Securities and Exchange Commission v. Tyson Foods, et al.

 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION    
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  51625 / April 28, 2005 
 
 
ADMINISTRATIVE PROCEEDING 
File No.  
3-11917
 
 
                                                                  )                                                                                                                                    
In the Matter of )     ORDER INSTITUTING CEASE-AND-DESIST 
 )     PROCEEDINGS, MAKING FINDINGS, AND 
TYSON FOODS, INC. and  
DONALD TYSON, 
) 
) 
IMPOSING A CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 21C OF THE 
                                                                  )                                                                  SECURITIES                                                                  EXCHANGE ACT OF 1934 
Respondents.                                            )                                                                                        
)          
 
I. 
 
The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted against Tyson Foods, Inc. (“Tyson 
Foods”) and Donald Tyson (“Mr. Tyson” or “Don Tyson”) (collectively “Respondents”) 
pursuant to Section 21C of the Securities Exchange Act of 1934 (the “Exchange Act”). 
 
II. 
 
In anticipation of the institution of these proceedings, each of the Respondents has 
submitted an Offer of Settlement (“Offer”) that the Commission has determined to accept.  
Solely for the purposes of these proceedings and any other proceeding brought by or on behalf of 
the Commission or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over them and the subject matter of 
these proceedings, which are admitted, Respondents consent to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order 
Pursuant to Section 21C of the Securities Exchange Act of 1934 (“Order”), as set forth below.
1
  
                                                
 
1
  In a separate civil action filed simultaneously with this proceeding, Tyson Foods and Don Tyson 
each separately consented to the entry of a judgment by the U.S. District Court for the District of 
Columbia pursuant to Section 21(d) of the Exchange Act ordering Tyson Foods and Don Tyson to pay 
civil penalties of $1.5 million and $200,000, respectively.  SEC v. Tyson Foods, Inc. and Donald Tyson, 
Civ. Action No. (05 0841 D.D.C.) (JDB). 
 

 
 
2
 
III. 
 
On the basis of this Order and Respondents’ Offers, the Commission finds
2
 that: 
 
A.   RESPONDENTS 
 
1. Tyson Foods is a Delaware corporation with its principal offices in Springdale, 
Arkansas.  Founded in 1935, Tyson Foods is a processor and marketer of chicken, beef, and 
pork.  The company’s revenue for the fiscal year ended October 2, 2004, exceeded $26 billion.  
Tyson Foods’ Class A common stock is registered with the Commission pursuant to Section 
12(b) of the Exchange Act and is listed on the New York Stock Exchange under the symbol 
“TSN.” 
 
2. Donald Tyson, age 74, became the company’s president in 1966, and served as 
CEO and chairman from 1967 to 1991.  He served as chairman from 1991 to 1995 and as senior 
chairman from 1995 to 2001.  He retired as senior chairman in October 2001.  He is currently a 
director of the company, a position he has held since 1952, and also serves on the executive 
committee of the company’s board of directors. 
 
B.        SUMMARY        
  
3. In proxy statements filed with the Commission from 1997 to 2003, Tyson Foods 
made misleading disclosures of perquisites and personal benefits provided to Don Tyson.  The 
company also failed to maintain adequate internal controls over his personal use of company 
assets and the disclosure of those perquisites in its proxy statements.   
 
4. For the five years prior to his retirement as senior chairman (1997-2001), the 
company failed to disclose over $1 million
3
 of perquisites provided to Mr. Tyson, used the 
expression “travel and entertainment” to describe perquisites that could not properly be so 
characterized, and failed to disclose separately or quantify properly certain other benefits.  From 
2002 to 2003, the company used the same misleading terms “travel and entertainment” to 
describe the continuation of his perquisites pursuant to a retirement agreement and failed to 
disclose fully the nature and scope of those benefits.  Finally, due to internal control failures 
throughout most of 1997 to 2003, the company provided or paid for various personal benefits 
totaling approximately $1.5 million that were neither raised with nor authorized by either the 
compensation committee or the board of directors.   
 
5. Don Tyson, who signed the annual reports that incorporated the proxy statements 
for each fiscal year from 1997 to 2003, was a cause of the company’s disclosure failures.  
                                                
 
2
  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 
 
3
  Of this amount, $424,121 was not disclosed because of internal controls failures at the company, 
and $596,656 was disclosed as “performance-based bonuses” instead of as perquisites. 
  

 
 
3
Among other things, in each year from 1997 to 2003, he signed questionnaires used to prepare 
the company’s proxy statements that failed to identify or quantify various perquisites.  Before 
signing them, he failed to read the questionnaires or take action to ensure the accuracy of the 
company’s disclosure of his perquisites, and he failed to review the proxy statements before he 
signed the annual reports into which they were incorporated.  
 
C.        FACTS 
 
6. Tyson Foods started out as a small independent chicken business in rural 
Arkansas.  During Don Tyson’s tenure at Tyson Foods, the company’s revenue increased from 
$51 million to more than $10 billion.  Tyson Foods’ board of directors greatly valued Don 
Tyson’s leadership and continued service to the company.  The company had a long history of 
paying a substantial portion of Don Tyson’s annual compensation in the form of perquisites and 
personal benefits.  When the company was smaller than it is today, it would pay for certain 
personal expenses and send a company employee to his home to mow his lawn or fill his car with 
gas.  As the company grew, it gradually provided more perquisites to Mr. Tyson and began 
providing certain perquisites and personal benefits to Don Tyson’s wife, his daughters and three 
individuals with whom he had close personal relationships (collectively referred to herein as 
“family” and/or “friends”). 
 
1. Perquisites Provided and Attributed to Don Tyson from 1997-2001 
 
7. While Don Tyson was employed as senior chairman from 1997 to 2001, Tyson 
Foods provided him with the following, which totaled approximately $3 million: 
 
• $689,016 in personal expenses for him and two of his friends.  These personal expenses 
were paid through cash advances from the company’s accounts, directly billed to the 
company or charged to three company credit cards that had been issued in the mid 1990s 
to Mr. Tyson and two of his friends.  The credit card bills were sent directly to a Tyson 
Foods subsidiary and were paid in full by the company.
4
  The cards were canceled during 
the course of the Commission’s investigation in this matter.  Among other things, these 
personal expenses included a $20,000 purchase for oriental rugs, an $18,000 purchase for 
antiques, a $15,000 vacation in London, an $8,000 horse, and other substantial purchases 
of clothing, jewelry, artwork, vacations and theater tickets;   
 
• $464,132 in personal use by him and his family and friends of company-owned homes in 
the English countryside and in Cabo San Lucas, Mexico.  But for a 120-night annual limit 
on his usage of the English home, the only limitation imposed on how Mr. Tyson and his 
family and friends used the homes was that business use would take priority over 
personal use.  Company records reflect occasions when Don Tyson’s friends hosted their 
                                                
 
4
  These credit cards remained active despite the institution in 1998 of a company-wide policy 
requiring that company-billed credit cards either be cancelled or that the company be given access to a 
personal account from which it could draw funds to pay the credit card bills.  Don Tyson was aware of the 
company’s policy.  Mr. Tyson provided the company with access to his checking account to pay these 
bills, however, as a result of internal control failures at the company, it continued to pay the expenses 
incurred on the company credit cards by Mr. Tyson and two of his friends. 

