan settlement cost, and $1 million in net foreign currency exchange losses. This was offset by $16 million of insurance proceeds and other income, and $5 million of equity earnings in joint ventures.
|
•
|
Included $3 million of equity earnings in joint ventures and $3 million in net foreign currency exchange losses. Also, included $5 million retrospective adjustment of net periodic pension and postretirement benefit credit, excluding the service cost component, in accordance with recently adopted accounting guidance.
|
|
Three Months Ended
|
||||
|
December 29, 2018
|
|
December 30, 2017
|
||
|
22.6
|
%
|
|
(93.8
|
)%
|
in millions
|
Sales
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Beef
|
$
|
3,926
|
|
|
$
|
3,886
|
|
Pork
|
1,179
|
|
|
1,283
|
|
||
Chicken
|
3,115
|
|
|
2,997
|
|
||
Prepared Foods
|
2,149
|
|
|
2,292
|
|
||
Other
|
143
|
|
|
88
|
|
||
Intersegment sales
|
(319
|
)
|
|
(317
|
)
|
||
Total
|
$
|
10,193
|
|
|
$
|
10,229
|
|
in millions
|
Operating Income (Loss)
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Beef
|
$
|
305
|
|
|
$
|
256
|
|
Pork
|
95
|
|
|
151
|
|
||
Chicken
|
160
|
|
|
272
|
|
||
Prepared Foods
|
265
|
|
|
256
|
|
||
Other
|
(18
|
)
|
|
(13
|
)
|
||
Total
|
$
|
807
|
|
|
$
|
922
|
|
in millions
|
Three Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Sales
|
$
|
3,926
|
|
|
$
|
3,886
|
|
|
$
|
40
|
|
Sales volume change
|
|
|
|
|
(0.9
|
)%
|
|||||
Average sales price change
|
|
|
|
|
1.9
|
%
|
|||||
Operating income
|
$
|
305
|
|
|
$
|
256
|
|
|
$
|
49
|
|
Operating margin
|
7.8
|
%
|
|
6.6
|
%
|
|
|
•
|
Sales Volume – Sales volume decreased due to a reduction in live cattle processed.
|
•
|
Average Sales Price – Average sales price increased as exports and demand for our beef products remained strong.
|
•
|
Operating Income – Operating income increased as we continued to maximize our revenues relative to live fed cattle costs, partially offset by increased operating and labor costs.
|
in millions
|
Three Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Sales
|
$
|
1,179
|
|
|
$
|
1,283
|
|
|
$
|
(104
|
)
|
Sales volume change
|
|
|
|
|
(3.6
|
)%
|
|||||
Average sales price change
|
|
|
|
|
(4.6
|
)%
|
|||||
Operating income
|
$
|
95
|
|
|
$
|
151
|
|
|
$
|
(56
|
)
|
Operating margin
|
8.1
|
%
|
|
11.8
|
%
|
|
|
•
|
Sales Volume – Sales volume decreased as a result of balancing our supply with customer demand during a period of margin compression.
|
•
|
Average Sales Price – The average sales price decrease was associated with lower livestock costs.
|
•
|
Operating Income – Operating income was strong, but lower than prior year results due to periods of compressed pork margins caused by excess domestic availability of pork and higher operating and labor costs.
|
in millions
|
Three Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Sales
|
$
|
3,115
|
|
|
$
|
2,997
|
|
|
$
|
118
|
|
Sales volume change
|
|
|
|
|
17.0
|
%
|
|||||
Average sales price change
|
|
|
|
|
(13.1
|
)%
|
|||||
Operating income
|
$
|
160
|
|
|
$
|
272
|
|
|
$
|
(112
|
)
|
Operating margin
|
5.1
|
%
|
|
9.1
|
%
|
|
|
•
|
Sales Volume – Sales volume increased primarily due to incremental volume from business acquisitions.
|
•
|
Average Sales Price – Average sales price decreased due to sales mix primarily associated with the acquisition of a poultry rendering and blending business in the fourth quarter of fiscal 2018.
|
•
|
Operating Income – Operating income decreased due to increased operating and labor costs, in addition to higher feed ingredient costs and current market conditions.
|
in millions
|
Three Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Sales
|
$
|
2,149
|
|
|
$
|
2,292
|
|
|
$
|
(143
|
)
|
Sales volume change
|
|
|
|
|
(12.9
|
)%
|
|||||
Average sales price change
|
|
|
|
|
6.7
|
%
|
|||||
Operating income
|
$
|
265
|
|
|
$
|
256
|
|
|
$
|
9
|
|
Operating margin
|
12.3
|
%
|
|
11.2
|
%
|
|
|
•
|
Sales Volume – Sales volume decreased primarily from business divestitures. Excluding the impact of the business divestitures, sales volumes increased slightly.
|
•
|
Average Sales Price – Average sales price increased due to product mix which was positively impacted by business divestitures.
|
•
|
Operating Income – Operating income increased due to strong demand for our products and improved product mix, partially offset by increased operating and labor costs.
|
in millions
|
Three Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Sales
|
$
|
143
|
|
|
$
|
88
|
|
|
$
|
55
|
|
Operating loss
|
$
|
(18
|
)
|
|
$
|
(13
|
)
|
|
$
|
(5
|
)
|
•
|
Sales – Sales increased in the first quarter of fiscal 2019 primarily from the Keystone Foods acquisition, partially offset from declines in our other foreign chicken production operations.
|
•
|
Operating Loss – Operating loss increased in the first quarter of fiscal 2019 primarily from third-party merger and integration costs.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Net income
|
$
|
552
|
|
|
$
|
1,632
|
|
Non-cash items in net income:
|
|
|
|
||||
Depreciation and amortization
|
250
|
|
|
229
|
|
||
Deferred income taxes
|
18
|
|
|
(967
|
)
|
||
Other, net
|
64
|
|
|
29
|
|
||
Net changes in operating assets and liabilities
|
(16
|
)
|
|
203
|
|
||
Net cash provided by operating activities
|
$
|
868
|
|
|
$
|
1,126
|
|
•
|
Deferred income taxes for the three months ended December 30, 2017, included a $994 million benefit related to remeasurement of net deferred income tax liabilities at newly enacted tax rates.
|
•
|
Other, net for the three months ended December 29, 2018, primarily included pension settlement costs of $19 million and deferred compensation unrealized losses of $20 million.
|
•
|
Cash flows associated with net changes in operating assets and liabilities for the three months ended:
|
•
|
December 29, 2018 – Decreased primarily due to increased accounts receivable and decreased accrued employee costs and other current assets and liabilities, offset by increased income taxes payable and accounts payable. The changes in these balances are largely due to the timing of sales and payments.
|
•
|
December 30, 2017 – Increased primarily due to decreased accounts receivable and increased income tax payable balances, partially offset by decreased accrued employee costs. The changes in these balances are largely due to the timing of sales and payments.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Additions to property, plant and equipment
|
$
|
(318
|
)
|
|
$
|
(296
|
)
|
(Purchases of)/Proceeds from marketable securities, net
|
—
|
|
|
(3
|
)
|
||
Acquisitions, net of cash acquired
|
(2,141
|
)
|
|
(226
|
)
|
||
Proceeds from sale of business
|
—
|
|
|
125
|
|
||
Other, net
|
10
|
|
|
(22
|
)
|
||
Net cash used for investing activities
|
$
|
(2,449
|
)
|
|
$
|
(422
|
)
|
•
|
Additions to property, plant and equipment included spending for production growth, safety and animal well-being, in addition to acquiring new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities. We expect capital spending for fiscal 2019 to approximate $1.4 billion to $1.5 billion.
|
•
|
Acquisitions, net of cash acquired, related to acquiring Keystone Foods in the first quarter of fiscal 2019 and Original Philly in the first quarter of fiscal 2018. For further description refer to Part I, Item I, Notes to the Consolidated Condensed Financial Statements, Note 2: Acquisitions and Dispositions.
|
•
|
Proceeds from sale of business related to the proceeds received from sale of our Kettle business in the first quarter of fiscal 2018. For further description refer to Part I, Item 1, Notes to the Consolidated Condensed Financial Statements, Note 2: Acquisitions and Dispositions.
|
in millions
|
Three Months Ended
|
||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||
Payments on debt
|
$
|
(12
|
)
|
|
$
|
(429
|
)
|
Proceeds from issuance of debt
|
1,807
|
|
|
—
|
|
||
Borrowings on revolving credit facility
|
—
|
|
|
655
|
|
||
Payments on revolving credit facility
|
—
|
|
|
(650
|
)
|
||
Proceeds from issuance of commercial paper
|
5,538
|
|
|
5,728
|
|
||
Repayments of commercial paper
|
(5,406
|
)
|
|
(5,824
|
)
|
||
Purchases of Tyson Class A common stock
|
(83
|
)
|
|
(164
|
)
|
||
Dividends
|
(134
|
)
|
|
(108
|
)
|
||
Stock options exercised
|
3
|
|
|
63
|
|
||
Other, net
|
(2
|
)
|
|
—
|
|
||
Net cash used for financing activities
|
$
|
1,711
|
|
|
$
|
(729
|
)
|
•
|
During the three months of fiscal 2019, we had proceeds of $1,807 million from issuance of debt, which primarily included proceeds from the issuance of a 364-day term loan for the initial financing of the Keystone Foods acquisition. On February 6, 2019, the Company announced it had reached a definitive agreement to acquire the Thai and European operations of BRF S.A. for $340 million in cash, subject to certain adjustments, with closing expected before the end of our fiscal third quarter 2019. Permanent financing of these acquisitions are expected to include issuance of senior notes.
|
•
|
During the three months of fiscal 2018, we extinguished the $427 million outstanding balance of the Term Loan Tranche B due in August 2019 using cash on hand and proceeds received from the sale of a non-protein business. Additionally, we had net borrowings on our revolver of $5 million. We utilized our revolving credit facility for general corporate purposes.
|
•
|
During the three months of fiscal 2019 and 2018, we had net issuances of $132 million and net repayments of $96 million, respectively, in unsecured short-term promissory notes (commercial paper) pursuant to our commercial paper program.
|
•
|
Purchases of Tyson Class A stock included:
|
•
|
$50 million and $120 million of shares repurchased pursuant to our share repurchase program during the three months ended December 29, 2018, and December 30, 2017, respectively.
|
•
|
$33 million and $44 million of shares repurchased to fund certain obligations under our equity compensation programs during the three months ended December 29, 2018, and December 30, 2017, respectively.
|
•
|
Dividends paid during the three months of fiscal 2019 included a 25% increase to our fiscal 2018 quarterly dividend rate.
|
in millions
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commitments
Expiration Date
|
|
Facility
Amount
|
|
|
Outstanding
Letters of Credit
(no draw downs)
|
|
|
Amount
Borrowed
|
|
|
Amount
Available at
December 29, 2018
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
$
|
400
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
|
|
1
|
|
|||||||
Revolving credit facility
|
March 2023
|
|
$
|
1,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1,750
|
|
|
Commercial paper
|
|
|
|
|
|
|
|
|
(737
|
)
|
|||||||
Total liquidity
|
|
|
|
|
|
|
|
|
$
|
1,414
|
|
•
|
Liquidity includes cash and cash equivalents, short-term investments, and availability under our revolving credit facility, less outstanding commercial paper balance.
|
•
|
At December 29, 2018, we had current debt of $3,917 million, which we intend to repay with cash generated from our operating activities and other liquidity sources including issuance of senior notes as permanent financing of the Keystone Foods acquisition.
|
•
|
The revolving credit facility supports our short-term funding needs and also serves to backstop our commercial paper program. We had no borrowings under the revolving credit facility at December 29, 2018.
|
•
|
We expect net interest expense to approximate $450 million for fiscal 2019.
|
•
|
At December 29, 2018, approximately $383 million of our cash was held in the international accounts of our foreign subsidiaries. Generally, we do not rely on the foreign cash as a source of funds to support our ongoing domestic liquidity needs. We manage our worldwide cash requirements by reviewing available funds among our foreign subsidiaries and the cost effectiveness with which those funds can be accessed. We intend to repatriate excess cash (net of applicable withholding taxes) not subject to regulatory requirements and to indefinitely reinvest outside of the United States the remainder of cash held by foreign subsidiaries. We do not expect the regulatory restrictions or taxes on repatriation to have a material effect on our overall liquidity, financial condition or the results of operations for the foreseeable future.
