THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Smithfield Foods, Inc. (SFD)

7/29/2005 Proxy Information

Robert L. Burrus, Jr., a director of the Company and a member of the Compensation Committee during a portion of fiscal 2005, is a partner in the law firm of McGuireWoods LLP, which has provided legal services to the Company on a regular basis since 1985.

In connection with the Company’s January 2000 acquisition of Murphy Farms, Inc. and certain affiliated companies, the Company entered into a registration rights agreement and a shareholders agreement with the former Murphy Farms shareholders, which consisted of Wendell H. Murphy, a director of the Company, and the following members of his family: Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Harry D. Murphy, Marc D. Murphy, Stratton K. Murphy, Angela Brown and Joyce M. Minchew (collectively, the “Former Murphy Farms Shareholders”). The registration rights agreement entitled the Former Murphy Farms Shareholders to have the Company register public resales of the shares of Common Stock they received in the acquisition in connection with certain registered offerings by the Company. Under the shareholders agreement, the Former Murphy Farms Shareholders agreed to limitations on their transfer of Common Stock and further agreed not to take certain actions, including (i) initiating or participating in certain proxy contests, (ii) opposing management proposals presented at a shareholders meeting or (iii) acquiring or substantially affecting control of the Company. Both of these agreements expired in January 2005. Prior to their expiration, these agreements may have caused the Former Murphy Farms Shareholders to constitute a “group” for purposes of the reporting requirements of the Exchange Act. Collectively, the Former Murphy Farms Shareholders beneficially own more than 5% of the outstanding Common Stock.

The Company has business relationships with certain entities owned in whole or part by Wendell H. Murphy, a director, and the other Former Murphy Farms Shareholders. Each of these entities owns farms that either produce and sell hogs to the Company or produce and sell feed ingredients to the Company. The Company advances associated farm and other support costs to most of these entities for which it is subsequently reimbursed. The ownership of these entities and the amounts of their transactions with the Company during fiscal 2005 is set forth below. Wendell H. Murphy holds a 43% interest in Arrowhead Farms, Inc. to which the Company made $1,147,306 in payments. Wendell H. Murphy holds a 1% interest and Wendell H. Murphy, Jr. holds a 99% interest in DM Farms of Rose Hill LLC to which the Company made payments of $22,240,271 and from which the Company received payments of approximately $11,100,000. Wendell H. Murphy, Jr. and Wendy Murphy Crumpler each have a 40% interest in Enviro-Tech Farms, Inc. to which the Company made payments of $3,518,290 and from which the Company received payments of $1,357,647. Wendell H. Murphy, Jr. holds a 29% interest in Golden Farms, Inc. and a 50% interest in Lisbon 1 Farm, Inc. to which the Company made payments of $1,212,174 and $1,213,122, respectively. Wendell H. Murphy, Jr. holds a 51% interest in Triumph Associates LLC to which the Company made payments of approximately $200,000 and from which the Company received payments of approximately $1,400,000. The Former Murphy Farms Shareholders collectively own all of the interest in MurFam Enterprises LLC to which the Company made payments of $187,341 and from which the Company received payments of $126,894. Marc D. Murphy and Stratton K. Murphy each have a 35% interest and Harry D. Murphy has a 30% interest in Murphy-Honour Farms, Inc. to which the Company made payments of $2,345,709 and from which the Company received payments of $823,678. Harry D. Murphy has a 49% interest and Marc D. Murphy and Stratton K. Murphy each have a 25.5% interest in PSM Associates to which the Company made payments of $3,542,250 and from which the Company received payments of $1,510,694. Wendy M. Crumpler and, her husband, Kelly Crumpler, each have a 50% interest in Pure Country Farms, LLC to which the Company made payments of $2,473,173 and from which the Company received payments of $984,128. Wendy M. Crumpler and Wendell H. Murphy Jr. each have a 50% interest in Stantonsburg Farm, Inc. and a 37.5% interest in Webber Farms, Inc. to which the Company made payments of $507,644 and $2,528,190, respectively, and from which the Company received payments of $0 and $146,380, respectively. The Company believes that the terms of the foregoing arrangements were no less favorable to the Company than if entered into with unaffiliated parties.