 
 
4
friends and family for vacations in the English home and used the company-paid 
chauffeur, cook and housekeeper at that home.  His friends also vacationed at the 
company’s home and used the company’s crewed boat in Cabo San Lucas, Mexico;  
 
• $426,086
5
 of personal use of company-owned aircraft by him and his family and friends.  
Don Tyson had virtually unlimited access to Tyson Foods’ aircraft.  The only limitation 
on Don Tyson’s access to Tyson Foods’ aircraft was that business use would take priority 
over personal use.  Mr. Tyson’s family and friends regularly used the company’s aircraft 
for personal travel with and without him on board;   
 
• $203,675 in housekeeping provided by company employees or persons paid by the 
company at five different homes where Don Tyson and his family and friends lived 
and/or vacationed; 
 
• $84,000 in lawn maintenance at five different homes where he and his family and friends 
lived; 
 
• $46,110 to maintain nine automobiles owned and used by him and his family and friends; 
 
• $36,554 in telephone services for him and his family and friends; 
 
• $15,000 in Christmas gift certificates that were provided to Don Tyson’s family and 
friends; and  
 
• $1,072,699 to cover Don Tyson’s personal income tax liability associated with his receipt 
of these benefits.   
 
In addition, Tyson Foods provided various perquisites to Mr. Tyson and his family and friends 
that had de minimus incremental cost to the company.  These included personal use of the 
company’s stadium skyboxes, personal use of a compound of lake homes and monitoring of 
security systems at homes where Mr. Tyson and his family and friends lived. 
 
2. Disclosures of Don Tyson’s Perquisites from 1997-2001 
 
8. Disclosures about Don Tyson’s perquisites and personal benefits for each of the 
fiscal years from 1997 to 2001 were made in footnotes to the “other annual compensation” 
column of the summary compensation tables of Tyson Foods’ proxy statements for those years.  
Those footnotes described his perquisites as “travel and entertainment costs and amounts 
reimbursed for estimated income tax liability related thereto,” and identified aggregate figures 
for the “travel and entertainment costs” and the related income tax liability, respectively.  These 
                                                
 
5
  The company calculated the value of personal aircraft usage using the method required for 
imputation of income for tax purposes, known as Standard Industry Fare Level, or SIFL, rather than the 
aggregate incremental cost method required by Instruction 2 to Item 402(b)(2)(iii)(C) of Regulation S-K 
of the Exchange Act for disclosure of perquisites. 

 
 
5
proxy statements were incorporated by reference in the company’s annual reports filed on Forms 
10-K for those fiscal years, which were signed by Mr. Tyson and others.  
 
9. Tyson Foods omitted over $1 million of Don Tyson’s perquisites from disclosure 
in these proxy statements filed with the Commission due to internal control failures and a 
strategy devised by the company’s tax accountant to preserve the company’s tax deduction for 
Mr. Tyson’s compensation that resulted in mischaracterizing portions of his perquisites as a 
“performance-based bonus.” 
 
10. Specifically, $424,121 in perquisites (representing mostly the value of the above-
described housekeeping, lawn maintenance, automobile maintenance and telephone services) 
was omitted from disclosure because in-house counsel responsible for preparing proxy 
statements was unaware that Don Tyson was receiving those services.  Mr. Tyson signed annual 
director and officer (“D&O”) questionnaires that disclosed only that he received “travel and 
entertainment” and provided a total value of his annual perquisites as calculated by the 
company’s outside tax accountant.  He delegated responsibility for the accuracy of those 
questionnaires.  He did not read them before signing them and took no other action to determine 
whether his responses were complete and accurate. 
 
11. An additional $596,656 of perquisites and the tax gross-up thereon, were omitted 
from the proxy statements’ disclosure of perquisites in 1998, 1999 and 2000 due to a tax strategy 
devised to permit the company to deduct Don Tyson's entire compensation.  Section 162(m) of 
the Internal Revenue Code limits the deductibility of executive compensation to $1 million 
unless the compensation is “performance based,” which means the compensation is payable “on 
account of the attainment of one or more performance goals.”  The company had adopted 
(effective fiscal 1995) a shareholder approved senior executive performance bonus plan to 
comply with Section 162(m).  For each of the years 1998, 1999 and 2000, the amount of Mr. 
Tyson’s salary plus perquisites exceeded $1 million.  For those years, the company’s tax 
accountant advised the compensation committee to award Don Tyson a bonus under the senior 
executive performance bonus plan in the amount by which his salary plus perquisites exceeded 
$1 million.  Mr. Tyson signed D&O questionnaires for the years 1998, 1999 and 2000 that 
incorrectly stated that he had received bonuses of $86,656 (1998), $310,000 (1999) and 
$200,000 (2000) rather than disclosing that he had received perquisites valued at such amounts.  
Those perquisite amounts were then improperly disclosed in the proxy statements as 
performance-based bonuses by moving amounts from the “other compensation” column (used to 
disclose perquisites) to the “bonus” column of the summary compensation table.  This resulted in 
underreporting Mr. Tyson’s perquisites in each of those years by $86,656, $310,000 and 
$200,000 in 1998, 1999 and 2000, respectively. 
 
12. Of the perquisites the company did disclose, the company disclosed them as 
“travel and entertainment” costs, as noted above.  That description was inaccurate because Don 
Tyson and his family and friends received over $372,539 in personal expenses that could not be 
characterized as “travel” or “entertainment.”  Also, in many years, the cost of these personal 
expenses, use of company homes, personal use of company aircraft and/or residential services 
exceeded 25% of the total perquisites.  However, these perquisites were not separately disclosed 

 
 
6
“by type and amount” in the footnotes to the summary compensation tables as required by the 
Commission’s rules.  See
 Regulation S-K, Item 402(b)(2)(iii)(C) and Instruction 1 thereto.
 