|
•
|
Our current ratio was 0.85 to 1 and 1.13 to 1 at December 29, 2018, and September 29, 2018, respectively. The decrease in fiscal 2019 is primarily due to the increased balance of current debt.
|
Ratings Level (S&P/Moody's/Fitch)
|
Borrowing Spread-
through 179 days after Borrowing Date
|
|
A-/A3/A- or higher
|
0.875
|
%
|
BBB+/Baa1/BBB+
|
1.000
|
%
|
BBB/Baa2/BBB (current level)
|
1.125
|
%
|
BBB-/Baa3/BBB-
|
1.375
|
%
|
BB+/Ba1/BB+
|
1.625
|
%
|
Ratings Level (S&P/Moody's/Fitch)
|
Facility Fee
Rate
|
|
All-in Borrowing Spread
|
|
A-/A3/A- or above
|
0.090
|
%
|
1.000
|
%
|
BBB+/Baa1/BBB+
|
0.100
|
%
|
1.125
|
%
|
BBB/Baa2/BBB (current level)
|
0.125
|
%
|
1.250
|
%
|
BBB-/Baa3/BBB-
|
0.175
|
%
|
1.375
|
%
|
BB+/Ba1/BB+ or lower
|
0.225
|
%
|
1.625
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Effect of 10% change in fair value
|
|
|
in millions
|
|
|||
|
December 29, 2018
|
|
September 29, 2018
|
||||
Livestock:
|
|
|
|
||||
Live Cattle
|
$
|
29
|
|
|
$
|
12
|
|
Lean Hogs
|
9
|
|
|
4
|
|
||
Grain:
|
|
|
|
||||
Corn
|
27
|
|
|
26
|
|
||
Soy Meal
|
33
|
|
|
26
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
Twelve Months Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
September 29, 2018
|
December 29, 2018
|
||||||||
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
552
|
|
|
$
|
1,632
|
|
|
$
|
3,027
|
|
$
|
1,947
|
|
Less: Interest income
|
(2
|
)
|
|
(2
|
)
|
|
(7
|
)
|
(7
|
)
|
||||
Add: Interest expense
|
99
|
|
|
88
|
|
|
350
|
|
361
|
|
||||
Add: Income tax (benefit) expense
|
161
|
|
|
(790
|
)
|
|
(282
|
)
|
669
|
|
||||
Add: Depreciation
|
184
|
|
|
175
|
|
|
723
|
|
732
|
|
||||
Add: Amortization (a)
|
63
|
|
|
51
|
|
|
210
|
|
222
|
|
||||
EBITDA
|
$
|
1,057
|
|
|
$
|
1,154
|
|
|
$
|
4,021
|
|
$
|
3,924
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||
Total gross debt
|
|
|
|
|
$
|
9,873
|
|
$
|
11,992
|
|
||||
Less: Cash and cash equivalents
|
|
|
|
|
(270
|
)
|
(400
|
)
|
||||||
Less: Short-term investments
|
|
|
|
|
(1
|
)
|
(1
|
)
|
||||||
Total net debt
|
|
|
|
|
$
|
9,602
|
|
$
|
11,591
|
|
||||
|
|
|
|
|
|
|
||||||||
Ratio Calculations:
|
|
|
|
|
|
|
||||||||
Gross debt/EBITDA
|
|
|
|
|
2.5x
|
|
3.1x
|
|
||||||
Net debt/EBITDA
|
|
|
|
|
2.4x
|
|
3.0x
|
|
(a)
|
Excludes the amortization of debt issuance and debt discount expense of $3 million for the three months ended December 29, 2018, and December 30, 2017, and $10 million for the fiscal year ended September 29, 2018, and for the twelve months ended December 29, 2018, as it is included in interest expense.
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total
Number of
Shares
Purchased
|
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the Plans
or Programs (1)
|
|
|
Sept. 30, 2018 to Oct. 27, 2018
|
41,204
|
|
|
$
|
60.79
|
|
—
|
|
|
22,946,173
|
|
Oct. 28, 2018 to Dec. 1, 2018
|
486,764
|
|
|
60.15
|
|
—
|
|
|
22,946,173
|
|
|
Dec. 2, 2018 to Dec. 29, 2018
|
919,984
|
|
|
55.83
|
|
895,338
|
|
|
22,050,835
|
|
|
Total
|
1,447,952
|
|
(2)
|
$
|
57.42
|
|
895,338
|
|
(3)
|
22,050,835
|
|
(1)
|
On February 7, 2003, we announced our Board of Directors approved a program to repurchase up to 25 million shares of Class A common stock from time to time in open market or privately negotiated transactions. On May 3, 2012, our Board of Directors approved an increase of 35 million shares, on January 30, 2014, our Board of Directors approved an increase of 25 million shares and, on February 4, 2016, our Board of Directors approved an increase of 50 million shares, authorized for repurchase under our share repurchase program. The program has no fixed or scheduled termination date.
|
(2)
|
We purchased 552,614 shares during the period that were not made pursuant to our previously announced stock repurchase program, but were purchased to fund certain Company obligations under our equity compensation plans. These transactions included 86,421 shares purchased in open market transactions and 466,193 shares withheld to cover required tax withholdings on the vesting of restricted stock.
|
(3)
|
These shares were purchased during the period pursuant to our previously announced stock repurchase program.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
Exhibit Description
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
*
|
|
|
|
|
10.3
|
*
|
|
|
|
|
10.4
|
*
|
|
|
|
|
10.5
|
*
|
|
|
|
|
10.6
|
*
|
|
|
|
|
10.7
|
*
|
|
|
|
|
10.8
|
*
|
|
|
|
|
10.9
|
*
|
|
|
|
|
10.10
|
*
|
|
|
|
|
10.11
|
*
|
|
|
|
|
10.12
|
*
|
|
|
|
|
10.13
|
*
|
|
|
|
|
10.14
|
*
|
|
|
|
|
10.15
|
*
|
|
|
|
|
10.16
|
*
|
|
|
|
|
10.17
|
*
|
|
|
|
|
10.18
|
*
|
|
|
|
|
10.19
|
*
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
TYSON FOODS, INC.
|
|
|
|
|
|
|
|
|
|
Date: February 7, 2019
|
|
|
/s/ Stewart Glendinning
|
|
|
|
Stewart Glendinning
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
Date: February 7, 2019
|
|
|
/s/ Steve Gibbs
|
|
|
|
Steve Gibbs
|
|
|
|
Senior Vice President, Controller and Chief Accounting Officer
|
Award:
|
Quantity Granted Performance Shares
|
1.
|
Terms and Conditions. The Award of Performance Shares (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, the following terms shall have the meanings as set forth below:
|
2.1.
|
“Award” means the unfunded promise to deliver to you all or a portion of the Performance Shares (or, if applicable, substitute consideration) upon meeting the applicable vesting and performance measures set forth in this Award Agreement.
|
2.2.
|
"Cause," "Disability," “Good Reason,” and "Release" shall have the same meanings as set forth in your employment agreement with Tyson in effect at the time of this Award (the “Employment Agreement”).
|
2.3.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity; provided such event also constitutes a “change in the ownership of a corporation” or a “change in the effective control of a corporation” within the meaning of Code Section 409A.
|
2.4.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.5.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.6.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.7.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to the Final Measurement Date.
|
2.8.
|
“Operating Income” shall mean Tyson's GAAP operating income, as adjusted for significant impairments, restructuring and related charges, purchase accounting and acquisition related costs, merger and integration costs, and gains and losses associated with the sale or closure operations and other extraordinary items, in the reasonable discretion of the Compensation and Leadership Development Committee.
|
2.9.
|
“Operating Income Goal” for the Measurement Period shall be a cumulative Operating Income of $9,986,000,000.00
|
2.10.
|
“Performance Shares” shall mean the shares of Tyson's Class A common stock (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted) subject to this Award Agreement.
|
2.11.
|
“Retirement” shall mean your voluntary Termination of Employment from Tyson and/or its affiliates on or after the date you attain age 62.
|
2.12.
|
“Termination of Employment” shall have the meaning ascribed to the term “Separation from Service” in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.13.
|
“Tyson” shall mean Tyson Foods, Inc. or any successor thereto.
|
2.14.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.15.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. Any Award which has become payable pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy any of the performance measures provided in Section 4.
|
3.2.
|
Death, Disability or Retirement. In the event your Termination of Employment is due to death, Disability or Retirement before the Vesting Date, you will be entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied. The pro rata portion of the Award shall be determined by multiplying the amount of the Award that you would have received had you remained employed until the Vesting Date by a fraction, the numerator of which is number of days during which you remained employed by Tyson and/or its affiliates from the Grant Date and the denominator of which is the total number of days in the Vesting Period. Notwithstanding the foregoing, if there is a Change in Control prior to the Final Measurement Date, payment of the Award will be based on performance at the level determined in accordance with the provisions of Section 3.4.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason. In the event of your Termination of Employment by Tyson other than for Cause or by you for Good Reason before the Vesting Date, you will become entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied contingent upon your timely execution and non-revocation of a Release. The pro rata portion of the Award shall by determined by multiplying the amount of the Award that you would have received had you remained employed until the Vesting Date by a fraction, the numerator of which is number of days during which you remained employed by Tyson and/or its affiliates from the Grant Date and the denominator of which is the total number of days in the Vesting Period. Notwithstanding the foregoing, if there is a Change in Control prior to the Final
|
3.4.
|
Change in Control. Following a Change in Control that occurs during the Measurement Period, the requirement that you not experience a Termination of Employment prior to the Vesting Date will be excused upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (but prior to the last day of the Measurement Period): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. If vested, you will be entitled to payment of the Award pursuant to this Section 3.4 based on whichever of the following produces the greater result: (x) the target level of performance set forth in Section 4(iii), or (y) the actual level of performance determined as of the effective date of the Change in Control, with such actual level measured against the performance benchmarks set forth in Section 4 as adjusted on a pro-rata basis to reflect the period of time elapsed between the Initial Measurement Date and the effective date of the Change in Control (with such proration consideration being for the determination of actual results only, as the Award itself will not be prorated in the event payment is commenced under this Section 3.4).
|
4.
|
Performance Measures. The extent, if any, to which you shall have the right to payment of the Award shall depend upon your satisfying one of the continuous employment conditions set forth in Section 3 and the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date, as specified below:
|
5.
|
Payment of Award. The Performance Shares that may become payable pursuant to this Award Agreement shall be based upon the highest performance determined in accordance with the provisions of Section 4 or, in the event of a Change in Control prior to the Final Measurement Date, based on performance at the level determined in accordance with the provisions of Section 3.4. In other words, the attainment of multiple performance measures under this Award Agreement will not result in the payment of a cumulative number of Performance Shares for each performance measure achieved. Payment of the Award, to the extent earned, shall be made as follows:
|
5.1
|
Prior to a Change in Control. If the Final Measurement Date occurs prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock no later than seventy (70) days after the Final Measurement Date.
|
5.2
|
On and After a Change in Control. If a Change in Control occurs on or prior to the Final Measurement Date, payment of the Award, to the extent earned, will be made no later than seventy (70) days after the later of the effective date of the Change in Control or your Termination of Employment. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
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6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
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7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you
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8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
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9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
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10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
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11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
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12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
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13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
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14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not confer a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
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15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason in accordance with the terms of your Employment Agreement.
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16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to
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17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
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18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. To the extent applicable, references to Tyson herein shall be deemed to include a reference any such successor. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
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19.
|
Section 409A. It is the intent of Tyson that any payment pursuant to the Award be exempt from Code Section 409A, to the maximum extent permitted. However, if any such payment is considered to be “nonqualified deferred compensation” subject to Code Section 409A, such payment will be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Code Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. To the extent that some portion of any payment under this Award may be bifurcated and treated as exempt from Code Section 409A under the “short-term deferral” or “separation pay” exemptions, then such amounts may be so treated as exempt.