In connection with the Company’s October 2001 acquisition of Packerland Holdings, Inc., the Company entered into a registration rights agreement and a shareholders agreement with the former Packerland shareholders, which include Richard V. Vesta, now an executive officer of the Company. The registration rights agreement entitled the former Packerland shareholders to have the Company register public resales of the shares of Common Stock they received in the acquisition in connection with certain registered offerings by the Company. Under the shareholders agreement, the former Packerland shareholders agreed to limitations on their transfer of Common Stock and further agreed not to take certain actions, including (i) initiating or participating in certain proxy contests or (ii) opposing management proposals presented at a shareholders meeting. Both of these agreements expired in October 2004.

Jerry H. Godwin, an executive officer, holds a 33% ownership interest in JCT LLC. JCT owns certain farms that produce hogs under contract with Murphy-Brown LLC, a subsidiary of the Company. In fiscal 2005, the Company made payments totaling $7,500,277 to JCT for the production of hogs and received payments totaling $4,562,528 from JCT for reimbursement of associated farm and other support costs. In addition, during fiscal 2004 the Company advanced funds to JCT for repairs at certain JCT sites which were damaged by Hurricane Isabel. This is a standard practice by Murphy-Brown for contract farmers that have experienced disasters. The largest aggregate amount outstanding during fiscal 2005 for these non-interest accruing advances was approximately $1,852,278 on August 1, 2004. All of these advances were repaid during fiscal 2005. The Company believes that the terms of the foregoing arrangements were no less favorable to the Company than if entered into with unaffiliated parties.

On August 2, 2004, Murphy-Brown repaid the entire $869,068 it owed Jerry H. Godwin under a note bearing interest at the Wachovia Bank prime lending rate. Such amount constituted the largest amount outstanding under the note during fiscal 2005.

In 1997, the Company entered into split-dollar life insurance agreements with two irrevocable trusts established by Joseph W. Luter, III, the Chief Executive Officer of the Company. Under the terms of those agreements, the Company advanced a portion of the premiums payable under certain life insurance policies owned by the trusts and payable to the trusts upon Mr. Luter’s death. No premiums have been paid under the agreements since the enactment of the Sarbanes-Oxley Act in July 2002. The Company was entitled to terminate the agreements at any time and receive the lesser of the aggregate premiums previously paid by the Company and the cash surrender value of the life insurance policies. The Company was granted a security interest in the cash surrender value and death benefits of the policies equal to the sum of all premiums paid by the Company. Effective June 30, 2004, the agreements were terminated and the life insurance policies were assigned to the Company in satisfaction of the Company’s right to receive the cash surrender value of the policies. At the time of the termination, the cash surrender value of the policies was $14,158,837, which was $2,899,717 less than the aggregate premiums previously paid by the Company.

Jason Seely, the son of Timothy A. Seely, a current officer and former executive officer of the Company, serves as the Company’s Director of Sales, Pre-cooked Foods, for the Smithfield Deli Group. In fiscal 2005, his salary and bonus totaled $132,560.

Joseph W. Luter, III is the father of Joseph W. Luter, IV, an executive officer of the Company.

7/28/2004 Proxy Information

Robert L. Burrus, Jr., a director of the Company and a member of the Compensation Committee, is a partner in the law firm of McGuireWoods LLP, which has provided legal services to the Company on a regular basis since 1985.

In January 2000, the Company purchased Murphy Farms, Inc. and certain affiliated corporations for 22,108,792 shares of Common Stock (subject to post-closing adjustment). As a result of this transaction, the former shareholders of Murphy Farms (Wendell H. Murphy, a director, Harry D. Murphy, Joyce M. Norman, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Stratton K. Murphy, Marc D. Murphy and Angela Brown) became the beneficial owners in the aggregate of 24,042,792 shares of the Company’s Common Stock which amount included shares of Common Stock previously held by Murphy Farms, and certain affiliated corporations, such shareholders and their affiliates.