  
 
13. Due to the internal control failures, many of the perquisites described above were 
neither raised with nor authorized by Tyson Foods’ compensation committee or its board of 
directors.
6
  While the members of the compensation committee knew generally that Don Tyson 
received “travel and entertainment” in the form of his own personal use of company aircraft and 
homes and the dollar amount of Mr. Tyson’s annual perquisites, no one in company 
management, including Don Tyson, brought to the compensation committee’s or the full board’s 
attention any additional information about his other perquisites.  As a result, for example, the 
board members were unaware until the Commission’s investigation that the company was paying 
for substantial personal expenses incurred by Don Tyson and two of his friends.  They were also 
unaware of the regular use of company aircraft by Don Tyson’s family and friends while he was 
not on board.  They were also unaware until a review of executive perquisites by the company’s 
general counsel’s office in November 2002 (discussed in greater detail below) of the 
housekeeping, lawn maintenance, telephone services, and automobile maintenance provided to 
Don Tyson and his family and friends.   
 
3. Disclosure of Perquisites Provided Under Don Tyson’s Retirement 
Agreement and Perquisites Provided Following His Retirement  
 
14. Don Tyson retired as senior chairman in 2001.  He and Tyson Foods entered into 
a “Senior Executive Employment Agreement,” dated October 19, 2001 (the “Retirement 
Agreement”), which provided that he would receive certain consideration in return for his 
agreement to furnish “advisory services” to the company following his retirement as senior 
chairman.  The Retirement Agreement provided that Don Tyson would receive one million 
shares of restricted Class A common stock, $800,000 per year for ten years and “travel and 
entertainment costs, as well as his estimated income tax liability with respect thereto, consistent 
with past practices.”  The Retirement Agreement itself was filed as an exhibit to the company’s 
2001 Form 10-K.   
  
15. In its proxy statements filed in 2002 and 2003, Tyson Foods, in describing the 
Retirement Agreement, stated that Mr. Tyson would receive “travel and entertainment costs . . . 
consistent with past practices,” but made no other disclosures describing the full nature and 
scope of the perquisites that Don Tyson would receive in retirement.  Thus, for example, no 
disclosure was made that he and his family and friends would continue to receive many of the 
perquisites described above.  As with the company’s prior proxy statements, the terms “travel 
and entertainment” did not properly disclose some of the perquisites that he received, which 
could not be characterized as either “travel” or “entertainment.”  In addition, although the 
company disclosed that he would receive travel and entertainment costs and tax gross-ups 
thereon “consistent with past practices,” investors could not learn from the company’s 
previously-filed proxy statements the total costs of the benefits Mr. Tyson would receive in 
                                                
 
6
  The value of these perquisites was approximately $1.5 million.  During the course of the 
Commission’s investigation, Don Tyson voluntarily reimbursed the company more than $1.5 million.  In 
view of Don Tyson’s reimbursement, the Commission is not ordering him to pay disgorgement in this 
matter. 

 
 
7
retirement due to the omission of perquisites from the prior proxy statements.  In his first two 
years of retirement, he received $1.1 million in “travel and entertainment costs” and associated 
tax gross-ups, which was almost double what Tyson Foods reported for his last two years of 
employment as senior chairman ($585,281). 
 
16. In November 2002, the general counsel’s office at Tyson Foods conducted a 
review of executive perquisites.  In connection with that review, Don Tyson signed a list of 
perquisites that failed to describe adequately his use of certain company assets and omitted 
certain other perquisites that Tyson Foods was providing him and his friends and family.  While 
that list did state that he obtained personal use of the company’s aircraft and homes, it failed to 
indicate that Mr. Tyson made these corporate assets available to his family and friends for their 
personal use and that the company had paid for personal expenses for him and two of his friends.  
 
D.        VIOLATIONS        
 
 1. Tyson Foods Violated the Proxy Solicitation, Reporting Provisions 
and the Internal Control Provisions of the Exchange Act 
 
17. Tyson Foods violated the proxy solicitation and reporting provisions of the 
Exchange Act by filing with the Commission annual reports and proxy statements that failed to 
fully and accurately disclose the perquisites that Don Tyson received during his last five years as 
senior chairman and the perquisites to which he was entitled pursuant to his Retirement 
Agreement.   
 
18. Section 13(a) of the Exchange Act and Rule 13a-1 thereunder require all issuers 
with securities registered under Section 12 of the Exchange Act to file annual reports with the 
Commission on Form 10-K.  These reports must be complete and accurate in all material 
respects.  See
, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert. 
denied, 440 U.S. 913 (1979).  No showing of scienter is necessary to establish a violation of 
Section 13(a).  Id.
 at 1167. 
  
19. Section 14(a) of the Exchange Act requires registrants that solicit any proxy or 
consent or authorization in connection with any security registered pursuant to Section 12 of the 
Exchange Act (other than an exempted security), to comply with such rules as the Commission 
may promulgate.  Rule 14a-3 provides that no solicitation of a proxy may occur unless each 
person solicited is concurrently furnished or has previously been furnished with a proxy 
statement containing the information specified in Schedule 14A.  Rule 14a-9 prohibits, among 
other things, the use of proxy statements which omit to state any material fact necessary in order 
to make the statements therein not false or misleading.  Like Section 13(a) of the Exchange Act, 
no showing of scienter is required to establish a violation of Section 14(a) of the Exchange Act 
and Rules 14a-3 and 14a-9 thereunder.  See
, e.g., Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 
1281, 1299-1300 (2d Cir. 1973). 
 
20. Tyson Foods was required to fully and accurately disclose Don Tyson’s 
perquisites while he was employed as senior chairman from 1997 to 2001 and those to which he 
was entitled thereafter pursuant to his Retirement Agreement.  Item 11 of Form 10-K requires 

 
 
8
that registrants furnish the information required by Item 402 of Regulation S-K.  Similarly, Item 
8 of Schedule 14A, captioned “Compensation of Directors and Executive Officers,” requires that 
registrants set forth in the proxy statement the information required by Item 402 of Regulation S-
K if action is to be taken with respect to, among other things, election of directors.  Item 402 of 
Regulation S-K sets forth the required disclosures with respect to executive compensation.  The 
underlying purpose of the Item 402 disclosures is “to improve shareholders’ understanding of all 
forms of compensation paid to senior executives and directors.” Securities Act Release No. 6962
, 
Executive Compensation Disclosure (Oct. 16, 1992).  Proxy disclosures with respect to executive 
compensation “enhance shareholders’ ability to assess how well directors are representing their 
interests.” Id.
   