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Award:
|
Quantity Granted Performance Shares
|
1.
|
Terms and Conditions. The Award of Performance Shares (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
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2.
|
Definitions. For purposes of this Award Agreement, the following terms shall have the meanings as set forth below:
|
2.1.
|
“Award” means the unfunded promise to deliver to you all or a portion of the Performance Shares (or, if applicable, substitute consideration) upon meeting the applicable vesting and performance measures set forth in this Award Agreement.
|
2.2.
|
“Cause” is defined as a Termination of Employment as a result of the occurrence of one or more of the following events:
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(a)
|
Job-related misconduct or non-performance of duties;
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(b)
|
Violation of the policies of Tyson (including a violation of the Code of Conduct);
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(c)
|
Any willful and wrongful conduct or omission by you that injures Tyson;
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(d)
|
Any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
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(e)
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You are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
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(f)
|
Your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
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2.3.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity; provided such event also constitutes
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2.4.
|
“Disability” shall have the same meaning as provided in the long-term disability plan or policy maintained or, if applicable, most recently maintained, by Tyson. If no long-term disability plan or policy was ever maintained on your behalf or, if the determination of Disability relates to an incentive stock option, Disability means that condition described in Section 22(e)(3) of the Internal Revenue Code (the “Code”), as amended, or any successors thereto, and any regulations or rulings issued thereunder. In the event of a dispute, the determination of Disability will be made by the Committee (as defined in the Plan) and will be supported by the advice of a physician competent in the area to which such Disability relates.
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2.5.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
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2.6.
|
“Good Reason” is defined as the occurrence of any one or more of the following actions or events without your written consent; provided that you may not rely on any particular action or event as a basis for terminating your employment for Good Reason unless you deliver a Notice of Good Reason based on that action or event within thirty (30) days of its initial occurrence and Tyson has failed to correct the circumstances cited by you as constituting Good Reason within thirty (30) days of such Notice of Good Reason and you resign within thirty (30) days following such failure:
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(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
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(b)
|
Greater than a fifteen (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
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(c)
|
Transfer of your primary employment location beyond fifty (50) miles; or
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(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control.
|
2.7.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.8.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.9.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to the Final Measurement Date.
|
2.10.
|
“Operating Income” shall mean Tyson's GAAP operating income, as adjusted for significant impairments, restructuring and related charges, purchase accounting and acquisition related costs, merger and integration costs, and gains and losses associated with the sale or closure operations and other extraordinary items, in the reasonable discretion of the Compensation and Leadership Development Committee.
|
2.11.
|
“Operating Income Goal” for the Measurement Period shall be a cumulative Operating Income of $9,986,000,000.00.
|
2.12.
|
“Performance Shares” shall mean the shares of Tyson's Class A common stock (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted) subject to this Award Agreement.
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2.13.
|
“Release” shall mean that specific document which Tyson shall present to you for consideration and execution after your Termination of Employment, under which you agree to irrevocably and unconditionally release and forever discharge Tyson, its subsidiaries, affiliates and related parties from any and all causes of action which you at that time had or may have had against Tyson and its subsidiaries, affiliates and related parties (excluding any claim under state workers’ compensation or unemployment laws). The Release will be provided to you as soon as practicable after your termination date, but in any event in sufficient time so that you will have adequate time to review the Release as provided by applicable law.
|
2.14.
|
“Termination of Employment” shall have the meaning ascribed to the term “Separation from Service” in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.15.
|
“Tyson” shall mean Tyson Foods, Inc. or any successor thereto.
|
2.16.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.17.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. Any Award which has become payable pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy any of the performance measures provided in Section 4.
|
3.2.
|
Death or Disability. In the event your Termination of Employment is due to death or Disability before the Vesting Date, you will be entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied. The pro rata portion of the Award shall be determined by multiplying the amount of the Award that you would have received had you remained employed until the Vesting Date by a fraction, the numerator of which is number of days during which you remained employed by Tyson and/or its affiliates from the Grant Date and the denominator of which is the total number of days in the Vesting Period. Notwithstanding the foregoing, if there is a Change in Control prior to the Final Measurement Date, payment of the Award will be based on performance at the level determined in accordance with the provisions of Section 3.4.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason; Voluntary Termination by you under the “5+1” Officer Separation Program. In the event of your Termination of Employment by Tyson other than for Cause or by you for Good Reason or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc. before the Vesting Date, you will become entitled to a pro rata portion of the Award if the applicable
|
3.4.
|
Change in Control. Following a Change in Control that occurs during the Measurement Period, the requirement that you not experience a Termination of Employment prior to the Vesting Date will be excused upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (but prior to the last day of the Measurement Period): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. If vested, you will be entitled to payment of the Award pursuant to this Section 3.4 based on whichever of the following produces the greater result: (x) the target level of performance set forth in Section 4(iii), or (y) the actual level of performance determined as of the effective date of the Change in Control, with such actual level measured against the performance benchmarks set forth in Section 4 as adjusted on a pro-rata basis to reflect the period of time elapsed between the Initial Measurement Date and the effective date of the Change in Control (with such proration consideration being for the determination of actual results only, as the Award itself will not be prorated in the event payment is commenced under this Section 3.4).
|
4.
|
Performance Measures. The extent, if any, to which you shall have the right to payment of the Award shall depend upon your satisfying one of the continuous employment conditions set forth in Section 3 and the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date, as specified below:
|
5.
|
Payment of Award. The Performance Shares that may become payable pursuant to this Award Agreement shall be based upon the highest performance determined in accordance with the provisions of Section 4 or, in the event of a Change in Control prior to the Final Measurement Date, based on performance at the level determined in accordance with the provisions of Section 3.4. In other words, the attainment of multiple performance measures under this Award Agreement will not result in the payment of a cumulative number of Performance Shares for each performance measure achieved. Payment of the Award, to the extent earned, shall be made as follows:
|
5.1
|
Prior to a Change in Control. If the Final Measurement Date occurs prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock no later than seventy (70) days after the Final Measurement Date.
|
5.2
|
On and After a Change in Control. If a Change in Control occurs on or prior to the Final Measurement Date, payment of the Award, to the extent earned, will be made no later than seventy (70) days after the later of the effective date of the Change in Control or your Termination of Employment. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not confer a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. To the extent applicable, references to Tyson herein shall be deemed to include a reference any such successor. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
19.
|
Section 409A. It is the intent of Tyson that any payment pursuant to the Award be exempt from Code Section 409A, to the maximum extent permitted. However, if any such payment is considered to be “nonqualified deferred compensation” subject to Code Section 409A, such payment will be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Code Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. To the extent that some portion of any payment under this Award may be bifurcated and treated as exempt from Code Section 409A under the “short-term deferral” or “separation pay” exemptions, then such amounts may be so treated as exempt.
|
Award:
|
Quantity Granted Shares of Restricted Stock
|
Grant Date:
|
November 19, 2018
|
1.
|
Terms and Conditions. The Award of Restricted Stock Subject to Performance Criteria (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Disability”, “Good Reason”, and “Release” shall have the same meanings as set forth in your Employment Agreement, and the following terms shall have the meanings as set forth below:
|
2.1.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity.
|
2.2.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.3.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.4.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.5.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to (i) the Final Measurement Date or (ii) the date of your Termination of Employment pursuant to Section 3.2 or 3.3.
|
2.6.
|
“Operating Income” shall mean Tyson's GAAP operating income, as adjusted for significant impairments, restructuring and related charges, purchase accounting and acquisition related costs, merger and integration costs, and gains and losses associated with the sale or closure operations and other extraordinary items, in the reasonable discretion of the Compensation and Leadership Development Committee.
|
2.7.
|
“Operating Income Goal” for the Measurement Period shall be a cumulative Operating Income of $125,000,000.00.
|
2.8.
|
"Restricted Stock" means the shares of Tyson's Class A common stock subject to this Award Agreement.
|
2.9.
|
“Retirement” shall mean your voluntary Termination of Employment from Tyson on or after the later of the first anniversary of the Grant Date or the date you attain age sixty-two (62).
|
2.10.
|
“Termination of Employment” shall have the meaning ascribed to it in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.11.
|
“Tyson” shall mean Tyson Foods, Inc., or any successor thereto.
|
2.12.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.13.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. The Award which becomes vested pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy the performance measures provided in Section 4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death, Disability or Retirement. In the event of your Termination of Employment due to death, Disability or Retirement before the Vesting Date, the Measurement Period will end on the date your employment is terminated and you will be entitled to the Award without any proration if the performance measures set forth in Section 4 are on track to be satisfied (e.g., on a run rate basis) as of the date of your termination.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason. In the event of your Termination of Employment before the Vesting Date by Tyson for reasons other than for Cause or by you for Good Reason before the Vesting Date, and subject to your timely execution and non-revocation of a Release, the Measurement Period will end on the date your employment is terminated, and you will become entitled to a pro rata portion of the Award if the performance measures set forth in Section 4 are on track to be satisfied (e.g., on a run rate basis) as of the date of your termination. The pro rata portion of the Award in which you will become earned and vested will be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period ending in the Vesting Date. Notwithstanding the foregoing, in the event of your Termination of Employment by Tyson for reasons other than for Cause or by you for Good Reason on or after the later of the first anniversary of the Grant Date or the date you attain age 62, you will be fully vested in the Award subject to your timely execution and non-revocation of a Release.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes vested, you will become fully vested in the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason.
|
4.
|
Performance Measure. The extent, if any, to which you shall have the right to the restricted shares subject to the Award also depends upon the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date or the date of your Termination of Employment, as applicable, as specified below:
|
5.
|
Delivery of Shares. To the extent the Award becomes vested and earned, it will be settled by the delivery to you of shares no longer subject to forfeiture restrictions as soon as administratively practicable following the Vesting Date or Vesting Event, as applicable, set forth in Section 3 as follows:
|
5.1
|
Prior to a Change in Control. If the Award is settled prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock.
|
5.2
|
On and After a Change in Control. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If the Award is settled on or after a Change in Control and Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash , as the Committee may determine in its sole discretion.
|
6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
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7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
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8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
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9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award
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10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
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11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
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12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
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13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
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14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
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15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason in accordance with the terms of your Employment Agreement.
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16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
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17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Quantity Granted Shares of Restricted Stock
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Grant Date:
|
November 19, 2018
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1.
|
Terms and Conditions. The Award of Restricted Stock Subject to Performance Criteria (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
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2.
|
Definitions. For purposes of this Award Agreement, the following terms shall have the meanings as set forth below:
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2.1.
|
“Cause” is defined as a Termination of Employment as a result of the occurrence of one or more of the following events:
|
(b)
|
Violation of the policies of Tyson (including a violation of the Code of Conduct);
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(d)
|
Any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
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(e)
|
You are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
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(f)
|
Your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
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2.2.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity.
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2.3.
|
“Disability” shall have the same meaning as provided in the long-term disability plan or policy maintained or, if applicable, most recently maintained, by Tyson. If no long-term disability plan or policy was ever maintained on your behalf or, if the determination of Disability relates to an incentive stock option, Disability means that condition described in Section 22(e)(3) of the Internal Revenue Code (the “Code”), as amended, or any successors thereto, and any regulations or rulings issued thereunder. In the event of a dispute, the determination of Disability will be made by the
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2.4.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
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2.5.
|
“Good Reason” is defined as the occurrence of any one or more of the following actions or events without your written consent; provided that you may not rely on any particular action or event as a basis for terminating your employment for Good Reason unless you deliver a Notice of Good Reason based on that action or event within thirty (30) days of its initial occurrence and Tyson (or its successors) has failed to correct the circumstances cited by you as constituting Good Reason within thirty (30) days of such Notice of Good Reason and you resign within thirty (30) days of such failure:
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(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
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(b)
|
Greater than a fifteen (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson Foods in its sole discretion;
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(c)
|
Transfer of your primary employment location beyond fifty (50) miles; or
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(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control.
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2.6.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.7.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.8.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to (i) the Final Measurement Date or (ii) the date of your Termination of Employment pursuant to Section 3.2 or 3.3.