In connection with the acquisition, the Company entered into a registration rights agreement and a shareholders agreement with the former Murphy Farms shareholders. Under the registration rights agreement, each of the former Murphy Farms and certain affiliated corporations’ shareholders is entitled for a period of five years to have the Company register public resales of shares of Common Stock subject to customary terms and conditions, in connection with certain registered offerings by the Company. The Company is not required under the registration rights agreement to file or maintain a “shelf registration” with respect to these shares. Under the shareholders agreement, each of the former Murphy Farms and certain affiliated corporations’ shareholders agreed for five years not to (i) initiate any solicitation of proxies from Company shareholders or participate in any election contest or in any proposal made under Rule 14(a)-8 of the Exchange Act; (ii) oppose, or participate in any group opposing, any management proposals presented at a shareholders meeting, or vote against any such proposals; or (iii) acquire or substantially affect control of the Company, or seek to do so. Under such agreement, such shareholders also agreed not to sell or otherwise transfer shares of Common Stock aggregating 5% or more of the then outstanding Common Stock to any one person or group. Such shareholders further agreed not to sell or transfer within any 12 month period or make any other agreement or arrangement of transfer with respect to 10% or more of the shares of Common Stock issued to any such shareholder in connection with the acquisition of Murphy Farms and certain affiliated corporations.

The Company has business relationships with certain entities owned in whole or part by Wendell H. Murphy, a director, and the other former Murphy Farms shareholders. Each of these entities owns farms that either produce and sell hogs to the Company or produce and sell feed ingredients to the Company. The Company advances associated farm and other support costs to most of these entities for which it is subsequently reimbursed. The ownership of these entities and the amounts of their transactions with the Company during fiscal 2004 is set forth below. Wendell H. Murphy holds a 43% interest in Arrowhead Farms, Inc. to which the Company made $1,141,303 in payments. Wendell H. Murphy holds a 1% interest and Wendell H. Murphy, Jr. holds a 99% interest in DM Farms of Rose Hill LLC to which the Company made payments of $23,189,360 in fiscal 2004 and from which the Company received payments of $17,666,571. Wendell H. Murphy, Jr. and Wendy Murphy Crumpler each have a 40% interest in Enviro-Tech Farms, Inc. to which the Company made payments of $2,673,763 and from which the Company received payments of $1,940,142. Wendell H. Murphy, Jr. holds a 29% interest in Golden Farms, Inc. and a 50% interest in Lisbon 1 Farm, Inc. to which the Company made payments of $1,230,863 and $1,131,844, respectively. The former Murphy Farms shareholders collectively own all of the interest in MurFam Enterprises LLC to which the Company made payments of $397,670 and from which the Company received payments of $836,015. Marc D. Murphy and Stratton K. Murphy each have a 35% interest and Harry D. Murphy has a 30% interest in Murphy-Honour Farms, Inc. to which the Company made payments of $2,136,827 and from which the Company received payments of $128. Harry D. Murphy has a 49% interest and Marc D. Murphy and Stratton K. Murphy each have a 25.5% interest in PSM Associates to which the Company made payments of $3,585,620 and from which the Company received payments of $5,479. Wendy M. Crumpler and, her husband, Kelly Crumpler, each have a 50% interest in Pure Country Farms, LLC to which the Company made payments of $2,468,981 and from which the Company made payments of $6,887. Wendy M. Crumpler and Wendell H. Murphy Jr. each have a 50% interest in Stantonsburg Farm, Inc. and a 37.5% interest in Webber Farms, Inc. to which the Company made payments of $507,644 and $2,547,075, respectively, and from which the Company received payments of $0 and $130,899, respectively. The Company believes that the terms of the foregoing arrangements were no less favorable to the Company than if entered into with unaffiliated parties.

