This Summary of Coverage highlights your Stock Purchase Plan and Retirement Savings Plan options and the steps you need to enroll.

Transcription

1 Stock Purchase Plan & Retirement Savings Plan Summary of Coverage Effective August 31, 2015 This Summary of Coverage highlights your Stock Purchase Plan and Retirement Savings Plan options and the steps you need to enroll. Stock Purchase Plan As a Tyson Team Member, you are vital to the success of our company. Because of that, we want to offer you a stake in the future of Tyson Foods. We have offered the Tyson Stock Purchase Plan since 1973 as a convenient way for Team Members to acquire shares of Tyson stock. It s also a good investment for you because Tyson will make a matching contribution to the Plan after you have completed one year of employment. We believe Team Member ownership is good for you and good for the Company. As Team Member owners, each of us comes to work every day with the knowledge that we are working for our own future as well as for the future of the Company. That s why we have the Stock Purchase Plan, and why it s such a good deal for you. Eligibility Team Members are eligible to participate on the first day of the month following completion of fifty-nine (59) days of employment. (Bargaining unit groups will not be eligible unless participation is in the contract.) You may enroll in the Plan through the voice response system by calling , or online through a link on the Tyson intranet or from your home computer by going to How The Plan Works You can contribute from 1% to 20% of your pay, or if you would rather specify a dollar amount instead of a percent, from $1 to $25 per week. You will have already paid taxes on your contributions, as well as any matching contributions once eligible, when they go into the Plan. After you begin participating, you may increase or decrease the amount you contribute through the voice response system or the website. Tyson takes the money you put into the Stock Purchase Plan and purchases shares of Tyson Class A common stock for you. You will receive a statement each quarter that will show your total investment in the Plan. Get More Than You Invest Tyson believes so strongly in the Stock Purchase Plan that the Company encourages you to take advantage of all the benefits it offers. If you have at least one year of employment, we will automatically increase your investment. What does that mean to you? Tyson will make a contribution equal to 25% of the first 10% of pay that you contribute to the Plan. That contribution will then be used to buy shares of Tyson Class A common stock. For example, if you 1

2 contribute $20 per pay period (10% of your pay) to the Plan, Tyson will add $5 per pay period (2.5% of your pay). The benefit you receive from being in the Stock Purchase Plan is far greater than what you actually invested. How You Can Use Your Stock The Tyson stock you purchase and the stock Tyson purchases for you are always yours. The stock you purchase will be available to you at the end of each quarter of the year. The stock Tyson purchases for you will be available to you in January of the following year. Basically, there are three things you may do with your stock in the Stock Purchase Plan leave it in the Plan to grow through dividend reinvestment, take it out of the Plan, or sell it through the Plan. You may take your available stock out of the Plan and hold the certificates yourself. If you choose to do this, Tyson will issue your stock to you. You may sell your available stock through the Plan while the shares are still in your account through the voice response system or the website. Note: All sales of shares through the Plan requested before 3:00 p.m. Central Time will be sold at the closing price per share for that day. Other Things To Know When you have shares issued, you will receive a letter after the end of the year containing the tax basis of those shares. Keep it! You will need this letter to report to the IRS when the shares are sold. Whenever you sell shares, you will have to pay taxes on any gain from the sale. At the end of the year, all stock sales through the Plan will be reported on Form 1099-B. If your employment at Tyson ends, your shares will be issued to you in a certificate. Should there be any money left over after your shares are issued, you will receive a check for the remainder. In the event a participant dies, the shares and the check will be issued to the beneficiary, if one is chosen, otherwise to the spouse or estate, in that order. While Tyson s stock has historically increased in value, there is no guarantee that it will increase in the future. Past performance is an indicator only and is not a guarantee of future performance. Tyson s stock, like stock in any company, can and will go up or down in value. Retirement Savings Plan The Retirement Savings Plan of Tyson Foods is designed to be the path to one of your most important goals you and your family s financial security. When you join the Retirement Savings Plan, you save through easy payroll deductions. But the Plan is much more than that. It gives you savings advantages such as: Tax Savings You can save and delay paying taxes on that money until you withdraw it from the Plan. Company Matching Contributions Tyson will help you save by making a matching contribution once you have completed one year of employment. Investment Choices You choose how to invest your savings among the Plan s investment choices. Flexibility You can change your savings amount and the investment of your contributions by calling or through the website. 2

