Exhibit 10.1

 

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE TYSON FOODS, INC. 2000 STOCK INCENTIVE PLAN

 

THIS AWARD (the “Award”) is made on the Grant Date set forth below by Tyson
Foods, Inc., a Delaware corporation (the “Company”), to Richard L. Bond (the
“Optionee”) SSN _________________.

 

Upon and subject to the Terms and Conditions applicable hereto and incorporated
herein by reference, the Company hereby awards to Optionee a nonqualified stock
option (the “Option”), as described below, to purchase the Option Shares.

 

 

A.

Grant Date: November 17, 2006.

 

 

B.

Type of Option: Nonqualified Stock Option.

 

 

C.

Plan under which Option is granted: Tyson Foods, Inc. 2000 Stock Incentive Plan
(“Plan”).

 

 

D.

Option Shares: 500,000 shares of the Company’s $.10 par value Class A common
stock (the “Common Stock”), subject to adjustment as provided in the Terms and
Conditions.

 

 

E.

Exercise Price: $15.37 per share, subject to adjustment as provided in the Terms
and Conditions.

 

 

F.

Option Period: Only after the Option has vested pursuant to paragraph G below,
the Option may be exercised during the Option Period. The Option Period
commences on the Grant Date and ends, subject to earlier termination as provided
in the Terms and Conditions, on the earliest of the following:

(i) the tenth (10th) anniversary of the Grant Date;

(ii) three months following the date the Optionee ceases to be an employee of
the Company or any Affiliate for any reason other than death, Disability, or
retirement after attaining at least age 62; or

(iii) one (1) year following the date the Option Shares vest if the Optionee
ceases to be an employee of the Company or any Affiliate due to death,
Disability, or retirement after attaining at least age 62.

Provided, however, that the Option may only be exercised as to the vested Option
Shares determined pursuant to the Vesting Schedule below. Note that other
restrictions to exercising the Option, as described in the Terms and Conditions,
may apply.

 

 

G.

Vesting Schedule: The Option Shares shall become vested Option Shares on
December 31, 2009 if the following two conditions are met:

(i) The Company’s 2009 fiscal year earnings per share, based on the operating
earnings, are at least $1.34. To determine operating earnings per share, the
Company will take the reported GAAP earnings per share (“Reported EPS”) and will
adjust the Reported EPS for the same items used to calculate fiscal year 2009
adjusted EBIT for annual bonus determination. To make such adjustments, the
Company will use a 36% effective tax rate and the same number of shares used to
calculate Reported EPS. If the capitalization structure of the Company changes
(increase or decrease in the number of issued shares of Common Stock) between
the Grant Date and the date Reported EPS is calculated for the 2009 fiscal year,
the Company will make a Reported EPS calculation for purposes of this Award that
is based on the same number of shares of Common Stock used in calculating
earnings per share for the first quarter of the Company’s 2007 fiscal year. Such
earnings per share calculation will then be adjusted in the manner described
above and used to determine if the 2009 fiscal year operating earnings per share
are at least $1.34; and

(ii) The Optionee remains continuously employed by the Company or any Affiliate
through December 31, 2009, or the Optionee’s employment terminates prior to the
date because of the Optionee’s death, Disability, or retirement after attaining
at least age 62.

 

Notwithstanding the foregoing, the following additional vesting rules shall
apply:

 

(a)

Upon a Change of Control (defined in Section 5(b) of the Terms and Conditions)
during the Option Period, all unvested Option Shares granted under this Award
shall become vested Option Shares sixty (60) days after the Change of Control.

 

(b)

Upon a termination of employment prior to December 31, 2009 by the Company at
the Company’s election other than for Cause or by Optionee for Good Reason, all
unvested Option Shares granted under this Award shall become vested Option
Shares.

 

 

 

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IN WITNESS WHEREOF, the Company has executed and sealed this Award as of the
Grant Date set forth above.

 

 

TYSON FOODS, INC.:

 

 

 

By:

 

 

Title:

 

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TERMS AND CONDITIONS TO THE

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE

TYSON FOODS, INC. 2000 STOCK INCENTIVE PLAN

 

1.            Exercise of Option. Subject to the provisions of the Plan and the
Award, which is made pursuant to the Plan, and subject also to these Terms and
Conditions, which are incorporated in and made a part of the attached Award:

 

(a)           The Option may be exercised with respect to all or any portion of
the vested Option Shares at any time during the Option Period by the delivery to
the Company, at its principal place of business, of (i) a notice of exercise in
substantially the form required by the Committee (as defined in the Plan) (a
form of which is available from the Company), which shall be actually delivered
to the Company before the Optionee desires to exercise all or any portion of the
Option; and (ii) payment to the Company of the Exercise Price multiplied by the
number of shares being purchased (the “Purchase Price”) in the manner provided
in Subsection (b).