In October 2001, the Company purchased Packerland Holdings, Inc. for 6,354,324 shares of Common Stock (including 684,151 shares subject to an escrow agreement). As a result of this transaction, Richard V. Vesta (a former shareholder of Packerland Holdings and, following the transaction, an executive officer of the Company) became the beneficial owner of 1,971,629 shares of the Company’s Common Stock. In connection with the acquisition, the Company entered into a registration rights agreement and a shareholders agreement with the former Packerland Holdings shareholders, including Mr. Vesta. Under the registration rights agreement, each of the former Packerland Holdings shareholders is entitled for a period of three years to have the Company register public resales of shares of Common Stock, subject to customary terms and conditions, in connection with certain registered offerings by the Company. The Company is not required under the registration rights agreement to file or maintain a “shelf registration” with respect to these shares. Under the shareholders agreement, each of the former Packerland Holdings shareholders agreed for three years not to (i) initiate any solicitation of proxies from Company shareholders or participate in any election contest or in any proposal made under Rule 14(a)-8 of the Exchange Act; or (ii) oppose, or participate in any group opposing, any management proposals presented at a shareholders meeting, or vote against any such proposals.

Jerry H. Godwin, an executive officer, holds a 33% ownership interest in JCT LLC. JCT owns certain farms that produce hogs under contract with Murphy-Brown LLC, a subsidiary of the Company. In fiscal 2004, the Company made payments totaling $6,579,451 to JCT for the production of hogs and received payments totaling $3,286,906 from JCT for reimbursement of associated farm and other support costs. The Company had provided working capital advances to JCT under the terms of a $6.0 million revolving demand promissory note. In fiscal 2003, the Company provided an additional $7.7 million of financing to JCT for the acquisition of hog production facilities. During fiscal 2004, JCT repaid all of these advances from the Company. The rate of interest for these advances was Wachovia Bank’s prime rate. In addition, during fiscal 2004 the Company has advanced funds to JCT for repairs at certain JCT sites which were damaged by Hurricane Isabel. This is a standard practice by Murphy-Brown for contract farmers that have experienced disasters. The aggregate amount outstanding for these non-interest accruing advances was approximately $1,400,396 as of June 30, 2004. The largest amount outstanding during fiscal 2004 was approximately $1,387,831. The Company believes that the terms of the foregoing arrangements were no less favorable to the Company than if entered into with unaffiliated parties.

As of May 2, 2004, Murphy-Brown owed Jerry H. Godwin $842,495 under a note bearing interest at the Wachovia Bank prime lending rate and due on demand.

In 1997, the Company entered into split-dollar life insurance agreements with two irrevocable trusts established by Joseph W. Luter, III, the Chief Executive Officer of the Company. Under the terms of those agreements, the Company advanced a portion of the premiums payable under certain life insurance policies owned by the trusts and payable to the trusts upon Mr. Luter’s death. No premiums have been paid under the agreements since the enactment of the Sarbanes-Oxley Act in July 2002. Under the arrangement, upon termination of the agreements, the Company was entitled to receive the lesser of the aggregate premiums previously paid by the Company or the cash surrender value of the life insurance policies. The Company was granted a security interest in the cash surrender value and death benefits of the policies equal to the sum of all premiums paid by the Company. Effective June 30, 2004, the agreements were terminated and the life insurance policies were assigned to the Company in satisfaction of the Company’s right to receive the cash surrender value of the policies. At the time of the termination, the cash surrender value of the policies was $14,158,837, which was $2,899,717 less than the aggregate premiums previously paid by the Company.

Jason Seely, the son of Timothy A. Seely, an executive officer of the Company, serves as the Director of Sales, Pre-cooked Foods, for the Smithfield Deli Group. In fiscal 2004, his salary and bonus totaled $138,211.

Joseph W. Luter, III is the father of Joseph W. Luter, IV, an executive officer of the Company.

7/24/2003 Proxy Information

In January 2000, the Company purchased Murphy Farms, Inc. and certain affiliated corporations for 22,108,792 shares of Common Stock (subject to post-closing adjustment). As a result of this transaction, the former shareholders of Murphy Farms (Wendell H. Murphy, a director, Harry D. Murphy, Joyce M. Minchew, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Stratton K. Murphy, Marc D. Murphy and Angela Brown) became the beneficial owners in the aggregate of 24,042,792 shares of the Company’s Common Stock which amount includes shares of Common Stock previously held by Murphy Farms, and certain affiliated corporations, such shareholders and their affiliates.