3 Eligibility Team Members are eligible to participate on the first day of the month following completion of fifty-nine (59) days of employment. (Bargaining unit groups will not be eligible unless participation is in the contract.) You may enroll in the Plan through the voice response system by calling or online through a link on the Tyson intranet or from your home computer by going to How Much Can I Save? You can save from 2% to 60% of your base pay and annual bonus, up to the IRS annual limits. The money you save will be pre-tax. In other words, the percentage you choose to save will be deducted from your paycheck before taxes are taken out. Matching Contributions To help you save, after you have completed one year of employment the Company will match, dollar-for-dollar, your contributions to the Plan up to 3% of your pay. Plus, the Company will match half of your further contributions up to the next 2% of your pay. For example, if you make $10,000 per year and contribute $300 (3% of your pay) to the Plan, the Company will put an additional $300 into your retirement account for you. If you add another $200 contribution to your account (2% of your pay),tyson will contribute an additional $100. How Do I Make Changes? To make sure the Plan meets your individual and changing needs, you may increase or decrease your savings percentage at any time. Changes can be made by calling or through the website. Vesting You are immediately 100% vested in your own and the Company s contributions. Start Early, Go Farther You will go farther on the path to a brighter future if you start early. The longer the time you save, the larger your account balance should be at retirement. The amount of risk you take should also be based, in part, on how much time you have to invest before you will need to use your savings. In general, the farther you are from retirement, the more risk you can take because you have a longer time to make up any short-term losses that may occur. Looking at how much time you have may help you choose an appropriate investment mix: 5 years or less: You should probably limit your risk with this time frame. Any losses that occur could be difficult to make up. You may want to have more income-oriented investments, such as bonds, as you near retirement. 3

4 5 to 15 years: You can be reasonably aggressive because any losses will probably be made up during this time frame. Still, you will not want to take big risks, because you have worked hard to reach this point. A major setback could affect your retirement nest egg. 15 years or more: With this much time, you probably should put a part of your portfolio in aggressive investments. This is the time when you are trying to maximize your potential return. Of course, your situation may vary because of family or other factors. But it is important to remember that every year you delay saving means you will have to save that much more each year as you near retirement. Those are probably the years when you would like to slow down and feel secure about your financial situation. Understanding Investments Investing can be complicated, but you can make good investment choices if you understand a few key points about investing. Stocks When you buy a stock, you buy an ownership in a particular company. Stocks pay investors in two ways. First, the company that issues the stock can pay dividends to shareholders. This is each shareholder s portion of company earnings. Second, if the company does well, the shares can increase in price. This is called capital appreciation. Stocks do not guarantee a return of your original investment, so they are considered a riskier investment than bonds. Their value can decrease. But when you own stocks, you can have a greater potential for receiving a higher return than with other investments. Bonds Generally, these are more conservative investments. When you buy a bond, you are loaning money to the government or a corporation. The bond is an IOU for the loan. In return, the government or corporation promises to return your original amount of money plus interest. Varying Risk & Return You should also understand risk and return. Risk is the chance that your investments could lose money. Return is the profit or loss on your investments. There are different degrees of risk among stocks, bonds, and other investments. Usually, the greater the potential for a higher return, the greater the chance for a loss. Because of this, stocks have historically been a riskier investment than bonds. One common way to measure risk is based on the volatility of an investment. Volatility is the up and down movement of an investment s value. Some investments have large ups and downs, while others move very little. Your tolerance for risk is determined by how much volatility you are willing to accept in your investments. Over the short term, stock prices go up and down. But in the past, stocks have performed better than bonds. There is another type of risk when you invest the risk that your investments may not earn enough to beat inflation. Inflation is the rise in the cost of products and services. When inflation grows faster than your investments, you lose purchasing power. Mixing s To Reduce Risk There is a way to reduce risk and still receive a good return from your investments. It is called diversification, which means putting your money into several types of investments. Diversification is already built into the mutual funds in the Tyson Retirement Savings Plan. Each mutual fund is made up of many different kinds of stocks and/or bonds. This limits the effect of a loss on the whole portfolio. There is also diversification between different types of investment funds. You may decide to put all of your money in one fund, or invest a certain percentage in each fund. Remember that by investing in more than one fund, you can spread your risk over many more stocks and bonds, which reduces the potential for loss. 4