 
21. Item 402(b) of Regulation S-K requires disclosure of perquisites.  Disclosure is 
required for named executive officers when the value of “perquisites and other personal benefits, 
securities or property” exceeds the lesser of $50,000 or 10% of the total annual salary and bonus 
reported for the executive.  Two types of disclosures are required for each executive:  (1) the 
total dollar amount of the perquisites must be included in the summary compensation table; and 
(2) an additional footnote disclosure is required to specifically identify “by type and amount” 
each perquisite that exceeds 25% of the total perquisites reported for the executive. 
 
22. In proxy statements filed for fiscal years 1997 to 2001, Tyson Foods made 
misleading disclosures of the provision of personal benefits and perquisites to Don Tyson and 
otherwise failed to comply with Item 402(b).   The footnote description of Don Tyson’s 
perquisites as “travel and entertainment costs” was misleading because, among other things, Don 
Tyson and his family and friends received numerous perquisites that could not be considered 
travel or entertainment.  In addition, the total perquisites disclosed for Don Tyson during this 
period omitted more than $1 million in perquisites due to internal control failures and the 
company’s disclosure of portions of Don Tyson’s perquisites as performance-based bonuses in 
1998, 1999 and 2000.  Tyson Foods also failed to specifically identify by type and amount each 
of Mr. Tyson’s perquisites that exceeded 25% of his total perquisites, and it incorrectly valued 
Mr. Tyson’s personal aircraft usage using the tax or SIFL method instead of using the aggregate 
incremental cost method required by Instruction 2 to Item 402(b)(2)(iii)(C).   
 
23. Item 402(h)(2) of Regulation S-K requires registrants to describe the “terms and 
conditions” of any compensatory plan or arrangement that results from the executive officer’s 
retirement if the amount involved exceeds $100,000.  The purpose of Item 402(h) is to provide 
“shareholders ... a clear interest in knowing what contractual commitments the board has made 
on behalf of the registrant, both with respect to present inducements to join the registrant’s top 
management and future promises.”  Tyson Foods’ proxy statements for fiscal years 2002 and 
2003 did not fully and accurately describe the substantial perquisites that Don Tyson would 
receive as part of his retirement arrangement.  In addition, the company’s disclosure of his 
entitlement in retirement to “travel and entertainment” costs “consistent with past practice” was 
misleading because, as previously discussed, many of those benefits could not be characterized 
as travel or entertainment and because, as previously discussed, the prior disclosures understated 
what he actually received in perquisites while he was employed. 
 

 
 
9
24. Section 13(b)(2)(B) of the Exchange Act requires registrants to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances 
that: (1) transactions are executed in accordance with management's general or specific 
authorization; (2) transactions are recorded as necessary to permit preparation of financial 
statements in conformity with generally accepted accounting principles or any other criteria 
applicable to such statements, and to maintain accountability for assets; (3) access to assets is 
permitted only in accordance with management's general or specific authorization; and (4) the 
recorded accountability for assets is compared with the existing assets at reasonable intervals and 
appropriate action is taken with respect to any differences.  Like Section 13(a), there is no 
scienter requirement to establish a violation of the internal controls provisions in Section 13(b). 
 
25. Tyson Foods failed to devise and maintain a system of internal accounting 
controls over personal use of assets sufficient to detect, prevent, or account properly for Don 
Tyson’s and his family’s and friends’ use of company assets.  Don Tyson received $424,121 in 
perquisites that went undisclosed because Tyson Foods’ proxy reporting process failed to 
identify them.  Moreover, Mr. Tyson received approximately $1.5 million in personal benefits 
and perquisites (including gross-up payments for tax purposes) both while he was employed and 
during his retirement that had not been raised with or authorized by the compensation committee 
or the board of directors.  As a result of its failure to maintain a system of internal accounting 
controls that captured all perquisites provided to Mr. Tyson and that informed the compensation 
committee of such perquisites, Tyson Foods failed to fully and accurately disclose Don Tyson’s 
personal benefits and perquisites in the company’s proxy statements during his tenure as senior 
chairman and in connection with his retirement, as required by Items 402(b) and 402(h) of 
Regulation S-K.  
 
26. Based on the foregoing, Tyson Foods violated Sections 13(a), 13(b)(2)(B) and 
14(a) of the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 thereunder.   
2. Don Tyson Was a Cause of Tyson Foods’ Proxy Solicitation and 
Reporting Violations  
27. Don Tyson was a cause of Tyson Foods’ violations of Sections 13(a) and 14(a) of 
the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 thereunder.   
 
28. During his tenure as senior chairman from 1997 through 2001, Don Tyson’s 
actions and omissions were a cause of Tyson Foods’ misleading disclosures of his perquisites 
and personal benefits.  Although he signed annual questionnaires that purported to list all 
company-provided perquisites that he received, his responses disclosed only that he received 
“travel and entertainment” from the company.  Mr. Tyson also signed the company’s Forms 10-
K, which incorporated by reference the company’s proxy statements.  Don Tyson did not read 
those questionnaires or the proxy statements incorporated into the company’s Forms 10-K before 
signing them, and he failed to take action to ensure the accuracy of the company’s disclosures of 
his perquisites.  Instead, he assigned to others the responsibility for compiling the information to 
be included in the responses to the questionnaires.  However, Don Tyson was the only individual 
who possessed certain information necessary to accurately complete the questionnaires. 
 

 
 
10
29. Don Tyson was also a cause of the company’s misleading disclosures of his 
retirement perquisites in its 2002 and 2003 proxy statements.  In those years, he provided the 
same incomplete list of his perquisites in questionnaires and, in addition, separately provided in 
connection with the company’s review of executive perquisites by its general counsel’s office an 
incomplete list of perquisites that he had received for 2002.  That list omitted the fact that the 
company had paid for personal expenses for him and two of his friends and had provided 
housekeeping, lawn maintenance, automobile maintenance and telephone services to him and his 
family and friends. 
 
IV. 
 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondents’ Offers. 
 
Accordingly, it is hereby ORDERED that: 
 
Respondent Tyson Foods cease and desist from committing any violations and any future 
violations of Sections 13(a), 13(b)(2)(B) and 14(a) of the Exchange Act and Rules 13a-1, 14a-3 
and 14a-9 thereunder. 
 
Respondent Don Tyson cease and desist from causing any violations and any future 
violations of Sections 13(a) and 14(a) of the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 
thereunder. 
 
 
By the Commission. 
 