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2.9.
|
“Operating Income” shall mean Tyson's GAAP operating income, as adjusted for significant impairments, restructuring and related charges, purchase accounting and acquisition related costs, merger and integration costs, and gains and losses associated with the sale or closure operations and other extraordinary items, in the reasonable discretion of the Compensation and Leadership Development Committee.
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2.10.
|
“Operating Income Goal” for the Measurement Period shall be a cumulative Operating Income of $125,000,000.00.
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2.11.
|
“Release” shall mean that specific document which Tyson shall present to you for consideration and execution after your Termination of Employment, under which you agree to irrevocably and unconditionally release and forever discharge Tyson, its subsidiaries, affiliates and related parties from any and all causes of action which you at that time had or may have had against Tyson and its subsidiaries, affiliates and related parties (excluding any claim under state workers’ compensation or unemployment laws). The Release will be provided to you as soon as practicable after your termination date, but in any event in sufficient time so that you will have adequate time to review the Release as provided by applicable law.
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2.12.
|
"Restricted Stock" means the shares of Tyson's Class A common stock subject to this Award Agreement.
|
2.13.
|
“Termination of Employment” shall have the meaning ascribed to it in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.14.
|
“Tyson” shall mean Tyson Foods, Inc., or any successor thereto.
|
2.15.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.16.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. The Award which becomes vested pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy the performance measures provided in Section 4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death or Disability. In the event of your Termination of Employment due to death or Disability before the Vesting Date, the Measurement Period will end on the date your employment is terminated and you will be entitled to a pro rata portion of the Award if the performance measures set forth in Section 4 are on track to be satisfied (e.g., on a run rate basis) as of the date of your termination. The pro rata portion of the Award in which you will become earned and vested will be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period ending in the Vesting Date.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason; Voluntary Termination under the “5+1” Officer Separation Program. In the event of your Termination of Employment before the Vesting Date by Tyson for reasons other than for Cause; or by you for Good Reason or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc. before the Vesting Date, and subject to your timely execution and non-revocation of a Release, the Measurement Period will end on the date your employment is terminated, and you will become entitled to a pro rata portion of the Award if the performance measures set forth in Section 4 are on track to be satisfied (e.g., on a run rate basis) as of the date of your termination. The pro rata portion of the Award in which you will become earned and vested will be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period ending in the Vesting Date.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes vested, you will become fully vested in the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason.
|
4.
|
Performance Measure. The extent, if any, to which you shall have the right to the restricted shares subject to the Award also depends upon the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date or the date of your Termination of Employment, as applicable, as specified below:
|
5.
|
Delivery of Shares. To the extent the Award becomes vested and earned, it will be settled by the delivery to you of shares no longer subject to forfeiture restrictions as soon as administratively practicable following the Vesting Date or Vesting Event, as applicable, set forth in Section 3 as follows:
|
5.1
|
Prior to a Change in Control. If the Award is settled prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock.
|
5.2
|
On and After a Change in Control. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If the Award is settled on or after a Change in Control and Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash , as the Committee may determine in its sole discretion.
|
6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Option to Purchase Quantity Granted Shares
|
Term:
|
Earlier of (i) ten (10) years; or (ii) dates set forth in Section 4
|
Vesting Date
|
Percent of Award Vested
|
November 19, 2019
November 19, 2020
November 19, 2021
|
33 1/3 %
33 1/3 %
33 1/3 %
|
1.
|
Terms and Conditions. The Award of Stock Options (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Disability”, “Good Reason”, and “Release” shall have the same meanings as set forth in your Employment Agreement, and “Change in Control”, “Retirement”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned and exercisable by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death, Disability or Retirement. In the event your employment with Tyson is terminated due to death, Disability or Retirement before the Award is vested in full, you will be fully vested in the Award.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason. In the event of your Termination of Employment by Tyson for reasons other than for Cause or by you for Good Reason before the Award is vested in full, you will be fully vested in the Award contingent upon your timely execution and non-revocation of a Release.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes fully vested, you will become fully vested in the unvested portion of the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-
|
4.
|
Time of Exercise of Award. The Award will be exercisable upon the Vesting Dates and/or Vesting Events set forth in Section 3. In the event of your Termination of Employment, your vested options shall no longer remain exercisable, except as follows:
|
4.1.
|
Termination of Employment. Except as provided in Section 4.2, in the event of your Termination of Employment, your vested Award will remain exercisable for a period of three (3) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
4.2.
|
Death, Disability or Retirement; Termination by Tyson without Cause or by you for Good Reason. In the event your Termination of Employment is due to death, Disability or Retirement, or is effected by Tyson without Cause or by you for Good Reason, your vested Award will remain exercisable by you, or your Beneficiary in the case of your death, for a period of twelve (12) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
5.
|
Manner of Exercise of Award. The Award may be exercised through any of the following methods as provided under the Plan:
|
5.1.
|
Cash of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.2.
|
Delivery to Tyson of the number of shares owned at least six (6) months at the time of exercise having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.3.
|
Cashless exercise through a broker designated by Tyson, which shall account for, and include, any required tax withholding but not to exceed the required minimum statutory withholding;
|
5.4.
|
Withholding of the number of shares having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding but not to exceed the required minimum statutory withholding; or
|
5.5.
|
Unless the Award is no longer exercisable under the terms of Section 4 above, by accepting the terms herein you consent to have the options automatically exercise, using any of the above methods at Tyson’s sole discretion, either at the end of the period defined in Section 4.1 or Section 4.2, as applicable, or, if earlier, on the tenth (10th) anniversary of the Grant Date (or, if the 10th anniversary of the Grant Date is not a business day, the business day immediately preceding the 10th anniversary of the Grant Date), if the price per share of Tyson stock at the time of exercise is greater than the Exercise Price.
|
6.
|
Withholding Taxes. By executing this Award Agreement and accepting this Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Beneficiary Designation. In accordance with the terms of the Plan, you may name a Beneficiary who may exercise the Award under this Award Agreement in case of your death before you receive any or all of the Award. Each Beneficiary designation shall revoke all prior designations, shall be in a form prescribed by the Committee, and shall be effective only when filed in writing with the Committee during your lifetime.
|
9.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
10.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
11.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the provisions of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
12.
|
Restrictions on Transfer of Award. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
13.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
14.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
15.
|
No Vested Right in Future Awards. You acknowledge and agree by executing this Award Agreement that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
16.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason in accordance with the terms of your Employment Agreement.
|
17.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
18.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
19.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Quantity Granted Shares of Restricted Stock
|
Vesting Date
|
Percent of Award Vested
|
November 19, 2021
|
100%
|
1.
|
Terms and Conditions. The Award of Restricted Stock (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Disability”, “Good Reason”, and “Release” shall have the same meanings as set forth in your Employment Agreement, and “Change in Control”, “Retirement”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding
|
3.2.
|
Death, Disability or Retirement. In the event of your Termination of Employment due to death, Disability or Retirement before the Vesting Date, you will be fully vested in the Award.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason. In the event of your Termination of Employment by Tyson for reasons other than for Cause or by you for Good Reason, you will become vested in a pro rata portion of the Award subject to your timely execution and non-revocation of a Release. The pro rata portion of the Award shall be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period. Notwithstanding the foregoing, in the event of your Termination of Employment by Tyson for reasons other than for Cause or by you for Good Reason on or after the later of the first anniversary of the Grant Date or the date you attain age 62, you will be fully vested in the Award subject to your timely execution and non-revocation of a Release.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes vested, you will become fully vested in the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason.
|
4.
|
Delivery of Shares. To the extent the Award becomes vested and earned, it will be settled by the delivery to you of shares no longer subject to forfeiture restrictions as soon as administratively practicable following the Vesting Date or Vesting Event, as applicable, set forth in Section 3 as follows.
|
4.1.
|
Prior to a Change in Control. If the Award is settled prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock.
|
4.2
|
On and After a Change in Control. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If the Award is settled on or after a Change in Control and Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
5.
|
Withholding Taxes. By executing this Award Agreement and accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
6.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such
|
7.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
8.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
9.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
10.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 4. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
11.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
12.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
13.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
14.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason in accordance with the terms of your Employment Agreement.
|
15.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
16.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
17.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Team Member:
|
«Name»
|
|
|
Award:
|
[Target Quantity Granted] Performance Shares
|
|
|
Grant Date
|
November 17, 2017
|
|
|
Initial Measurement Date:
|
October 1, 2017
|
|
|
Final Measurement Date:
|
October 3, 2020
|
|
|
Vesting Date:
|
November 20, 2020
|
1.
|
Terms and Conditions. The Award of Restricted Stock (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Change in Control”, “Disability”, “Good Reason”, “Release”, “Retirement”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
(b)
|
Violation of the policies of Tyson (including a violation of the Code of Conduct);
|
(c)
|
Any willful and wrongful conduct or omission by you that injures Tyson;
|
(d)
|
Any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(e)
|
You are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
|
(f)
|
Your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
|
(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
|
(b)
|
Greater than a fifteen percent (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
|
(c)
|
Transfer of your primary employment location beyond fifty (50) miles;
|
(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control; or
|
(e)
|
Any action or event described in the above clauses (a)-(c) taken by Tyson prior to a Change in Control at the request of the other party to the Change in Control transaction or otherwise in contemplation of the closing of a Change in Control transaction.
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death, Disability or Retirement. In the event of your Termination of Employment due to death, Disability or Retirement before the Vesting Date, you will be fully vested in the Award.
|
3.3.
|
Termination by Tyson without Cause. In the event of your Termination of Employment by Tyson for reasons other than for Cause, you will become vested in a pro rata portion of the Award subject to your timely execution and non-revocation of a Release. The pro rata portion of the Award shall be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period. Notwithstanding the foregoing, in the event of your Termination of Employment by Tyson for reasons other than for Cause on or after the later of the first anniversary of the Grant Date or the date you attain age 62, you will be fully vested in the Award subject to your timely execution and non-revocation of a Release.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes vested, you will become fully vested in the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason.
|
4.
|
Delivery of Shares. To the extent the Award becomes vested and earned, it will be settled by the delivery to you of shares no longer subject to forfeiture restrictions as soon as administratively practicable following the Vesting Date or Vesting Event, as applicable, set forth in Section 3 as follows.
|
4.1.
|
Prior to a Change in Control. If the Award is settled prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock.
|
4.2
|
On and After a Change in Control. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If the Award is settled on or after a Change in Control and Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
5.
|
Withholding Taxes. By executing this Award Agreement and accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
6.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
7.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
8.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
9.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
10.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 4. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
11.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
12.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
13.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
14.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
15.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
16.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
17.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Quantity Granted Shares of Restricted Stock
|
Vesting Date
|
Percent of Award Vested
|
November 19, 2021
|
100%
|
1.
|
Terms and Conditions. The Award of Restricted Stock (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Change in Control”, “Disability”, “Good Reason”, “Release”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
(b)
|
Violation of the policies of Tyson (including a violation of the Code of Conduct);
|
(c)
|
Any willful and wrongful conduct or omission by you that injures Tyson;
|
(d)
|
Any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(e)
|
You are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
|
(f)
|
Your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
|
(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
|
(b)
|
Greater than a fifteen (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
|
(c)
|
Transfer of your primary employment location beyond fifty (50) miles; or
|
(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control.