5 The Plan offers a stable value fund, a variety of mutual funds with varying degrees of risk, and a range of age-based funds. You can split your money among some or all of the Plan funds in increments of 1%. Any combination is okay just be sure that the total adds up to 100%. The process is simple. Just call the voice response system at and make your investment choices right on the phone or make them through the website. If you do not make a selection of investment choices, your account will be automatically invested in the appropriate age-based investment fund. Choosing the right investments, and managing them once you choose them, can seem overwhelming. That s where our age-based funds and investment program come into play. Investing for Your Future Just Got Easier The Retirement Savings Plan includes features to help you invest like a pro providing easy steps that won t overwhelm you but will help you feel more confident about reaching your retirement savings goals. Age-Based s take the guesswork out of investing, each offering a portfolio appropriate to your age. The InvestForward program automatically places you in the appropriate age-based fund and handles the annual task of rebalancing. GuidancePlus, an online tool, helps you set retirement goals and determine if you re contributing enough to reach them. If you want to manage your investments on your own, it can help you decide which funds are right for you. Age-Based s If you re uncomfortable choosing or managing investments, these funds are a great choice. The age-based options consist of a blend of investment funds available in the 401(k). Your money is invested to realize growth if you re younger and protect what you ve earned if you re closer to retirement. Just find the fund that includes your age and you ll find a fund designed with your needs in mind. Take a look at the blend of funds for each age-based option. Age 35 and Under Age 36 to 40 Age 41 to 45 Age 46 to 50 Age 51 to 55 Age 56 to 60 Age 61 to 65 Age 66 to 70 Age 71 and Over Stable Value 2% 3% 5% 8% 8% 10% 12% 14% 16% Bond 4% 9% 13% 17% 21% 26% 32% 37% 43% Large Cap Value 11% 10% 10% 9% 9% 8% 7% 6% 5% Large Cap Core 10% 10% 9% 8% 8% 7% 6% 5% 4% S&P 500 Index 12% 12% 10% 10% 8% 8% 7% 7% 6% Large Cap Growth 10% 10% 9% 8% 8% 7% 6% 5% 4% Small/Mid Cap Value 11% 10% 10% 9% 9% 8% 7% 6% 5% Small/Mid Cap Growth 11% 10% 10% 9% 9% 8% 7% 6% 5% Small Cap Blend 7% 7% 7% 6% 6% 5% 5% 4% 4% International 22% 19% 17% 16% 14% 13% 11% 10% 8% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 5