 
Jonathan G. Katz 
Secretary  

UNITED STATES OF AMERICA 
Before the 

SECURITIES AND EXCHANGE COMMISSION    
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  51625 / April 28, 2005 
 
 
ADMINISTRATIVE PROCEEDING 
File No.  
3-11917
 
 
 )  
In the Matter of ) ORDER INSTITUTING CEASE-AND-DESIST 
 ) PROCEEDINGS, MAKING FINDINGS, AND 
TYSON FOODS, INC. and  
DONALD TYSON, 

) 
) 

IMPOSING A CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 21C OF THE 

 ) SECURITIES EXCHANGE ACT OF 1934 
Respondents. )  

)  
 

I. 
 

The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted against Tyson Foods, Inc. (“Tyson 
Foods”) and Donald Tyson (“Mr. Tyson” or “Don Tyson”) (collectively “Respondents”) 
pursuant to Section 21C of the Securities Exchange Act of 1934 (the “Exchange Act”). 
 

II. 
 

In anticipation of the institution of these proceedings, each of the Respondents has 
submitted an Offer of Settlement (“Offer”) that the Commission has determined to accept.  
Solely for the purposes of these proceedings and any other proceeding brought by or on behalf of 
the Commission or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over them and the subject matter of 
these proceedings, which are admitted, Respondents consent to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order 
Pursuant to Section 21C of the Securities Exchange Act of 1934 (“Order”), as set forth below.1  
                                                 
1  In a separate civil action filed simultaneously with this proceeding, Tyson Foods and Don Tyson 
each separately consented to the entry of a judgment by the U.S. District Court for the District of 
Columbia pursuant to Section 21(d) of the Exchange Act ordering Tyson Foods and Don Tyson to pay 
civil penalties of $1.5 million and $200,000, respectively.  SEC v. Tyson Foods, Inc. and Donald Tyson, 
Civ. Action No. (05 0841 D.D.C.) (JDB). 

 



 

 2

 
III. 

 
On the basis of this Order and Respondents’ Offers, the Commission finds2 that: 

 
A.   RESPONDENTS 
 
1. Tyson Foods is a Delaware corporation with its principal offices in Springdale, 

Arkansas.  Founded in 1935, Tyson Foods is a processor and marketer of chicken, beef, and 
pork.  The company’s revenue for the fiscal year ended October 2, 2004, exceeded $26 billion.  
Tyson Foods’ Class A common stock is registered with the Commission pursuant to Section 
12(b) of the Exchange Act and is listed on the New York Stock Exchange under the symbol 
“TSN.” 

 
2. Donald Tyson, age 74, became the company’s president in 1966, and served as 

CEO and chairman from 1967 to 1991.  He served as chairman from 1991 to 1995 and as senior 
chairman from 1995 to 2001.  He retired as senior chairman in October 2001.  He is currently a 
director of the company, a position he has held since 1952, and also serves on the executive 
committee of the company’s board of directors. 
 

B. SUMMARY 
  
3. In proxy statements filed with the Commission from 1997 to 2003, Tyson Foods 

made misleading disclosures of perquisites and personal benefits provided to Don Tyson.  The 
company also failed to maintain adequate internal controls over his personal use of company 
assets and the disclosure of those perquisites in its proxy statements.   

 
4. For the five years prior to his retirement as senior chairman (1997-2001), the 

company failed to disclose over $1 million3 of perquisites provided to Mr. Tyson, used the 
expression “travel and entertainment” to describe perquisites that could not properly be so 
characterized, and failed to disclose separately or quantify properly certain other benefits.  From 
2002 to 2003, the company used the same misleading terms “travel and entertainment” to 
describe the continuation of his perquisites pursuant to a retirement agreement and failed to 
disclose fully the nature and scope of those benefits.  Finally, due to internal control failures 
throughout most of 1997 to 2003, the company provided or paid for various personal benefits 
totaling approximately $1.5 million that were neither raised with nor authorized by either the 
compensation committee or the board of directors.   

 
5. Don Tyson, who signed the annual reports that incorporated the proxy statements 

for each fiscal year from 1997 to 2003, was a cause of the company’s disclosure failures.  

                                                 
2  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 

 
3  Of this amount, $424,121 was not disclosed because of internal controls failures at the company, 
and $596,656 was disclosed as “performance-based bonuses” instead of as perquisites. 

  



 

 3

Among other things, in each year from 1997 to 2003, he signed questionnaires used to prepare 
the company’s proxy statements that failed to identify or quantify various perquisites.  Before 
signing them, he failed to read the questionnaires or take action to ensure the accuracy of the 
company’s disclosure of his perquisites, and he failed to review the proxy statements before he 
signed the annual reports into which they were incorporated.  

 
C. FACTS 

 
6. Tyson Foods started out as a small independent chicken business in rural 

Arkansas.  During Don Tyson’s tenure at Tyson Foods, the company’s revenue increased from 
$51 million to more than $10 billion.  Tyson Foods’ board of directors greatly valued Don 
Tyson’s leadership and continued service to the company.  The company had a long history of 
paying a substantial portion of Don Tyson’s annual compensation in the form of perquisites and 
personal benefits.  When the company was smaller than it is today, it would pay for certain 
personal expenses and send a company employee to his home to mow his lawn or fill his car with 
gas.  As the company grew, it gradually provided more perquisites to Mr. Tyson and began 
providing certain perquisites and personal benefits to Don Tyson’s wife, his daughters and three 
individuals with whom he had close personal relationships (collectively referred to herein as 
“family” and/or “friends”). 

 
1. Perquisites Provided and Attributed to Don Tyson from 1997-2001 

 
7. While Don Tyson was employed as senior chairman from 1997 to 2001, Tyson 

Foods provided him with the following, which totaled approximately $3 million: 
 

• $689,016 in personal expenses for him and two of his friends.  These personal expenses 
were paid through cash advances from the company’s accounts, directly billed to the 
company or charged to three company credit cards that had been issued in the mid 1990s 
to Mr. Tyson and two of his friends.  The credit card bills were sent directly to a Tyson 
Foods subsidiary and were paid in full by the company.4  The cards were canceled during 
the course of the Commission’s investigation in this matter.  Among other things, these 
personal expenses included a $20,000 purchase for oriental rugs, an $18,000 purchase for 
antiques, a $15,000 vacation in London, an $8,000 horse, and other substantial purchases 
of clothing, jewelry, artwork, vacations and theater tickets;   

 
• $464,132 in personal use by him and his family and friends of company-owned homes in 

the English countryside and in Cabo San Lucas, Mexico.  But for a 120-night annual limit 
on his usage of the English home, the only limitation imposed on how Mr. Tyson and his 
family and friends used the homes was that business use would take priority over 
personal use.  Company records reflect occasions when Don Tyson’s friends hosted their 

                                                 
4  These credit cards remained active despite the institution in 1998 of a company-wide policy 
requiring that company-billed credit cards either be cancelled or that the company be given access to a 
personal account from which it could draw funds to pay the credit card bills.  Don Tyson was aware of the 
company’s policy.  Mr. Tyson provided the company with access to his checking account to pay these 
bills, however, as a result of internal control failures at the company, it continued to pay the expenses 
incurred on the company credit cards by Mr. Tyson and two of his friends. 