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death or Disability. In the event of your Termination of Employment due to death or Disability before the Vesting Date, you will be vested in a pro rata portion of the unvested portion of the Award determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason; Voluntary Termination under the “5+1” Officer Separation Program. In the event of your Termination of Employment by Tyson for reasons other than for Cause; by you for Good Reason; or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc. before the Vesting Date, you will become vested in a pro rata portion of the Award subject to your timely execution and non-revocation of a Release. The pro rata portion of the Award shall be determined by multiplying the number of unvested restricted shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the Grant Date and your Termination of Employment and the denominator of which is the total number of days in the three-year vesting period.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes vested, you will become fully vested in the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason.
|
4.
|
Delivery of Shares. To the extent the Award becomes vested and earned, it will be settled by the delivery to you of shares no longer subject to forfeiture restrictions as soon as administratively practicable following the Vesting Date or Vesting Event, as applicable, set forth in Section 3 as follows.
|
4.1.
|
Prior to a Change in Control. If the Award is settled prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock.
|
4.2
|
On and After a Change in Control. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If the Award is settled on or after a Change in Control and Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
5.
|
Withholding Taxes. By executing this Award Agreement and accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
6.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
7.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
8.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
9.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
10.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 4. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
11.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
12.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
13.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
14.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
15.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax
|
16.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
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17.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Quantity Granted Performance Shares
|
1.
|
Terms and Conditions. The Award of Performance Shares (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, the following terms shall have the meanings as set forth below:
|
2.1.
|
“Award” means the unfunded promise to deliver to you all or a portion of the Performance Shares (or, if applicable, substitute consideration) upon meeting the applicable vesting and performance measures set forth in this Award Agreement.
|
2.2.
|
"Cause," "Disability," “Good Reason,” and "Release" shall have the same meanings as set forth in your employment agreement with Tyson in effect at the time of this Award (the “Employment Agreement”).
|
2.3.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity; provided such event also constitutes a “change in the ownership of a corporation” or a “change in the effective control of a corporation” within the meaning of Code Section 409A.
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2.4.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.5.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.6.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.7.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to the Final Measurement Date.
|
2.8.
|
"Peer Group" shall mean that group of publicly traded companies most recently determined by the Compensation and Leadership Development Committee of Tyson's Board of Directors ("Compensation Committee"), which at the Initial Measurement Date is comprised of the following companies: Archer Daniels Midland Co., Bunge Ltd., Campbell Soup Co., Coca-Cola Co., ConAgra Foods, Inc., General Mills, Inc., The Hershey Company, Hormel Foods Corp., J.M. Smucker Co., Kellogg Co., Kraft Heinz Co., Mondelez International, Inc., PepsiCo Inc., and Pilgrim's Pride Corp. If one or more members of the Peer Group ceases to be the surviving entity in a corporate transaction, the successor entity shall replace the entity which has ceased to exist provided that the primary
|
2.9.
|
"Performance Shares" shall mean the shares of Tyson's Class A common stock (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted) subject to this Award Agreement.
|
2.10.
|
“Retirement” shall mean your voluntary Termination of Employment from Tyson and/or its affiliates on or after the date you attain age 62.
|
2.11.
|
"Share Price" shall mean the average ending closing price of Tyson's Class A common stock in the case of Tyson (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted), or the publicly traded stock in the case of a Peer Group company, as applicable, for the twenty trading days preceding the Initial Measurement Date and the Final Measurement Date.
|
2.12.
|
“Termination of Employment” shall have the meaning ascribed to the term Separation from Service in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.13.
|
“Total Shareholder Return” shall mean the percentile comparison during the Measurement Period of the total shareholder return of Tyson as compared to members of the Peer Group. Total shareholder return of Tyson and of the Peer Group shall be calculated as the sum of (a) Share Price at Final Measurement Date, less (b) Share Price at the Initial Measurement Date, plus (c) cumulative dividends per share paid during the Measurement Period based on the ex-dividend date for which the resulting sum of (a), (b) and (c) is divided by the Share Price at the Initial Measurement Date.
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2.14.
|
“Total Shareholder Return Goals” shall mean the performance measures specified in Section 4.
|
2.15.
|
“Tyson” shall mean Tyson Foods, Inc., or any successor thereto.
|
2.16.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.17.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. Any Award which has become payable pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy any of the performance measures provided in Section 4.
|
3.2.
|
Death, Disability or Retirement. In the event your Termination of Employment is due to death, Disability or Retirement before the Vesting Date, you will be entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied. The pro rata portion of the Award shall be determined by multiplying the amount of the Award that you would have
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason. In the event of your Termination of Employment by Tyson other than for Cause or by you for Good Reason before the Vesting Date, you will become entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied contingent upon your timely execution and non-revocation of a Release. The pro rata portion of the Award shall by determined by multiplying the amount of the Award that you would have received had you remained employed until the Vesting Date by a fraction, the numerator of which is number of days during which you remained employed by Tyson and/or its affiliates from the Grant Date and the denominator of which is the total number of days in the Vesting Period. Notwithstanding the foregoing, if there is a Change in Control prior to the Final Measurement Date, payment of the Award will be based on performance at the level determined in accordance with the provisions of Section 3.4.
|
3.4.
|
Change in Control. Following a Change in Control that occurs during the Measurement Period, the requirement that you not experience a Termination of Employment prior to the Vesting Date will be excused upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (but prior to the last day of the Measurement Period): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. If vested, you will be entitled to payment of the Award pursuant to this Section 3.4 based on whichever of the following produces the greater result: (x) the target level of performance set forth in Section 4(iii), or (y) the actual level of performance determined as of the effective date of the Change in Control.
|
4.
|
Performance Measures. The extent, if any, to which you shall have the right to payment of the Award shall depend upon your satisfying one of the continuous employment conditions set forth in Section 3 and the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date, as specified below:
|
5.
|
Payment of Award. The Performance Shares that may become payable pursuant to this Award Agreement shall be based upon the highest performance determined in accordance with the provisions of Section 4 or, in the event of a Change in Control prior to the Final Measurement Date, based on performance at the level determined in accordance with the provisions of Section 3.4. In other words, the attainment of multiple performance measures under this Award Agreement will not result in the payment of a cumulative number of Performance Shares for each performance measure achieved. Payment of the Award, to the extent earned, shall be made as follows:
|
5.1
|
Prior to a Change in Control. If the Final Measurement Date occurs prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock no later than seventy (70) days after the Final Measurement Date.
|
5.2
|
On and After a Change in Control. If a Change in Control occurs on or prior to the Final Measurement Date, payment of the Award, to the extent earned, will be made no later than seventy (70) days after the later of the effective date of the Change in Control or your Termination of Employment. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not confer a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason in accordance with the terms of your Employment Agreement.
|
16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. To the extent applicable, references to Tyson herein shall be deemed to include a reference any such successor. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
19.
|
Section 409A. It is the intent of Tyson that any payment pursuant to the Award be exempt from Code Section 409A, to the maximum extent permitted. However, if any such payment is considered to be “nonqualified deferred compensation” subject to Code Section 409A, such payment will be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Code Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. To the extent that some portion of any payment under this Award may be bifurcated and treated as exempt from Code Section 409A under the “short-term deferral” or “separation pay” exemptions, then such amounts may be so treated as exempt.
|
Award:
|
Quantity Granted Performance Shares
|
1.
|
Terms and Conditions. The Award of Performance Shares (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from time to time (the “Plan”). Unless otherwise defined herein, all capitalized terms in this Award Agreement shall have the meaning stated in the Plan. Please see the Plan document for more information on these terms and conditions. A copy of the Plan is available upon request.
|
2.
|
Definitions. For purposes of this Award Agreement, the following terms shall have the meanings as set forth below:
|
2.1.
|
“Award” means the unfunded promise to deliver to you all or a portion of the Performance Shares (or, if applicable, substitute consideration) upon meeting the applicable vesting and performance measures set forth in this Award Agreement.
|
2.2.
|
“Cause” is defined as a Termination of Employment as a result of the occurrence of one or more of the following events:
|
(a)
|
Job-related misconduct or non-performance of duties;
|
(b)
|
Violation of the policies of Tyson (including a violation of the Code of Conduct);
|
(c)
|
Any willful and wrongful conduct or omission by you that injures Tyson;
|
(d)
|
Any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(e)
|
You are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
|
(f)
|
Your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
|
2.3.
|
“Change in Control” shall have the meaning ascribed to it in the Plan but shall not include any event as a result of which one or more of the following persons or entities possess or continues to possess, immediately after such event, over fifty percent (50%) of the combined voting power of Tyson or, if applicable, a successor entity: (a) Tyson Limited Partnership, or any successor entity; (b) individuals related to the late Donald John Tyson by blood, marriage or adoption, or the estate of any such individual (including Donald John Tyson’s); or (c) any entity (including, but not limited to, a partnership, corporation, trust or limited liability company) in which one or more of the entities, individuals or estates described in clauses (a) and (b) hereof possess over fifty percent (50%) of the combined voting power or beneficial interests of such entity; provided such event also constitutes a “change in the ownership of a corporation” or a “change in the effective control of a corporation” within the meaning of Code Section 409A.
|
2.4.
|
“Disability” shall have the same meaning as provided in the long-term disability plan or policy maintained or, if applicable, most recently maintained, by Tyson. If no long-term disability plan or policy was ever maintained on your behalf or, if the determination of Disability relates to an incentive stock option, Disability means that condition described in Section 22(e)(3) of the Internal Revenue Code (the “Code”), as amended, or any successors thereto, and any regulations or rulings issued thereunder. In the event of a dispute, the determination of Disability will be made by the Committee (as defined in the Plan) and will be supported by the advice of a physician competent in the area to which such Disability relates.
|
2.5.
|
"Final Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.6.
|
“Good Reason” is defined as the occurrence of any one or more of the following actions or events without your written consent; provided that you may not rely on any particular action or event as a basis for terminating your employment for Good Reason unless you deliver a Notice of Good Reason based on that action or event within thirty (30) days of its initial occurrence and Tyson has failed to correct the circumstances cited by you as constituting Good Reason within thirty (30) days of such Notice of Good Reason and you resign within thirty (30) days following such failure:
|
(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
|
(b)
|
Greater than a fifteen (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
|
(c)
|
Transfer of your primary employment location beyond fifty (50) miles; or
|
(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control.
|
2.7.
|
“Grant Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.8.
|
"Initial Measurement Date" shall mean the date identified as such on the cover page of this Award Agreement.
|
2.9.
|
"Measurement Period" shall mean the three-fiscal year period from the Initial Measurement Date to the Final Measurement Date.
|
2.10.
|
"Peer Group" shall mean that group of publicly traded companies most recently determined by the Compensation and Leadership Development Committee of Tyson's Board of Directors ("Compensation Committee"), which at the Initial Measurement Date is comprised of the following companies: Archer Daniels Midland Co., Bunge Ltd., Campbell Soup Co., Coca-Cola Co., ConAgra Foods, Inc., General Mills, Inc., The Hershey Company, Hormel Foods Corp., J.M. Smucker Co., Kellogg Co., Kraft Heinz Co., Mondelez International, Inc., PepsiCo Inc., and Pilgrim's Pride Corp. If one or more members of the Peer Group ceases to be the surviving entity in a corporate transaction, the successor entity shall replace the entity which has ceased to exist provided that the primary business of the successor entity and its affiliates is in substantially the same lines of business as Tyson. If a member of the Peer Group (a) ceases to have any class of securities registered under the Securities Exchange Act of 1934; (b) ceases to exist in circumstances where there is no successor entity or where the primary business of the successor entity and its affiliates is not in substantially
|
2.11.
|
"Performance Shares" shall mean the shares of Tyson's Class A common stock (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted) subject to this Award Agreement.
|
2.12.
|
“Release” shall mean that specific document which Tyson shall present to you for consideration and execution after your Termination of Employment, under which you agree to irrevocably and unconditionally release and forever discharge Tyson, its subsidiaries, affiliates and related parties from any and all causes of action which you at that time had or may have had against Tyson and its subsidiaries, affiliates and related parties (excluding any claim under state workers’ compensation or unemployment laws). The Release will be provided to you as soon as practicable after your termination date, but in any event in sufficient time so that you will have adequate time to review the Release as provided by applicable law.
|
2.13.
|
"Share Price" shall mean the average ending closing price of Tyson's Class A common stock in the case of Tyson (or, in the event of a Change in Control, the capital stock of the successor entity into which Tyson Class A common stock was converted), or the publicly traded stock in the case of a Peer Group company, as applicable, for the twenty trading days preceding the Initial Measurement Date and the Final Measurement Date.
|
2.14.
|
“Termination of Employment” shall have the meaning ascribed to the term Separation from Service in the Plan but, in the event of a Change in Control, any successor and its affiliates shall replace Tyson and its affiliates in interpreting the meaning of a Termination of Employment.