6 Enrolling in InvestForward will automatically invest you in the appropriate age-based fund, take care of rebalancing and make sure you move to the right fund as you get older. If you prefer to manage your investments on your own, you can redirect your existing balance and future contributions to any combination of the age-based funds and other individual funds offered. InvestForward If you re thinking about investing in an age-based investment fund, it s as simple as electing InvestForward. When you enroll in InvestForward, any money in your current funds, along with your future contributions, will transfer to the appropriate age-based fund. Plus: You don t have to rebalance your investments in the future. You ll automatically be moved to the next age-based fund when you reach the appropriate age. You can opt into or out of InvestForward at any time. After enrolling in InvestForward, please note that transferring any portion of your account balance to a fund outside of the program will opt you out of InvestForward. You do not have to be enrolled in InvestForward to choose an age-based fund as part of your investment mix. But if you are not enrolled in InvestForward, your age-based fund will not be moved automatically as you age. You will be responsible for changing it. How to enroll Enrolling in InvestForward is just as easy as using it. Call the voice response system at , follow the link on the Tyson intranet or go to Log into the system by entering your Personnel Number and your four-digit PIN. Once in the system, choose Retirement Savings Plan. Choose InvestForward. Choose Opt In. GuidancePlus Enrolling in InvestForward won t take care of everything. You still need to decide exactly how much money you ll need for a comfortable retirement and plan your contributions accordingly. GuidancePlus is an online retirement planning tool available at Once in the system, choose Retirement Savings Plan and then choose GuidancePlus. Your current fund balances and contribution rates are pre-populated into the tool so you can explore your contributions, consider new investment approaches and even make changes to your account all in one place! It can help you: Set specific savings goals by calculating how much you ll need at retirement Determine how much you need to contribute to the 401(k) to reach your goals Choose investments if you want to manage your account on your own You simply answer some questions and GuidancePlus does the work. What could be easier? If you choose to act on the suggested investment guidance or customize your own strategy, your 401(k) account will be updated automatically to reflect your new elections. 6

7 Investment Choices Now that you understand more about investing, let s take a closer look at your investment choices. In addition to Tyson s contribution and your tax savings, you earn money through the investment of your account. The Retirement Savings Plan offers a variety of investment choices to help you build your retirement portfolio. You can choose to invest your money among the different funds by calling or through the website. Each of the investment funds offered is described below from lowest to highest risk: Core s: Stable Value (Invesco Stable Value ) This fund seeks to provide liquidity and safety of principal while providing a higher return over time than that offered by money market funds. This fund invests primarily in a diversified portfolio of investment contracts with insurance companies, banks, and other financial institutions. An investment contract is an agreement whereby the issuing entity promises a specific rate of return for a period of time. Bond (PIMCO Total Return Ticker PTTRX) This fund seeks to provide current income rather than capital appreciation. While bond funds are generally much less volatile than stock funds, the value of this fund will fluctuate with changes in interest rates and with credit considerations. The monthly dividends are also subject to change as interest rates change over time. This fund primarily invests in bonds issued by corporations, mortgage backed securities, agencies of the U.S. government and U.S. Treasury bonds. Balanced (Invesco Equity and Income Ticker ACETX) This fund seeks to provide current income and, secondly, growth of capital through a flexible mix of stocks and bonds. The fund may invest in stocks, bonds, and other fixed-income securities in any proportion that seems warranted by existing or expected market conditions. The fund invests in common stocks or preferred stocks, straight debt securities, U.S. government securities, cash, and equivalents. Large Cap Value (MFS Value - MEIJX) A more conservative equity offering, seeks undervalued, high-quality companies, generally with larger market capitalizations. This fund seeks to manage risk by focusing on companies with characteristics such as low price-to-earnings ratios and high dividend yields. Large Cap Core (American s amental Investors Ticker RFNFX) This fund seeks to provide long-term growth of capital and income primarily through investments in common stocks. The fund s portfolio is widely diversified among U.S. companies that appear to offer solid growth potential at reasonable prices. A special focus is on out-of-favor industries with improving prospects. The fund invests primarily in common stocks or securities convertible into common stocks, bonds, U.S. government securities, and cash. S&P 500 Index (Vanguard Institutional Index Ticker VINIX) This fund seeks to match as closely as possible, before the deduction of expenses, the performance of the S&P 500 Index. The attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the Index, holding each stock in approximately the same proportion as its weighting in the Index. Large Cap Growth (MainStay Large Cap Growth Ticker MLAIX) This fund seeks long-term growth of capital. This fund invests in large growth oriented firms. The fund is well diversified across stocks and industries. The invests in companies typically having some or all of the following attributes: addresses markets with growth opportunities; favorable market share; identifiable and sustainable competitive advantages; a management team that can perpetuate the firm's competitive advantages; and, attractive, and preferably rising, returns on invested capital. Small/Mid Cap Value (Transamerica Mid Cap Value Opportunities - Ticker MVTIX) - This fund pursues long-term capital growth by investing in undervalued medium sized U.S. companies. This fund employs a fundamental research approach to construct a diversified portfolio of securities of companies that the investment team believes are trading at a discounted price to fair value and where a change in the company fundamentals are expected to improve the stock price. The team believes companies with these characteristics will outperform the benchmark over the long-term. 7