 

 4

friends and family for vacations in the English home and used the company-paid 
chauffeur, cook and housekeeper at that home.  His friends also vacationed at the 
company’s home and used the company’s crewed boat in Cabo San Lucas, Mexico;  

 
• $426,0865 of personal use of company-owned aircraft by him and his family and friends.  

Don Tyson had virtually unlimited access to Tyson Foods’ aircraft.  The only limitation 
on Don Tyson’s access to Tyson Foods’ aircraft was that business use would take priority 
over personal use.  Mr. Tyson’s family and friends regularly used the company’s aircraft 
for personal travel with and without him on board;   

 
• $203,675 in housekeeping provided by company employees or persons paid by the 

company at five different homes where Don Tyson and his family and friends lived 
and/or vacationed; 

 

• $84,000 in lawn maintenance at five different homes where he and his family and friends 
lived; 

 

• $46,110 to maintain nine automobiles owned and used by him and his family and friends; 
 

• $36,554 in telephone services for him and his family and friends; 
 

• $15,000 in Christmas gift certificates that were provided to Don Tyson’s family and 
friends; and  

 
• $1,072,699 to cover Don Tyson’s personal income tax liability associated with his receipt 

of these benefits.   
 

In addition, Tyson Foods provided various perquisites to Mr. Tyson and his family and friends 
that had de minimus incremental cost to the company.  These included personal use of the 
company’s stadium skyboxes, personal use of a compound of lake homes and monitoring of 
security systems at homes where Mr. Tyson and his family and friends lived. 
 

2. Disclosures of Don Tyson’s Perquisites from 1997-2001 
 

8. Disclosures about Don Tyson’s perquisites and personal benefits for each of the 
fiscal years from 1997 to 2001 were made in footnotes to the “other annual compensation” 
column of the summary compensation tables of Tyson Foods’ proxy statements for those years.  
Those footnotes described his perquisites as “travel and entertainment costs and amounts 
reimbursed for estimated income tax liability related thereto,” and identified aggregate figures 
for the “travel and entertainment costs” and the related income tax liability, respectively.  These 
                                                 
5  The company calculated the value of personal aircraft usage using the method required for 
imputation of income for tax purposes, known as Standard Industry Fare Level, or SIFL, rather than the 
aggregate incremental cost method required by Instruction 2 to Item 402(b)(2)(iii)(C) of Regulation S-K 
of the Exchange Act for disclosure of perquisites. 



 

 5

proxy statements were incorporated by reference in the company’s annual reports filed on Forms 
10-K for those fiscal years, which were signed by Mr. Tyson and others.  
 

9. Tyson Foods omitted over $1 million of Don Tyson’s perquisites from disclosure 
in these proxy statements filed with the Commission due to internal control failures and a 
strategy devised by the company’s tax accountant to preserve the company’s tax deduction for 
Mr. Tyson’s compensation that resulted in mischaracterizing portions of his perquisites as a 
“performance-based bonus.” 

 
10. Specifically, $424,121 in perquisites (representing mostly the value of the above-

described housekeeping, lawn maintenance, automobile maintenance and telephone services) 
was omitted from disclosure because in-house counsel responsible for preparing proxy 
statements was unaware that Don Tyson was receiving those services.  Mr. Tyson signed annual 
director and officer (“D&O”) questionnaires that disclosed only that he received “travel and 
entertainment” and provided a total value of his annual perquisites as calculated by the 
company’s outside tax accountant.  He delegated responsibility for the accuracy of those 
questionnaires.  He did not read them before signing them and took no other action to determine 
whether his responses were complete and accurate. 

 
11. An additional $596,656 of perquisites and the tax gross-up thereon, were omitted 

from the proxy statements’ disclosure of perquisites in 1998, 1999 and 2000 due to a tax strategy 
devised to permit the company to deduct Don Tyson's entire compensation.  Section 162(m) of 
the Internal Revenue Code limits the deductibility of executive compensation to $1 million 
unless the compensation is “performance based,” which means the compensation is payable “on 
account of the attainment of one or more performance goals.”  The company had adopted 
(effective fiscal 1995) a shareholder approved senior executive performance bonus plan to 
comply with Section 162(m).  For each of the years 1998, 1999 and 2000, the amount of Mr. 
Tyson’s salary plus perquisites exceeded $1 million.  For those years, the company’s tax 
accountant advised the compensation committee to award Don Tyson a bonus under the senior 
executive performance bonus plan in the amount by which his salary plus perquisites exceeded 
$1 million.  Mr. Tyson signed D&O questionnaires for the years 1998, 1999 and 2000 that 
incorrectly stated that he had received bonuses of $86,656 (1998), $310,000 (1999) and 
$200,000 (2000) rather than disclosing that he had received perquisites valued at such amounts.  
Those perquisite amounts were then improperly disclosed in the proxy statements as 
performance-based bonuses by moving amounts from the “other compensation” column (used to 
disclose perquisites) to the “bonus” column of the summary compensation table.  This resulted in 
underreporting Mr. Tyson’s perquisites in each of those years by $86,656, $310,000 and 
$200,000 in 1998, 1999 and 2000, respectively. 

 
12. Of the perquisites the company did disclose, the company disclosed them as 

“travel and entertainment” costs, as noted above.  That description was inaccurate because Don 
Tyson and his family and friends received over $372,539 in personal expenses that could not be 
characterized as “travel” or “entertainment.”  Also, in many years, the cost of these personal 
expenses, use of company homes, personal use of company aircraft and/or residential services 
exceeded 25% of the total perquisites.  However, these perquisites were not separately disclosed 



 

 6

“by type and amount” in the footnotes to the summary compensation tables as required by the 
Commission’s rules.  See Regulation S-K, Item 402(b)(2)(iii)(C) and Instruction 1 thereto.   