 

(b)           The Purchase Price shall be paid in full upon the exercise of an
Option and no Option Shares shall be issued or delivered until full payment
therefor has been made. Payment of the Purchase Price for all Option Shares
purchased pursuant to the exercise of an Option shall be made in cash, certified
check, or, alternatively, as follows:

 

(i)     by delivery to the Company of a number of shares of Common Stock which
have been owned by the Optionee for at least six (6) months prior to the date of
the Option’s exercise, having a Fair Market Value, as determined under the Plan,
on the date of exercise either equal to the Purchase Price or in combination
with cash to equal the Purchase Price;

 

(ii)    subject to applicable securities laws, by receipt of the Purchase Price
in cash from a broker, dealer or other “creditor” as defined by Regulation T
issued by the Board of Governors of the Federal Reserve System following
delivery by the Optionee to the Committee of instructions in a form acceptable
to the Committee regarding delivery to such broker, dealer or other creditor of
that number of Option Shares with respect to which the Option is exercised; or

 

 

(iii)

by any combination of the foregoing.

 

Upon acceptance of such notice and receipt of payment in full of the Purchase
Price and any tax withholding liability, the Company shall cause to be issued a
certificate representing the Option Shares purchased.

 

2.            Withholding. The Optionee must satisfy federal, state and local,
if any, withholding taxes imposed by reason of the exercise of the Option either
by paying to the Company the full amount of the withholding obligation (i) in
cash; (ii) by tendering shares of Common Stock which have been owned by the
Optionee for at least six (6) months prior to the date of exercise having a Fair
Market Value equal to the tax withholding obligation; (iii) by electing,
irrevocably and in substantially the form required by the Committee (the
“Withholding Election”), to have the smallest number of whole shares of Common
Stock which, when multiplied by the Fair Market Value of the Common Stock as of
the date the Option is exercised, is sufficient to satisfy the minimum required
amount of tax withholding

 

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obligations; or (iv) by any combination of the above. Optionee may make a
Withholding Election only if the following conditions are met:

 

(a)    the Withholding Election is made on or prior to the date on which the
amount of tax required to be withheld is determined (the “Tax Date”) by
executing and delivering to the Company a properly completed Notice of
Withholding Election in substantially the form required by the Committee (a form
of which is available from the Company); and

 

(b)    any Withholding Election will be irrevocable; however, the Committee may,
in its sole discretion, disapprove and give no effect to the Withholding
Election.

 

3.             Rights as Shareholder. Until the stock certificates reflecting
the Option Shares accruing to the Optionee upon exercise of the Option are
issued to the Optionee, the Optionee shall have no rights as a shareholder with
respect to such Option Shares. The Company shall make no adjustment for any
dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate,
except as the Plan or this Award otherwise provides.

 

4.            Restriction on Transfer of Option. Except as otherwise expressly
permitted by the Committee in writing, the Option evidenced hereby is
nontransferable other than by will or the laws of descent and distribution, and,
shall be exercisable during the lifetime of the Optionee only by the Optionee
(or in the event of his disability, by his legal representative) and after his
death, only by the legal representative of the Optionee’s estate.

 

 

5.

Changes in Capitalization.

 

(a)          The number of Option Shares and the Exercise Price shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or combination of shares or
the payment of a stock dividend (in excess of two percent (2%)) in shares of
Common Stock to holders of outstanding shares of Common Stock or any other
increase or decrease in the number of shares of Common Stock outstanding
effected without receipt of consideration by the Company.

 

(b)          If the Company shall be the surviving corporation in any merger,
consolidation, reorganization or other change in the corporate structure of the
Company or the Common Stock or in the event of an extraordinary dividend
(including a spin-off), the Optionee shall be entitled to purchase or receive
the number and class of securities to which a holder of the number of shares of
Common Stock subject to the Option at the time of such transaction would have
been entitled to receive as a result of such transaction, and a corresponding
adjustment shall be made in the Exercise Price. Upon the occurrence of a Change
in Control (defined below) all of the unvested Options granted hereunder will
vest sixty (60) days after the Change in Control event occurs (unless vesting
earlier pursuant to the terms of the award agreement). If the Optionee is
terminated by the Company other than for egregious circumstances during such
sixty (60) day period, all of the unvested Options granted hereunder will vest
on the date of termination. For purposes of this Agreement, the term "Change in
Control" shall have the same meaning as the term "Change in Control" as set
forth in the Plan; provided, however, that a Change in Control shall not include
any event as a result of which (a) Don Tyson; (b) individuals related to Don
Tyson by blood, marriage or adoption; and/or (c) any entities (including, but
not limited to, a partnership, corporation,