8 Small/Mid Cap Growth (Artisan Mid Cap Instl Ticker APHMX) This fund seeks long-term capital appreciation. This fund invests in U.S. mid-cap growth companies that are selling at attractive valuations and benefiting from an accelerating profit cycle. This fund tends to be more volatile than large cap funds. Small Cap Blend (DFA U.S. Small Cap Ticker DFSTX) This funds seeks long-term capital appreciation through investments in small-capitalization and micro-capitalization companies. DFA focuses on approximately the smallest 10% of the U.S equity universe by market capitalization. Within this universe, companies with the lowest profitability and high relative prices are excluded from eligibility for purchase, and further quality considerations are used to further refine the stocks ultimately purchased. The also controls investment costs by using a disciplined and patient trading strategy. International (American s EuroPacific Growth Ticker RERFX) This fund seeks to provide long-term growth of capital by investing in companies based outside the United States. This international fund can only own securities of issuers domiciled outside the United States. It invests in strong, growing companies based chiefly in Europe and the Pacific Basin, ranging from small firms to large corporations. Age-Based s - The age-based funds start with a fund for those age 35 and under, and increase in five-year intervals to age 71 and above. You can choose how you want your existing balance invested, and if you want your future contributions invested differently, you can also choose how you want those contributions invested. You can change the investment of your existing balance and the investment of your future contributions at any time, however, the allowable frequency of trading is determined by each mutual fund. If it is determined that the number of shares requested to be liquidated and reinvested in other funds on any day (with respect to any investment fund) cannot be liquidated that day for any reason, the liquidation will be processed in an orderly manner as soon as possible. In that case, you will receive the average price for the shares sold over the liquidation period and your proceeds will be available for reinvestment at the end of that period. Please note: If you transfer money out of a mutual fund that has not been held in that fund for the required holding period you may be charged a fee by the mutual fund company in accordance with their short-term redemption fee policy. You can review the short-term redemption fee policy through the voice response system or the website. If you would like to receive a prospectus on any of these funds you can request them through the voice response system or the website. How Far Have You Gone? Four times a year, you will receive a statement that shows your account balance and other important facts. When you see how far you have gone, you will know how far you have to go. Your quarterly account statements for the Retirement Savings Plan, as well as the Stock Purchase Plan, are available online at if you so choose. You can request to receive your quarterly statements at your home address or to view them online by visiting Your statement delivery method will initially be defaulted to a paper statement mailed to your home (unless you have a Company in which case you will be defaulted to an online statement). You can log into and change the delivery method at any time. You can also choose to receive statement notifications at your personal address. Once you log into the website, just click on Retirement Savings Plan or Stock Purchase Plan, then click on estatements on the left side of the screen. The delivery method in place on the last day of any calendar quarter will determine how you will receive your statements for that quarter ( vs. mail). If you have chosen electronic notification, you will receive an approximately 2-3 weeks following the end of each calendar quarter indicating that your statements are available online. 8