In connection with the acquisition, the Company entered into a registration rights agreement and a shareholders agreement with the former Murphy Farms shareholders. Under the registration rights agreement, each of the former Murphy Farms and certain affiliated corporations shareholders is entitled for a period of five years to have the Company register public resales of shares of Common Stock subject to customary terms and conditions, in connection with certain registered offerings by the Company. The Company is not required under the registration rights agreement to file or maintain a “shelf registration” with respect to these shares. Under the shareholders agreement, each of the former Murphy Farms and certain affiliated corporations shareholders agreed for five years not to (i) initiate any solicitation of proxies from Company shareholders or participate in any election contest or in any proposal made under Rule 14(a)-8 of the Exchange Act; (ii) oppose, or participate in any group opposing, any management proposals presented at a shareholders meeting, or vote against any such proposals; or (iii) acquire or substantially affect control of the Company, or seek to do so. Under such agreement, such shareholders also agreed not to sell or otherwise transfer shares of Common Stock aggregating 5% or more of the then outstanding Common Stock to any one person or group. Such shareholders further agreed not to sell or transfer within any 12 month period or make any other agreement or arrangement of transfer with respect to 10% or more of the shares of Common Stock issued to any such shareholder in connection with the acquisition of Murphy Farms and certain affiliated corporations.

Wendell H. Murphy, a director of the Company, holds a 35% interest in Murfam Enterprises, LLC and a 1% interest in DM Farms, LLC. Certain other former shareholders of Murphy Farms hold the remaining membership interests in Murfam Enterprises and DM Farms. Murfam Enterprises and DM Farms own certain farms that produce hogs under contract and sell feed ingredients to Murphy Farms. In fiscal 2003, the Company made payments totaling $328,100 to Murfam Enterprises for the production of hogs and feed ingredients and received payments totaling $298,811 from Murfam Enterprises for reimbursement of associated farm and other support costs. In fiscal 2003, the Company made payments of $23,176,496 to DM Farms for the production of hogs and received payments of $15,887,410 from DM Farms for reimbursement of associated farm and support costs. The Company believes that the terms of the foregoing arrangements were no less favorable to the Company than if entered into with unaffiliated parties.

In October 2001, the Company purchased Packerland Holdings, Inc. for 6,354,324 shares of Common Stock (including 684,151 shares subject to an escrow agreement). As a result of this transaction, Richard V. Vesta (a former shareholder of Packerland Holdings and, following the transaction, an executive officer of the Company) became the beneficial owner of 1,971,629 shares of the Company’s Common Stock. In connection with the acquisition, the Company entered into a registration rights agreement and a shareholders agreement with the former Packerland Holdings shareholders, including Mr. Vesta. Under the registration rights agreement, each of the former Packerland Holdings shareholders is entitled for a period of three years to have the Company register public resales of shares of Common Stock, subject to customary terms and conditions, in connection with certain registered offerings by the Company. The Company is not required under the registration rights agreement to file or maintain a “shelf registration” with respect to these shares. Under the shareholders agreement, each of the former Packerland Holdings shareholders agreed for three years not to (i) initiate any solicitation of proxies from Company shareholders or participate in any election contest or in any proposal made under Rule 14(a)-8 of the Exchange Act; or (ii) oppose, or participate in any group opposing, any management proposals presented at a shareholders meeting, or vote against any such proposals. Under such agreement, certain former Packerland Holdings shareholders, including Mr. Vesta, also agreed not to sell or otherwise transfer (i) any shares of Common Stock issued to any such shareholder in connection with the acquisition of Packerland Holdings for a period of one year; and (ii) more than 50% of the shares of Common Stock issued to any such shareholder in connection with the acquisition of Packerland Holdings during the twelve-month period commencing on the first anniversary of the acquisition of Packerland Holdings by the Company.

In December 2001 and April 2002, the Company lent Mr. Vesta an aggregate of $3,703,000 to facilitate the payment of taxes arising out of his exercise of options to purchase shares of Packerland Holdings prior to the Company’s acquisition of Packerland Holdings. The loans bore interest payable annually at a rate of 7% per annum and are secured by a pledge of 656,882 shares of Common Stock issued to Mr. Vesta in the acquisition of Packerland Holdings. Mr. Vesta repaid his loan principal and accrued interest in the full amount of $3,849,814 on January 23, 2003.