|
2.15.
|
“Total Shareholder Return” shall mean the percentile comparison during the Measurement Period of the total shareholder return of Tyson as compared to members of the Peer Group. Total shareholder return of Tyson and of the Peer Group shall be calculated as the sum of (a) Share Price at Final Measurement Date, less (b) Share Price at the Initial Measurement Date, plus (c) cumulative dividends per share paid during the Measurement Period based on the ex-dividend date for which the resulting sum of (a), (b) and (c) is divided by the Share Price at the Initial Measurement Date.
|
2.16.
|
“Total Shareholder Return Goals” shall mean the performance measures specified in Section 4.
|
2.17.
|
“Tyson” shall mean Tyson Foods, Inc., or any successor thereto.
|
2.18.
|
“Vesting Date” shall mean the date identified as such on the cover page of this Award Agreement.
|
2.19.
|
“Vesting Period” shall mean the period beginning on the Grant Date and ending on the Vesting Date.
|
3.
|
Vesting.
|
3.1.
|
Vesting and Forfeiture. Any Award which has become payable pursuant to the performance measures set forth in Section 4 shall be considered as fully earned by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of: (i) your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4, or (ii) the failure to satisfy any of the performance measures provided in Section 4.
|
3.2.
|
Death or Disability. In the event your Termination of Employment is due to death or Disability before the Vesting Date, you will be entitled to a pro rata portion of the Award if the applicable
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason; Voluntary Termination by you under the “5+1” Officer Separation Program. In the event of your Termination of Employment by Tyson other than for Cause or by you for Good Reason or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc. before the Vesting Date, you will become entitled to a pro rata portion of the Award if the applicable performance measures set forth in Section 4 are satisfied contingent upon your timely execution and non-revocation of a Release. The pro rata portion of the Award shall by determined by multiplying the amount of the Award that you would have received had you remained employed until the Vesting Date by a fraction, the numerator of which is number of days during which you remained employed by Tyson and/or its affiliates from the Grant Date and the denominator of which is the total number of days in the Vesting Period. Notwithstanding the foregoing, if there is a Change in Control prior to the Final Measurement Date, payment of the Award will be based on performance at the level determined in accordance with the provisions of Section 3.4.
|
3.4.
|
Change in Control. Following a Change in Control that occurs during the Measurement Period, the requirement that you not experience a Termination of Employment prior to the Vesting Date will be excused upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (but prior to the last day of the Measurement Period): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. If vested, you will be entitled to payment of the Award pursuant to this Section 3.4 based on whichever of the following produces the greater result: (x) the target level of performance set forth in Section 4(iii), or (y) the actual level of performance determined as of the effective date of the Change in Control.
|
4.
|
Performance Measures. The extent, if any, to which you shall have the right to payment of the Award shall depend upon your satisfying one of the continuous employment conditions set forth in Section 3 and the extent to which the applicable performance measure has been satisfied as of the Final Measurement Date, as specified below:
|
5.
|
Payment of Award. The Performance Shares that may become payable pursuant to this Award Agreement shall be based upon the highest performance determined in accordance with the provisions of Section 4 or, in the event of a Change in Control prior to the Final Measurement Date, based on performance at the level determined in accordance with the provisions of Section 3.4. In other words, the attainment of multiple performance measures under this Award Agreement will not result in the payment of a cumulative number of Performance Shares for each performance measure achieved. Payment of the Award, to the extent earned, shall be made as follows:
|
5.1
|
Prior to a Change in Control. If the Final Measurement Date occurs prior to a Change in Control, the Award will be settled in shares of Tyson Class A common stock no later than seventy (70) days after the Final Measurement Date.
|
5.2
|
On and After a Change in Control. If a Change in Control occurs on or prior to the Final Measurement Date, payment of the Award, to the extent earned, will be made no later than seventy (70) days after the later of the effective date of the Change in Control or your Termination of Employment. If Tyson Foods, Inc. is the surviving entity, the Award will be settled in shares of Tyson Class A common stock. If Tyson Foods, Inc. is not the surviving entity, the Award will be settled either (i) in the number and class of shares of capital stock of the successor entity into which each outstanding share of Tyson Class A common stock has been converted pursuant to such Change in Control, unless the Committee determines in its sole discretion to settle the Award in cash; or (ii) if shareholders of Tyson Foods, Inc. receive consideration other than in shares of capital stock of the successor entity, such other consideration received by shareholders of Tyson Foods, Inc. or in cash, as the Committee may determine in its sole discretion.
|
6.
|
Withholding Taxes. By accepting the Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
9.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
10.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the terms of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
11.
|
Restrictions on Transfer of Award. You shall not dispose of the Award prior to the date unrestricted, vested shares in your name are delivered to you by Tyson pursuant to Section 5. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
12.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
13.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
14.
|
No Vested Right in Future Awards. You acknowledge and agree that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not confer a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
15.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award
|
16.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
17.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
18.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. To the extent applicable, references to Tyson herein shall be deemed to include a reference any such successor. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
19.
|
Section 409A. It is the intent of Tyson that any payment pursuant to the Award be exempt from Code Section 409A, to the maximum extent permitted. However, if any such payment is considered to be “nonqualified deferred compensation” subject to Code Section 409A, such payment will be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Code Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. To the extent that some portion of any payment under this Award may be bifurcated and treated as exempt from Code Section 409A under the “short-term deferral” or “separation pay” exemptions, then such amounts may be so treated as exempt.
|
Award:
|
Option to Purchase Quantity Granted Shares
|
Term:
|
Earlier of (i) ten (10) years; or (ii) dates set forth in Section 4
|
Vesting Date
|
Percent of Award Vested
|
November 19, 2019
November 19, 2020
November 19, 2021
|
33 1/3 %
33 1/3 %
33 1/3 %
|
1.
|
Terms and Conditions. The Award of Stock Options (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Change in Control”, “Disability”, “Good Reason”, “Release”, “Retirement”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
(b)
|
violation of the policies of Tyson (including a violation of the Code of Conduct);
|
(c)
|
any willful and wrongful conduct or omission by you that injures Tyson;
|
(d)
|
any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(e)
|
you are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
|
(f)
|
your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
|
(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
|
(b)
|
Greater than a fifteen percent (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
|
(c)
|
Transfer of your primary employment location beyond fifty (50) miles;
|
(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control; or
|
(e)
|
Any action or event described in the above clauses (a)-(c) taken by Tyson prior to a Change in Control at the request of the other party to the Change in Control transaction or otherwise in contemplation of the closing of a Change in Control transaction.
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned and exercisable by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death, Disability or Retirement. In the event your employment with Tyson is terminated due to death, Disability or Retirement before the Award is vested in full, you will be fully vested in the Award.
|
3.3.
|
Termination by Tyson without Cause. In the event of your Termination of Employment by Tyson for reasons other than for Cause before the Award is vested in full, contingent upon your timely execution and non-revocation of a Release, you will be vested in a pro rata portion of any unvested portion of the Award determined by multiplying the number of unvested option shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the later of the Grant Date or the Vesting Date that occurred immediately before your Termination of Employment and the denominator of which is the total number of days between (i) the later of the Grant Date or the Vesting Date that occurred immediately before your termination of employment by Tyson and (ii) the third anniversary of the Grant Date.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes fully vested, you will become fully vested in the unvested portion of the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. The Award will be settled in the same form of consideration received by shareholders of Tyson Foods, Inc.’s Class A common stock in connection with the Change in Control transaction, unless the express terms of the documentation establishing the terms of the Change in Control provide otherwise.
|
4.
|
Time of Exercise of Award. The Award will be exercisable upon the Vesting Dates and/or Vesting Events set forth in Section 3. In the event of your Termination of Employment, your vested options shall no longer remain exercisable, except as follows:
|
4.1.
|
Termination of Employment. Except as provided in Section 4.2, in the event of your Termination of Employment, your vested Award will remain exercisable for a period of three (3) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
4.2.
|
Death, Disability or Retirement; Termination by Tyson without Cause or by you for Good Reason. In the event your Termination of Employment is due to death, Disability or Retirement, or is effected by Tyson without Cause or by you for Good Reason, your vested Award will remain exercisable by you, or your Beneficiary in the case of your death, for a period of twelve (12) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
5.
|
Manner of Exercise of Award. The Award may be exercised through any of the following methods as provided under the Plan:
|
5.1.
|
Cash of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.2.
|
Delivery to Tyson of the number of shares owned at least six (6) months at the time of exercise having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.3.
|
Cashless exercise through a broker designated by Tyson, which shall account for, and include, any required tax withholding but not to exceed the required minimum statutory withholding;
|
5.4.
|
Withholding of the number of shares having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding but not to exceed the required minimum statutory withholding; or
|
5.5.
|
Unless the Award is no longer exercisable under the terms of Section 4 above, by accepting the terms herein you consent to have the options automatically exercise, using any of the above methods at Tyson’s sole discretion, either at the end of the period defined in Section 4.1 or Section 4.2, as applicable, or, if earlier, on the tenth (10th) anniversary of the Grant Date (or, if the 10th anniversary of the Grant Date is not a business day, the business day immediately preceding the 10th anniversary of the Grant Date), if the price per share of Tyson stock at the time of exercise is greater than the Exercise Price.
|
6.
|
Withholding Taxes. By executing this Award Agreement and accepting this Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To the extent that the terms of this Award and any such policy conflict, then the terms of such policy shall prevail.
|
8.
|
Beneficiary Designation. In accordance with the terms of the Plan, you may name a Beneficiary who may exercise the Award under this Award Agreement in case of your death before you receive any or all of the Award. Each Beneficiary designation shall revoke all prior designations, shall be in a form prescribed by the Committee, and shall be effective only when filed in writing with the Committee during your lifetime.
|
9.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
10.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
11.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the provisions of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
12.
|
Restrictions on Transfer of Award. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
13.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
14.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
15.
|
No Vested Right in Future Awards. You acknowledge and agree by executing this Award Agreement that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
16.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
17.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any
|
18.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
19.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Award:
|
Option to Purchase Quantity Granted Shares
|
Term:
|
Earlier of (i) ten (10) years; or (ii) dates set forth in Section 4
|
Vesting Date
|
Percent of Award Vested
|
November 19, 2019
November 19, 2020
November 19, 2021
|
33 1/3 %
33 1/3 %
33 1/3 %
|
1.
|
Terms and Conditions. The Award of Stock Options (as set forth on the cover page of this Award Agreement) is subject to all the terms and conditions of the Tyson Foods, Inc. 2000 Stock Incentive Plan or any successors thereto, as such plan or its successors may be amended and restated from
|
2.
|
Definitions. For purposes of this Award Agreement, “Cause”, “Change in Control”, “Disability”, “Good Reason”, “Release”, “Termination of Employment” and “Tyson” shall have the meanings set forth below:
|
(b)
|
violation of the policies of Tyson (including a violation of the Code of Conduct);
|
(c)
|
any willful and wrongful conduct or omission by you that injures Tyson;
|
(d)
|
any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(e)
|
you are convicted of, confess to, plead no contest to, or become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in a felony, serious crime, job-related misdemeanor, or similar offense; or
|
(f)
|
your intentional or willful violation of any restrictive covenant or other agreement to which you are a party with Tyson.
|
(a)
|
A material diminution in authority, duties or responsibilities (not merely a change in job title alone);
|
(b)
|
Greater than a fifteen percent (15%) decrease in the total of your then-current (i) base salary, (ii) target annual cash award opportunity under the Tyson Foods, Inc. Annual Incentive Plan, or any successors thereto, as such plan or its successors may be amended or restated from time to time, as determined by Tyson in its sole discretion, and (iii) target grant date value of the annual long-term incentive award under the Plan, as determined by Tyson in its sole discretion;
|
(c)
|
Transfer of your primary employment location beyond fifty (50) miles; or
|
(d)
|
The failure by Tyson to obtain a satisfactory agreement from any successor to assume and agree to perform the obligations under this Award Agreement for at least twenty-four (24) months following a Change in Control.
|
3.
|
Vesting.
|
3.1.