9 Receiving Your Account Generally, there are three ways in which you may receive your account: loans, withdrawals while employed and distributions when employment ends. Withdrawals and distributions are subject to income taxes. Loans Participants who have an account balance of at least $2,000 may be eligible for a loan. You can borrow up to half of your balance (up to a maximum of $50,000 in a 12-month period). The minimum amount you may borrow is $1,000. Loans may be made at any time, and you may have two loans outstanding at any one time. Anyone who is on a leave of absence will not be eligible for a loan until they return to work. The interest rate charged for a loan will be based on competitive rates. The interest rate will continue throughout the term of the loan and must be repaid, through payroll deduction, within five years. A loan initiation fee of $35 will be charged for every new loan that is requested (on the date of request). For example, if you request a loan for $1,000, you will actually have $1,035 taken from your account. Your loan payments will be based on $1,000 and that is the amount, plus interest, that you will pay back. While you do not receive investment earnings on the money you borrow, the interest you pay is credited to your account. So, you are actually paying yourself interest. Withdrawals While Employed Because the IRS encourages long-term savings through plans such as this one, withdrawals while you are employed are available, but limited. You may withdraw part or all of your account if you are age 59 ½ or older, or due to a total and permanent disability. You may also withdraw any amounts that you have voluntarily rolled over from a qualified plan or IRA, regardless of your age. You may also make a withdrawal in the case of a severe financial hardship. You may withdraw only from your savings. Also, you may withdraw only the amount necessary to cover the hardship. Financial hardships, defined by the IRS, are: 1) unreimbursed medical expenses for you, your spouse, dependents or primary beneficiary; 2) the purchase of your primary home; 3) the payment of tuition for post-secondary education for you, your spouse, children, dependents or primary beneficiary; 4) a payment to prevent eviction from or foreclosure on your primary home; (5) burial or funeral expenses for your deceased parent, spouse, children, dependents or primary beneficiary; (6) repair of damage to your principal residence caused by fire, storm or similar casualty if such expenses exceed $100, are not reimbursed by insurance and otherwise qualify for the casualty deduction under federal tax rules (but without regard to the requirement that the expenses exceed 10% of your adjusted gross income). You must take a loan (if available) from your account before you are eligible for a hardship withdrawal. If you take a hardship withdrawal, you will be suspended from all other company plans, except health and life insurance, for six months. Note: Generally, any of these withdrawals while employed are subject to 20% federal withholding for income taxes (plus state withholding if required), and if you are under age 59 1/2, the extra 10% penalty tax for early withdrawal. Distributions You will receive your account when your employment at Tyson ends. Your beneficiary will receive your account if you die. If you are married, your spouse is automatically your beneficiary (unless a waiver is signed). If no beneficiary is chosen, your account will go to your spouse or estate, in that order. When you receive payment, 20% federal will be withheld for income taxes (plus state withholding if required). You may delay paying taxes on your distribution by rolling it over into another qualified plan or into an Individual Retirement Account (IRA). If you do not make a rollover and receive part or all of your account before you are age 59 1/2, you may have to pay a 10% penalty tax in addition to ordinary income tax. This is because the IRS has deemed that plans such as this one should be used for long-term savings. The extra 10% tax does not apply in the case of death, total disability or retirement on or after age 55. The tax laws are complicated, and you should contact the IRS or a tax advisor before deciding the best approach. Plan Administration Fees In addition to charging a loan initiation fee, other administration fees incurred by the Plan will be charged to participants on a monthly basis. 9

10 GUIDE TO VOICE RESPONSE SYSTEM AND WEBSITE The voice response system ( Tyson Benefit Connection ) and the website ( tysonbenefits.com ) are designed to provide you with easy access to your stock and retirement accounts. You can access the voice response system by calling toll-free You can access the website through the Tyson Intranet or from a home computer by going to You will need your Personnel Number and a Personal Identification Number (or PIN) to access the system. Your PIN will initially be set to the last four digits of your Social Security Number. You will be prompted to change your PIN the first time you access the voice response system or the website. Voice Response System - The numbers indicate the numbers on your touch-tone phone. Simply follow the voice instructions for each step. Dial English Version 2 Spanish Version Enter Personnel Number Set Up/Enter PIN # (or press [1] to request a PIN copy) Stock Purchase Plan Retirement Savings Plan Change PIN # 1 Check Share Balance, Request Sale of Shares, Request Issue of Shares, Change a Request Made Today 1 Plan Check Account Balance 1 Individual Balances 2 Loan Information 2 Enroll in the Plan or Change Contribution Deduction 3 4 Change Contribution Deduction Change Investment Selections 5 Description of the Investment s/request a Prospectus 7 Opt In or Out of InvestForward Website After logging into you will be prompted to choose which plan you wish to receive information for. After choosing that plan, all options will show on the left side bar, including the ability to change which plan you are accessing. Rev. 8/