 
13. Due to the internal control failures, many of the perquisites described above were 

neither raised with nor authorized by Tyson Foods’ compensation committee or its board of 
directors.6  While the members of the compensation committee knew generally that Don Tyson 
received “travel and entertainment” in the form of his own personal use of company aircraft and 
homes and the dollar amount of Mr. Tyson’s annual perquisites, no one in company 
management, including Don Tyson, brought to the compensation committee’s or the full board’s 
attention any additional information about his other perquisites.  As a result, for example, the 
board members were unaware until the Commission’s investigation that the company was paying 
for substantial personal expenses incurred by Don Tyson and two of his friends.  They were also 
unaware of the regular use of company aircraft by Don Tyson’s family and friends while he was 
not on board.  They were also unaware until a review of executive perquisites by the company’s 
general counsel’s office in November 2002 (discussed in greater detail below) of the 
housekeeping, lawn maintenance, telephone services, and automobile maintenance provided to 
Don Tyson and his family and friends.   

 
3. Disclosure of Perquisites Provided Under Don Tyson’s Retirement 

Agreement and Perquisites Provided Following His Retirement  
 
14. Don Tyson retired as senior chairman in 2001.  He and Tyson Foods entered into 

a “Senior Executive Employment Agreement,” dated October 19, 2001 (the “Retirement 
Agreement”), which provided that he would receive certain consideration in return for his 
agreement to furnish “advisory services” to the company following his retirement as senior 
chairman.  The Retirement Agreement provided that Don Tyson would receive one million 
shares of restricted Class A common stock, $800,000 per year for ten years and “travel and 
entertainment costs, as well as his estimated income tax liability with respect thereto, consistent 
with past practices.”  The Retirement Agreement itself was filed as an exhibit to the company’s 
2001 Form 10-K.   

  
15. In its proxy statements filed in 2002 and 2003, Tyson Foods, in describing the 

Retirement Agreement, stated that Mr. Tyson would receive “travel and entertainment costs . . . 
consistent with past practices,” but made no other disclosures describing the full nature and 
scope of the perquisites that Don Tyson would receive in retirement.  Thus, for example, no 
disclosure was made that he and his family and friends would continue to receive many of the 
perquisites described above.  As with the company’s prior proxy statements, the terms “travel 
and entertainment” did not properly disclose some of the perquisites that he received, which 
could not be characterized as either “travel” or “entertainment.”  In addition, although the 
company disclosed that he would receive travel and entertainment costs and tax gross-ups 
thereon “consistent with past practices,” investors could not learn from the company’s 
previously-filed proxy statements the total costs of the benefits Mr. Tyson would receive in 
                                                 
6  The value of these perquisites was approximately $1.5 million.  During the course of the 
Commission’s investigation, Don Tyson voluntarily reimbursed the company more than $1.5 million.  In 
view of Don Tyson’s reimbursement, the Commission is not ordering him to pay disgorgement in this 
matter. 



 

 7

retirement due to the omission of perquisites from the prior proxy statements.  In his first two 
years of retirement, he received $1.1 million in “travel and entertainment costs” and associated 
tax gross-ups, which was almost double what Tyson Foods reported for his last two years of 
employment as senior chairman ($585,281). 

 
16. In November 2002, the general counsel’s office at Tyson Foods conducted a 

review of executive perquisites.  In connection with that review, Don Tyson signed a list of 
perquisites that failed to describe adequately his use of certain company assets and omitted 
certain other perquisites that Tyson Foods was providing him and his friends and family.  While 
that list did state that he obtained personal use of the company’s aircraft and homes, it failed to 
indicate that Mr. Tyson made these corporate assets available to his family and friends for their 
personal use and that the company had paid for personal expenses for him and two of his friends.  

 
D. VIOLATIONS 
 

 1. Tyson Foods Violated the Proxy Solicitation, Reporting Provisions 
and the Internal Control Provisions of the Exchange Act 

 
17. Tyson Foods violated the proxy solicitation and reporting provisions of the 

Exchange Act by filing with the Commission annual reports and proxy statements that failed to 
fully and accurately disclose the perquisites that Don Tyson received during his last five years as 
senior chairman and the perquisites to which he was entitled pursuant to his Retirement 
Agreement.   

 
18. Section 13(a) of the Exchange Act and Rule 13a-1 thereunder require all issuers 

with securities registered under Section 12 of the Exchange Act to file annual reports with the 
Commission on Form 10-K.  These reports must be complete and accurate in all material 
respects.  See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert. 
denied, 440 U.S. 913 (1979).  No showing of scienter is necessary to establish a violation of 
Section 13(a).  Id. at 1167. 

  
19. Section 14(a) of the Exchange Act requires registrants that solicit any proxy or 

consent or authorization in connection with any security registered pursuant to Section 12 of the 
Exchange Act (other than an exempted security), to comply with such rules as the Commission 
may promulgate.  Rule 14a-3 provides that no solicitation of a proxy may occur unless each 
person solicited is concurrently furnished or has previously been furnished with a proxy 
statement containing the information specified in Schedule 14A.  Rule 14a-9 prohibits, among 
other things, the use of proxy statements which omit to state any material fact necessary in order 
to make the statements therein not false or misleading.  Like Section 13(a) of the Exchange Act, 
no showing of scienter is required to establish a violation of Section 14(a) of the Exchange Act 
and Rules 14a-3 and 14a-9 thereunder.  See, e.g., Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 
1281, 1299-1300 (2d Cir. 1973). 

 
20. Tyson Foods was required to fully and accurately disclose Don Tyson’s 

perquisites while he was employed as senior chairman from 1997 to 2001 and those to which he 
was entitled thereafter pursuant to his Retirement Agreement.  Item 11 of Form 10-K requires 



 

 8

that registrants furnish the information required by Item 402 of Regulation S-K.  Similarly, Item 
8 of Schedule 14A, captioned “Compensation of Directors and Executive Officers,” requires that 
registrants set forth in the proxy statement the information required by Item 402 of Regulation S-
K if action is to be taken with respect to, among other things, election of directors.  Item 402 of 
Regulation S-K sets forth the required disclosures with respect to executive compensation.  The 
underlying purpose of the Item 402 disclosures is “to improve shareholders’ understanding of all 
forms of compensation paid to senior executives and directors.” Securities Act Release No. 6962, 
Executive Compensation Disclosure (Oct. 16, 1992).  Proxy disclosures with respect to executive 
compensation “enhance shareholders’ ability to assess how well directors are representing their 
interests.” Id.   