|
Vesting Schedule and Forfeiture. The Award which becomes vested pursuant to the Vesting Schedule shall be considered as fully earned and exercisable by you, subject to the further provisions of this Section 3. Notwithstanding any other provision of this Award Agreement to the contrary, any Award will be forfeited back to Tyson in the event of your Termination of Employment before the Vesting Date, except as otherwise provided in Sections 3.2 through 3.4. The events described in Sections 3.2 through 3.4 are referred to herein as “Vesting Events.”
|
3.2.
|
Death or Disability. In the event your employment with Tyson is terminated due to death or Disability before the Award is vested in full, you will be vested in a pro rata portion of any unvested portion of the Award determined by multiplying the number of unvested option shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the later of the Grant Date or the Vesting Date that occurred immediately before your Termination of Employment and the denominator of which is the total number of days between (i) the later of the Grant Date or the Vesting Date that occurred immediately before your Termination of Employment and (ii) the third anniversary of the Grant Date.
|
3.3.
|
Termination by Tyson without Cause or by you for Good Reason; Voluntary Termination under the “5+1” Officer Separation Program. In the event of your Termination of Employment by Tyson for reasons other than for Cause, or by you for Good Reason or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc., contingent upon your timely execution and non-revocation of a Release, you will be vested in a pro rata portion of any unvested portion of the Award determined by multiplying the number of unvested option shares by a fraction, the numerator of which is the total number of days that you were employed by Tyson between the later of the Grant Date or the Vesting Date that occurred immediately before your Termination of Employment and the denominator of which is the total number of days between (i) the later of the Grant Date or the Vesting Date that occurred immediately before your termination of employment by Tyson and (ii) the third anniversary of the Grant Date.
|
3.4.
|
Change in Control. Following a Change in Control that occurs before the Award becomes fully vested, you will become fully vested in the unvested portion of the Award upon the occurrence of either of the following events, provided such event occurs no later than twenty-four (24) months following the Change in Control (to the extent the Award has not otherwise become fully vested prior to such event): (i) you experience a Termination of Employment by Tyson without Cause or (ii) you resign from your employment on account of Good Reason. The Award will be settled in the same form of consideration received by shareholders of Tyson Foods, Inc.’s Class A common stock in connection with the Change in Control transaction, unless the express terms of the documentation establishing the terms of the Change in Control provide otherwise.
|
4.
|
Time of Exercise of Award. The Award will be exercisable upon the Vesting Dates and/or Vesting Events set forth in Section 3. In the event of your Termination of Employment, your vested options shall no longer remain exercisable, except as follows:
|
4.1.
|
Termination of Employment. Except as provided in Section 4.2, in the event of your Termination of Employment, your vested Award will remain exercisable for a period of three (3) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
4.2.
|
Death, Disability, Termination by Tyson without Cause or by you for Good Reason, or Voluntary Termination under the “5+1” Officer Separation Program. In the event your Termination of Employment is due to death or Disability, or is effected by Tyson without Cause, by you for Good Reason, or through participation in the Officer Separation Program component of the Executive Severance Plan of Tyson Foods, Inc., your vested Award will remain exercisable by you, or your Beneficiary in the case of your death, for a period of thirty-six (36) months from the Termination of Employment, but not longer than ten (10) years from the Grant Date.
|
5.
|
Manner of Exercise of Award. The Award may be exercised through any of the following methods as provided under the Plan:
|
5.1.
|
Cash of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.2.
|
Delivery to Tyson of the number of shares owned at least six (6) months at the time of exercise having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding;
|
5.3.
|
Cashless exercise through a broker designated by Tyson, which shall account for, and include, any required tax withholding but not to exceed the required minimum statutory withholding;
|
5.4.
|
Withholding of the number of shares having a fair market value of not less than the product of the Exercise Price multiplied by the number of shares to be purchased on exercise, plus the amount of any required tax withholding but not to exceed the required minimum statutory withholding; or
|
5.5.
|
Unless the Award is no longer exercisable under the terms of Section 4 above, by accepting the terms herein you consent to have the options automatically exercise, using any of the above methods at Tyson’s sole discretion, either at the end of the period defined in Section 4.1 or Section 4.2, as applicable, or, if earlier, on the tenth (10th) anniversary of the Grant Date (or, if the 10th anniversary of the Grant Date is not a business day, the business day immediately preceding the 10th anniversary of the Grant Date), if the price per share of Tyson stock at the time of exercise is greater than the Exercise Price.
|
6.
|
Withholding Taxes. By executing this Award Agreement and accepting this Award, you acknowledge and agree that you are responsible for all applicable income and other taxes, as well as any social insurance contributions and other deductions or withholdings required by applicable law, from any Award, including federal, FICA, state and local taxes applicable in your country of residence or employment. Tyson shall withhold taxes by any manner acceptable or administratively feasible under the terms of the Plan, but not to exceed the maximum tax due for the applicable income you receive from the Award, consistent with the laws of the applicable federal, state or local taxing authority.
|
7.
|
Clawback. Notwithstanding any other provision of this Award Agreement to the contrary, by executing this Award Agreement and accepting the Award, you agree and consent to the application and enforcement of any clawback policy that may be implemented by Tyson (whether in existence as of the Grant Date or later adopted, and as such policy may be amended from time to time) that may apply to you, any shares issued pursuant to this Award and/or any amount received with respect to any sale of any such shares, and you expressly agree that Tyson may take such actions as are necessary to effectuate the enforcement of such policy without your further consent or action. To
|
8.
|
Beneficiary Designation. In accordance with the terms of the Plan, you may name a Beneficiary who may exercise the Award under this Award Agreement in case of your death before you receive any or all of the Award. Each Beneficiary designation shall revoke all prior designations, shall be in a form prescribed by the Committee, and shall be effective only when filed in writing with the Committee during your lifetime.
|
9.
|
Right of the Committee. The Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding.
|
10.
|
Severability. In the event that any one or more of the provisions or a portion thereof contained in this Award Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provision of this Award Agreement, and this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
|
11.
|
Entire Agreement. Subject to the terms and conditions of the Plan, this Award Agreement expresses the entire understanding and agreement of Tyson and you with respect to the subject matter. In the event of any conflict or inconsistency between the provisions of this Award Agreement and the terms applicable to stock incentive awards set forth in any employment agreement, offer letter, or other agreement or arrangement that you have entered into with Tyson and/or its affiliates, the former will always control. In the event of any conflict between the provisions of the Plan and the terms of this Award Agreement, the provisions of the Plan will control unless this Award Agreement explicitly states that an exception to the Plan is being made. The Award has been made pursuant to the Plan and an administrative record is maintained by the Committee.
|
12.
|
Restrictions on Transfer of Award. Any disposition of the Award or any portion thereof shall be a violation of the terms of this Award Agreement and shall be void and without effect; provided, however, that this provision shall not preclude a transfer as otherwise permitted by the Plan.
|
13.
|
Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award Agreement.
|
14.
|
Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and an injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
|
15.
|
No Vested Right in Future Awards. You acknowledge and agree by executing this Award Agreement that the granting of the Award under this Award Agreement is made on a fully discretionary basis by Tyson and that this Award Agreement does not lead to a vested right to further awards of any type in the future. Further, the Award set forth in this Award Agreement constitutes a non-recurrent benefit and the terms of this Award Agreement are applicable only to the Award granted pursuant to this Award Agreement.
|
16.
|
No Right to Continued Employment. You acknowledge and agree (through electronic acknowledgment and acceptance of this Award Agreement) that neither the adoption of the Plan nor the granting of any award shall confer any right to continued employment with Tyson, nor shall it interfere in any way with Tyson’s right to terminate your employment at any time for any reason.
|
17.
|
Reduction to Maximize After-Tax Benefits. Notwithstanding anything contained in this Award Agreement to the contrary, if the total payments to be paid to you under this Award, along with any other payments to you by Tyson, would result in you being subject to the excise tax imposed by Section 4999 of the Code (commonly referred to as the “Golden Parachute Tax”), Tyson shall reduce the aggregate payments to the largest amount which can be paid to you without triggering the excise tax, but only if and to the extent that such reduction would result in you retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by you will be made by Tyson, in its sole discretion. If payments are to be reduced, the payments made latest in time will be reduced first and if payments are to be made at the same time, non-cash payments will be reduced before cash payments.
|
18.
|
Governing Law. The Plan, this Award Agreement and all determinations made and actions taken pursuant to the Plan or Award Agreement shall be governed by the laws of the State of Arkansas, without giving effect to the conflict of laws principles thereof.
|
19.
|
Successors and Assigns. This Award Agreement shall inure to the benefit of and be binding upon each successor and assign of Tyson. All obligations imposed upon you, and all rights granted to Tyson hereunder, shall be binding upon your heirs, successors and administrators.
|
Employee:
|
Participant Name
|
Award:
|
Stock Appreciation Right equal to Quantity Granted shares of Tyson Foods, Inc. Class A common stock, $0.10 par value per share.
|
Grant Date:
|
November 19, 2018
|
Base Price per Share:
|
$Grant Price USD
|
Exercise Period:
|
Earlier of (i) the tenth (10th) anniversary of the Grant Date or (ii) as otherwise defined herein.
|
Exercise Right:
|
This Stock Appreciation Right Award may only be exercised as to its vested portion pursuant to the schedule below and as described herein.
|
Vesting Schedule:
|
One-third (1/3) of Award Vested upon each anniversary of the Grant Date.
|
(a)
|
claims, actions, causes of action or liabilities ansmg under the Worker Adjustment and Retraining Notification Act as amended, Title VII of the Civil Rights Act of 1964, as amended, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, the Civil rights Act of 1991, as amended, the Civil Rights Act of 1866, the National Labor Relations Act, the Fair Labor Standards Act, as amended, the Federal Occupational Safety and Health Act, as amended, the Employee Retirement Income Security Act of 1974, as amended,
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(b)
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claims or rights you may have as of the date you sign this Agreement arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sec. 621, et seq. ("ADEA''). You further agree that your waiver of rights under this Agreement is knowing and voluntary and in compliance with the Older Workers Benefit Protection Act of 1990; and/or
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(c)
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claims, actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance, regulation, constitution or executive order; and/or
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(d)
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any other claim whatsoever including, but not limited to, claims for severance pay, claims for salary/wages/commissions/bonus, claims for expense reimbursement, claims based upon breach of contract, wrongful termination, defamation, intentional infliction of emotional distress, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever relating to your employment with and/or separation from employment with Tyson and/or any of the other Releasees.
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(17)
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Additional Employee Acknowledgements. You hereby acknowledge and agree that:
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•
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You are entering into this Agreement freely, knowingly and voluntarily, and were in no manner coerced into signing it;
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You have been advised to consult with an attorney before signing this Agreement;
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You have read this Agreement in its entirety and understand its tenns;
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THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS;
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•
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In the event of a group termination as determined by Tyson, you will have received, along with this Agreement, a listing of job titles and ages of
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Tyson employees selected and not selected for termination in connection with Tyson's group termination;
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You understand you have had at least twenty-one (21) days to consider this Agreement before signing it;
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You understand that you have seven (7) days after signing the Agreement to revoke it;
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You are not otherwise entitled to the Separation Payments or any other benefits contemplated by Section 2 of this Agreement which you will receive in exchange for signing and not later revoking this Agreement; and
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This Agreement is the entire Agreement between you and Tyson regarding the termination of your employment with Tyson.
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New ESP (Contributions 2005 and After)
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$15,335.60
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2015-2018 Balances as of 9-17-18
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lf DOT 12-1-2018
Lump sum June 2019 (Lump sum default; less
than 401k limit]
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5 annual installments beg. later of Jan following termination or Jan following age 62
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Hillshire Executive Deferred Compensation Plan
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|||
$1,664,832.76
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Balances as of 9-17-18
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lf DOT 12-1-2018
Lump sum Jan 2020
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Lump sum Jan 2020
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Hillshire 401k SERP
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$966,961.27
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Balances as of 9-17-18
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lf DOT 12-1-2018
Lump sum July 2019
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Lump sum in seventh month following termination of employment
This election cannot be changed.