Jerry H. Godwin, an executive officer, holds a 33% ownership interest in JCT LLC. JCT owns certain farms that produce hogs under contract with Murphy-Brown LLC, a subsidiary of the Company. In fiscal 2003, the Company made payments totaling $5,493,831 to JCT for the production of hogs and received payments totaling $2,520,997 from JCT for reimbursement of associated farm and other support costs. The Company also provides working capital advances to JCT under the terms of a $6.0 million revolving demand promissory note, bearing interest at the Wachovia Bank Prime Rate from time to time in effect. As of April 27, 2003, working capital advances totaling $5,659,307 were outstanding. The promissory note is personally guaranteed by JCT’s owners and is secured by JCT’s real estate and equipment. In addition, during fiscal 2003, the Company made term loans to JCT totaling $7,721,709 in the aggregate to finance the acquisition of four additional hog farms. The term loans bear interest at the Wachovia Bank Prime Rate from time to time in effect and are secured by first mortgage liens on the acquired farms. As of April 27, 2003, the aggregate outstanding balance of these term loans was $6,082,042. As of April 27, 2003, JCT also had accounts payable to the Company totaling $252,268. The Company believes that the terms of the foregoing arrangements were no less favorable to us than if entered into with unaffiliated parties.

William H. Prestage resigned as one of the Company’s directors in October 2002. While one of the Company’s directors, he was the chairman of the board, president and chief executive officer of Prestage Farms, Inc., a hog and turkey producer located in Clinton, North Carolina. The Company has a market-indexed multi-year purchase agreement with Prestage Farms which obligates the Company to purchase hogs produced by Prestage Farms in Virginia, North Carolina and South Carolina. Pursuant to the purchase agreement, the Company purchased $148,744,000 of live hogs from Prestage Farms in fiscal 2003. The Company believes that the prices paid under the purchase agreement with Prestage Farms are equivalent to market.

In May 2001, Mr. Prestage purchased a 51% interest in Prestage-Stoecker Farms, Inc., formerly known as Stoecker Farms, Inc., a hog producer located in Ames, Iowa. In June 2002, Mr. Prestage exercised his option to acquire the remaining 49% of Prestage-Stoecker Farms. Murphy Farms and Prestage-Stoecker Farms are parties to several contracts, including (i) a feeder pig purchase agreement expiring in 2010 (which may be extended to 2012 at Murphy Farms’ option) under which Prestage-Stoecker Farms purchases its requirements of feeder pigs from Murphy Farms, (ii) a service agreement (terminable by Prestage-Stoecker Farms on 60 days notice) under which Murphy Farms provides the services of certain personnel to Prestage-Stoecker Farms, and (iii) a non-exclusive feed purchase agreement. In addition, Murphy Farms holds a note from, and provides certain trade terms under the agreements to, Prestage-Stoecker Farms. The obligations of Prestage-Stoecker Farms to Murphy Farms under the note were incurred in connection with the sale of certain assets by Murphy Farms to Stoecker Farms prior to Smithfield’s acquisition of Murphy Farms in January 2000. Prestage-Stoecker Farms’ obligations to Murphy Farms are secured by liens on substantially all the assets of Stoecker Farms. The Company believes that the terms of the agreements are no less favorable to the Company than market. The Company estimates that during fiscal 2003, Prestage-Stoecker Farms made payments of approximately $187,673,000 to Murphy Farms under the agreements. Business volumes at approximately this level are expected to continue, based on equivalent hog prices, while the agreements are in effect.

The aggregate amount outstanding from Prestage-Stoecker Farms under the note and under the feeder pig purchase agreement and feed purchase agreement was approximately $60,220,906 at the end of fiscal 2003. The largest amount outstanding during the fiscal year was approximately $83,655,687. The rate of interest under the note is 8% per annum. Murphy Farms was also paid interest on certain amounts outstanding under the feed purchase agreement at 6% per annum. Under the feeder pig purchase agreement, Prestage-Stoecker Farms pays Murphy Farms for feeder pigs only after Prestage-Stoecker Farms receives payment from its customer for them. No interest is accrued during this period.

Joseph W. Luter, III is the father of Joseph W. Luter, IV, an executive officer of the Company.