 
21. Item 402(b) of Regulation S-K requires disclosure of perquisites.  Disclosure is 

required for named executive officers when the value of “perquisites and other personal benefits, 
securities or property” exceeds the lesser of $50,000 or 10% of the total annual salary and bonus 
reported for the executive.  Two types of disclosures are required for each executive:  (1) the 
total dollar amount of the perquisites must be included in the summary compensation table; and 
(2) an additional footnote disclosure is required to specifically identify “by type and amount” 
each perquisite that exceeds 25% of the total perquisites reported for the executive. 

 
22. In proxy statements filed for fiscal years 1997 to 2001, Tyson Foods made 

misleading disclosures of the provision of personal benefits and perquisites to Don Tyson and 
otherwise failed to comply with Item 402(b).   The footnote description of Don Tyson’s 
perquisites as “travel and entertainment costs” was misleading because, among other things, Don 
Tyson and his family and friends received numerous perquisites that could not be considered 
travel or entertainment.  In addition, the total perquisites disclosed for Don Tyson during this 
period omitted more than $1 million in perquisites due to internal control failures and the 
company’s disclosure of portions of Don Tyson’s perquisites as performance-based bonuses in 
1998, 1999 and 2000.  Tyson Foods also failed to specifically identify by type and amount each 
of Mr. Tyson’s perquisites that exceeded 25% of his total perquisites, and it incorrectly valued 
Mr. Tyson’s personal aircraft usage using the tax or SIFL method instead of using the aggregate 
incremental cost method required by Instruction 2 to Item 402(b)(2)(iii)(C).   
 

23. Item 402(h)(2) of Regulation S-K requires registrants to describe the “terms and 
conditions” of any compensatory plan or arrangement that results from the executive officer’s 
retirement if the amount involved exceeds $100,000.  The purpose of Item 402(h) is to provide 
“shareholders … a clear interest in knowing what contractual commitments the board has made 
on behalf of the registrant, both with respect to present inducements to join the registrant’s top 
management and future promises.”  Tyson Foods’ proxy statements for fiscal years 2002 and 
2003 did not fully and accurately describe the substantial perquisites that Don Tyson would 
receive as part of his retirement arrangement.  In addition, the company’s disclosure of his 
entitlement in retirement to “travel and entertainment” costs “consistent with past practice” was 
misleading because, as previously discussed, many of those benefits could not be characterized 
as travel or entertainment and because, as previously discussed, the prior disclosures understated 
what he actually received in perquisites while he was employed. 

 



 

 9

24. Section 13(b)(2)(B) of the Exchange Act requires registrants to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances 
that: (1) transactions are executed in accordance with management's general or specific 
authorization; (2) transactions are recorded as necessary to permit preparation of financial 
statements in conformity with generally accepted accounting principles or any other criteria 
applicable to such statements, and to maintain accountability for assets; (3) access to assets is 
permitted only in accordance with management's general or specific authorization; and (4) the 
recorded accountability for assets is compared with the existing assets at reasonable intervals and 
appropriate action is taken with respect to any differences.  Like Section 13(a), there is no 
scienter requirement to establish a violation of the internal controls provisions in Section 13(b). 

 
25. Tyson Foods failed to devise and maintain a system of internal accounting 

controls over personal use of assets sufficient to detect, prevent, or account properly for Don 
Tyson’s and his family’s and friends’ use of company assets.  Don Tyson received $424,121 in 
perquisites that went undisclosed because Tyson Foods’ proxy reporting process failed to 
identify them.  Moreover, Mr. Tyson received approximately $1.5 million in personal benefits 
and perquisites (including gross-up payments for tax purposes) both while he was employed and 
during his retirement that had not been raised with or authorized by the compensation committee 
or the board of directors.  As a result of its failure to maintain a system of internal accounting 
controls that captured all perquisites provided to Mr. Tyson and that informed the compensation 
committee of such perquisites, Tyson Foods failed to fully and accurately disclose Don Tyson’s 
personal benefits and perquisites in the company’s proxy statements during his tenure as senior 
chairman and in connection with his retirement, as required by Items 402(b) and 402(h) of 
Regulation S-K.  

 
26. Based on the foregoing, Tyson Foods violated Sections 13(a), 13(b)(2)(B) and 

14(a) of the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 thereunder.   

2. Don Tyson Was a Cause of Tyson Foods’ Proxy Solicitation and 
Reporting Violations  

27. Don Tyson was a cause of Tyson Foods’ violations of Sections 13(a) and 14(a) of 
the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 thereunder.   

 
28. During his tenure as senior chairman from 1997 through 2001, Don Tyson’s 

actions and omissions were a cause of Tyson Foods’ misleading disclosures of his perquisites 
and personal benefits.  Although he signed annual questionnaires that purported to list all 
company-provided perquisites that he received, his responses disclosed only that he received 
“travel and entertainment” from the company.  Mr. Tyson also signed the company’s Forms 10-
K, which incorporated by reference the company’s proxy statements.  Don Tyson did not read 
those questionnaires or the proxy statements incorporated into the company’s Forms 10-K before 
signing them, and he failed to take action to ensure the accuracy of the company’s disclosures of 
his perquisites.  Instead, he assigned to others the responsibility for compiling the information to 
be included in the responses to the questionnaires.  However, Don Tyson was the only individual 
who possessed certain information necessary to accurately complete the questionnaires. 

 



 

 10

29. Don Tyson was also a cause of the company’s misleading disclosures of his 
retirement perquisites in its 2002 and 2003 proxy statements.  In those years, he provided the 
same incomplete list of his perquisites in questionnaires and, in addition, separately provided in 
connection with the company’s review of executive perquisites by its general counsel’s office an 
incomplete list of perquisites that he had received for 2002.  That list omitted the fact that the 
company had paid for personal expenses for him and two of his friends and had provided 
housekeeping, lawn maintenance, automobile maintenance and telephone services to him and his 
family and friends. 

 
IV. 

 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondents’ Offers. 
 

Accordingly, it is hereby ORDERED that: 
 

Respondent Tyson Foods cease and desist from committing any violations and any future 
violations of Sections 13(a), 13(b)(2)(B) and 14(a) of the Exchange Act and Rules 13a-1, 14a-3 
and 14a-9 thereunder. 

 
Respondent Don Tyson cease and desist from causing any violations and any future 

violations of Sections 13(a) and 14(a) of the Exchange Act and Rules 13a-1, 14a-3 and 14a-9 
thereunder. 

 
 

By the Commission. 
 
 

Jonathan G. Katz 
Secretary