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Supplemental Executive Retirement Plan (SERP)
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Not vested. Forfeiture of benefits.
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Annual Incentive Plan
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$1,347,242
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FY18 estimated award at current projected funding level; final amount to be adJusted for final results.
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$313,486
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FY19 estimated pro-rated award at target.
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1.
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Base Salary: You will receive an annual base salary of $600,000 and you will be paid biweekly. Your job is exempt from minimum wage and overtime obligations under the Fair Labor Standards Act.
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2.
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Annual Cash Incentive: You will continue to be eligible to participate in Tyson Foods, Inc. Annual Incentive Plan. The target annual incentive for your new role is 110% of your base salary. Annual incentive payments are made under the plan then in effect, and subject to the discretion of senior management along with an assessment of company, business unit/function, and individual performance. Upon the effective date of your promotion, you will be eligible for prorated participation at your new target incentive for the remainder of fiscal year 2019. For the portion of fiscal year 2019 in your prior position, your prior target incentive will remain in effect. You must be an active Tyson Foods employee on the payment date to receive any payout.
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3.
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Long Term Stock Incentive: You will continue to be eligible to participate in the Tyson Foods long-term incentive (LTI) program. Your new LTI target award and mix for your level is $1,500,000 of non-qualified stock options, restricted stock and performance shares. All award grants will follow the normal program guidelines and mix aligned with your level in the organization at the time of the grant and are made at the discretion of the company.
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4.
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One-Time Restricted Stock Award: In connection with your promotion, you are eligible to receive a one-time Restricted Stock award in the amount of $804,000. This award will be granted on the next quarterly off-cycle grant date following the effective date of your promotion, in accordance with the off-cycle stock grant provisions at Tyson Foods, and will vest 100% on the three (3) year anniversary of the grant date pursuant to the terms of the award agreement.
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5.
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Stock Purchase Plan: You will continue to be eligible to participate in the Tyson Foods, Inc. Employee Stock Purchase Plan. You may contribute (on an after-tax basis) up to 20% of your base salary to this plan. Currently, Tyson Foods matches 25% of the first 10% of base salary you contribute. This plan provides for 100% immediate vesting of both your contributions and the company match.
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6.
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Retirement Savings Plan – 401(k): You will continue to be eligible to participate in the 401(k) Retirement Savings Plan of Tyson Foods, Inc. Under the current plan, Tyson Foods matches 100% of the first 3% you contribute and 50% of the next 2% you contribute. You may contribute up to 60% of your eligible compensation to this plan until your contributions for the year reach the IRS maximum contribution or maximum compensation limits. This plan provides for 100% immediate vesting of both your contributions and the company match.
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7.
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Executive Savings Plan: If you are projected to reach the maximum IRS contribution limits in the Retirement Savings Plan (based on your contribution election to that plan) you can then begin deferring up to 60% of base pay into the Executive Savings Plan of Tyson Foods, a non-qualified deferred compensation plan. This plan is available to highly compensated employees, as defined by IRS regulations, and is available to those who wish to defer additional dollars over and above the IRS limits for qualified plans. You may also defer up to 100% of your annual cash incentive to the plan. All deferrals and payout elections must be elected during the annual election period each December prior to the deferral year. This plan provides company matching contributions in the same manner as the RSP. Additionally, as a member of the ELT, the Executive Savings Plan provides a contribution of 4% of your salary and annual incentive payment, as they are paid.
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8.
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Employee Health, Life and LTD Benefits: You and your eligible dependents will continue to be able to participate in the Tyson Foods, Inc. Group Health Plan, including medical, dental, vision, and prescription drug coverage. Your premium amount will be deducted from your payroll check on a pre-tax basis. At the time you enroll in the plan, you will also be enrolled in company-paid life insurance and the accidental death and dismemberment plans, each in the amount of one (1) times your annual salary. You will also participate in the company-paid Executive long-term disability insurance program which provides a tax-free benefit of 60% (up to plan limits) of the sum of the following: base pay, most recent annual cash incentive payment, and value of your most recent annual LTI grant.
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9.
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Executive Rewards Allowance: You will continue to be eligible for the Executive Rewards Allowance, which will provide you with an annual cash allowance of $12,000 (paid $461.54 each pay period). The allowance is an additional fringe benefit provided in recognition of the unique needs of an executive level team member beyond the core benefits package. The allowance is taxable income and can be used at your discretion to fund an array of items based upon the needs of you and your family (for example, financial and estate planning, executive physical, cell phone, etc.). There are no claims forms to remit or file. We are pleased to include the allowance as part of a valued, flexible and comprehensive rewards package.
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10.
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Officer Life Benefits: You continue to be eligible for additional company-paid life insurance in the amount of two (2) times your annual base salary (subject to limitations in accordance with the plan). This is in addition to the one (1) times annual salary life under the Group Life Plan.
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11.
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Vacation: You will continue to receive four (4) weeks of vacation on your annual Company service anniversary date.
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12.
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Relocation: Tyson has partnered with Graebel Relocation Services Worldwide (Graebel) to assist you in coordinating your relocation. Upon receiving the completed relocation request form, payback agreement, and relocation assessment form, Graebel will assign a dedicated consultant who will be your primary point of contact throughout your move. Your consultant will guide you through every step of the relocation process and answer any questions.
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13.
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Promotion Effective Date: Your promotion effective date will be January 28, 2019.
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-
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Post-offer drug screen;
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Provision of the documents necessary to establish your identification and work eligibility under the Immigration Control and Reform Act of 1986;
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Non-Competition and Non-Solicitation Agreement (enclosed), as accepted and agreed to by you without any modification to its covenants and provisions; and
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Background investigation and/or credit check, if required for your position. You will be provided with additional documentation to complete if either or both of these requirements apply to you.
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1.
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Base Salary: You will receive an annual base salary of $850,000 and you will be paid biweekly. Your job is exempt from minimum wage and overtime obligations under the Fair Labor Standards Act.
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2.
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Sign-on Payment: Contingent on a February 4, 2019, or earlier, start date, and as part of your acceptance of employment with Tyson Foods, you will receive a sign-on payment of
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3.
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Non-Bridging Payments: As we had originally represented that you would be eligible for bridging of service and this impacts your medical benefits, 401(k) match, and ESPP match eligibilities, we will provide you the following additional payments (less taxes and other applicable withholdings):
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A.
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$5,100, payable at the same time as your sign-on payment, as you will not be eligible for medical benefits on your first day of employment.
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B.
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$11,200 if you enroll in the Retirement Savings Plan with at least a 5% deferral rate effective with your benefits effective date. This payment will be made as soon as administratively possible after your benefits effective date.
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C.
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$21,250 if you enroll in the Stock Purchase Plan with at 10% of your salary effective with your benefits effective date. This payment will be made as soon as administratively possible after your benefits effective date.
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4.
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Annual Cash Incentive: You will be eligible to participate in Tyson Foods, Inc. Annual Incentive Plan. The current target annual incentive for your role is 110% of your base salary. Annual incentive payments are made under the plan then in effect, and subject to the discretion of senior management along with an assessment of company, business unit/function, and individual performance. You will be eligible for prorated participation for fiscal year 2019 if you begin your employment with Tyson Foods by June 30, 2019. You must be an active Tyson Foods employee on the payment date to receive any payout.
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5.
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Long Term Stock Incentive: You are eligible to participate in the Tyson Foods long-term incentive (LTI) program. The current LTI target award for your level is $2,100,000, currently in a mix of non-qualified stock options, restricted stock and performance shares. All award grants will follow the normal program guidelines and mix aligned with your level in the organization at the time of the grant and are made at the discretion of the company.
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6.
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Sign-On Restricted Stock Award: Contingent on a February 4, 2019, or earlier, start date, and as you will not be eligible for a Long Term Stock Incentive Award, until the grant for FY2020, expected to be granted in November 2019, you are eligible to receive a sign-on Restricted Stock award in the amount of $1,400,000. This award will be granted on the next quarterly off-cycle grant date following your start date, in accordance with the off-cycle stock grant provisions at Tyson Foods, and will vest 100% on the three (3) year anniversary of the grant date pursuant to the terms of the award agreement.
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7.
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Special Restricted Stock Award: As part of your acceptance of employment with Tyson Foods, you will receive a receive a one-time Special Restricted Stock award in the amount of $2,000,000. This award will be granted on the next quarterly off-cycle grant date following your start date, in accordance with the off-cycle stock grant provisions at Tyson Foods, and will vest 100% on the three (3) year anniversary of the grant date pursuant to the terms of the award agreement. However, contrary to other off-cycle stock
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8.
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Stock Purchase Plan: Upon reaching your benefits effective date, you will be eligible to participate in the Tyson Foods, Inc. Employee Stock Purchase Plan. You may contribute (on an after-tax basis) up to 20% of your base salary to this plan. After one year of service, Tyson Foods will match 25% of the first 10% of base salary you contribute. This plan provides for 100% immediate vesting of both your contributions and the company match.
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9.
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Retirement Savings Plan – 401(k): Upon reaching your benefits effective date, you will be eligible to participate in the Retirement Savings Plan of Tyson Foods, Inc., which includes a 401(k) feature. After one year of service, Tyson Foods will match 100% of the first 3% you contribute and 50% of the next 2% you contribute. You may contribute up to 60% of your eligible compensation to this plan until your contributions for the year reach the IRS maximum contribution or maximum compensation limits. This plan provides for 100% immediate vesting of both your contributions and the company match.
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10.
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Executive Savings Plan: If you are projected to reach the maximum IRS contribution limits in the Retirement Savings Plan (based on your contribution election to that plan) you can then begin deferring up to 60% of base pay into the Executive Savings Plan of Tyson Foods, a non-qualified deferred compensation plan. This plan is available to highly compensated employees, as defined by IRS regulations, and is available to those who wish to defer additional dollars over and above the IRS limits for qualified plans. You may also defer up to 100% of your annual cash incentive to the plan. All deferrals and payout elections must be elected during the annual election period each December prior to the deferral year. This plan provides company matching contributions in the same manner as the RSP. Additionally, as a member of the ELT, the Executive Savings Plan provides a 4% of your salary and AIP, as they are paid, contribution to your account.
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11.
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Employee Health, Life and LTD Benefits: Upon reaching your benefits effective date, you and your eligible family members will be eligible to participate in the Tyson Foods, Inc. Group Health Plan, including medical, dental, vision, and prescription drug coverage. Your premium amount will be deducted from your payroll check on a pre-tax basis. At the time you enroll in the plan, you will also be enrolled in company-paid life insurance and the accidental death and dismemberment plans, each in the amount of one (1) times your annual salary. You will also participate in the company-paid Executive long-term disability insurance program which provides a tax-free benefit of 60% of the sum of the following: base pay, annual cash incentive, and a portion of restricted stock and stock option value.
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12.
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Executive Rewards Allowance: Upon hire you will be eligible for the Executive Rewards Allowance, which will provide you with an annual cash allowance of $12,000 (paid $461.54 each pay period), prorated based on your start date. The allowance is an additional fringe benefit provided in recognition of the unique needs of an executive level team member
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13.
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Officer Life Benefits: Upon reaching your benefits effective date, you will be eligible for additional company-paid life insurance in the amount of two (2) times your annual base salary (subject to limitations in accordance with the plan). This is in addition to the one (1) times annual salary life under the Group Life Plan.
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14.
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Vacation: You will receive four (4) weeks of vacation upon reaching your benefits effective date, then four (4) weeks on your annual service anniversary date thereafter.
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15.
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Start Date: This will be a mutually agreed upon date and time by the hiring manager and you; provided that, all contingencies and requirements described in this offer letter must be completed (as determined by Tyson Foods) before your employment may commence.
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/s/ Noel White
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Noel White
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President and Chief Executive Officer
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/s/ Stewart Glendinning
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Stewart Glendinning
|
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Executive Vice President and Chief Financial Officer
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/s/ Noel White
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Noel White
|
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President and Chief Executive Officer
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February 7, 2019
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/s/ Stewart Glendinning
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Stewart Glendinning
|
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Executive Vice President and Chief Financial Officer
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February 7, 2019
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