 

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trust or limited liability company) in which one or more individuals described
in clauses (a) and (b) hereof possess over fifty percent (50%) of the voting
power or beneficial interests of such entities continue to possess, immediately
after such event, over fifty percent (50%) of the voting power in the Company
or, if applicable, successor entity.  The Committee shall have the sole
discretion to interpret the foregoing provisions of this paragraph.

 

(c)           In lieu of any adjustment or permitted exercises of the Option
contemplated by Subsection (b) above, the Committee retains the discretion in
the event of any transaction contemplated by Subsection (b) to cancel the vested
Option in consideration for a payment to the Optionee equal to the positive
difference between the then aggregate Fair Market Value of, and the aggregate
Exercise Price for, those vested Option Shares which have not been exercised as
of the effective date of such transaction. Such payment may be made in shares of
Common Stock or in cash or in any combination thereof.

 

(d)          The existence of the Plan and this Award shall not affect in any
way the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any issue of debt or
equity securities having preferences or priorities as to the Common Stock or the
rights thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other corporate
act or proceeding.

 

6.            Special Limitations on Exercise. Any exercise of the Option is
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by the Option upon any securities exchange or under any state or federal
law is necessary or desirable as a condition of or in connection with the
delivery of shares thereunder, the delivery of any or all shares pursuant to the
Option may be withheld unless and until such listing, registration or
qualification shall have been effected. The Optionee shall deliver to the
Company, prior to the exercise of the Option, such information, representations
and warranties as the Company may reasonably request in order for the Company to
be able to satisfy itself that the Option Shares being acquired in accordance
with the terms of an applicable exemption from the securities registration
requirements of applicable federal and state securities laws.

 

7.             Legend on Stock Certificates. The Company may endorse any legends
on certificates evidencing Option Shares that it deems necessary and advisable
or as may be required to reflect any restrictions provided for herein or
otherwise required by applicable federal or state securities laws.

 

8.             Governing Laws. This Award shall be construed, administered and
enforced according to the laws of Delaware; provided, however, no option may be
exercised except, in the reasonable judgment of the Board of Directors, in
compliance with exemptions under applicable state securities laws of the state
in which the Optionee resides, and/or any other applicable securities laws.

 

9.            Successors. This Award shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors and permitted assigns of
the parties.

 

10.         Notice. Except as otherwise specified herein, all notices and other
communications under this Award shall be in writing and shall be deemed to have
been given if personally delivered or if sent by registered or certified United
States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other

 

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address to which notices shall be sent by giving notice of the address to the
other parties in the same manner as provided herein.

 

11.         Severability. In the event that any one or more of the provisions or
portion thereof contained in this Award 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 provisions of this Award, and this Award shall be
construed as if the invalid, illegal or unenforceable provision or portion
thereof had never been contained herein.

 

12.         Certain Breaches of Employment Agreement. Notwithstanding anything
to the contrary herein, if, at any time, the Company determines that the
Optionee has breached any of the terms, provisions and restrictions imposed upon
the Optionee under any employment agreement between the Company and Optionee, or
any provision thereof, then in effect (the “Employment Agreement”), all of the
Option Shares shall be forfeited. Such forfeiture shall occur without limiting
the Company’s other rights and remedies available under the Employment
Agreement.

 

13.         Entire Agreement. Subject to the terms and conditions of the Plan,
this Award expresses the entire understanding and agreement of the parties.

 

14.         Violation. Any transfer, pledge, sale, assignment, or hypothecation
of the Option or any portion thereof shall be a violation of the terms of this
Award and shall be void and without effect.

 

15.         Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Award.

 

16.         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, the party or parties who are thereby aggrieved shall have the right to
specific performance and 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.

 

17.         No Right to Continued Employment. Neither the establishment of the
Plan nor the award of Option Shares hereunder shall be construed as giving the
Optionee the right to continued employment.

 

18.         Defined Terms. Any capitalized terms herein not otherwise defined
shall have the meanings set forth for such terms in the Plan.

 

 

 

 

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