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SUSTAINABILITY REPORT

We are committed to attracting, developing, and retaining a group of talented Team Members and to creating a workplace that allows each Team Member to contribute to the collective success of our company. Our programs and initiatives related to employment practices, compensation and benefits, talent management, diversity and inclusion, and Team Member relations are important to fulfilling this commitment, especially in today’s challenging economic climate. To be an inspiration to our Team Members about their work, their contributions, and their company is our pledge.

Our Team Members
Tyson Foods employs more than 115,000 people worldwide. As of September 2012, there were 96,000 Team Members working in our U.S.-based operations and, as of August 2012, there were 19,000 Team Members working in our International operations. The vast majority of our U.S.-based Team Members serve in full-time positions.

The company’s management, management support, and hourly Team Member turnover rate trended downward in fiscal year 2012 as compared to fiscal year 2011. At the end of fiscal year 2012, over 50-percent of our U.S.-based Team Members had five or more years of service with Tyson Foods, and within this group, approximately 11 percent had 20 years or more of service.

Hiring the Best
Tyson Foods maintains a robust recruiting process that not only ensures our compliance with federal, state, and local hiring practices, it also ensures we are hiring Team Members with skills and experience that align with both the current and future needs of our company. Our Professional Recruitment Department collaborates with hiring managers to develop proactive talent management plans for each business unit. Our College Relations Department forecasts the entry-level needs of the organization and leverages our college recruiting strategies to support local area universities. In addition, we understand the importance of attracting and hiring talent local to our operations. Many of our facilities and offices maintain local hiring practices designed to ensure their Team Member and management positions are populated with local residents.

drive.tyson.com In fiscal year 2012, Tyson Foods launched an initiative to move its hourly application process from a time-intensive and cumbersome paper trail to an online, easy-to-access process. The company’s eRecruiting program will provide job candidates access to their application 24/7, automated posting to online job boards, mass emailing to qualified candidates, and centralized data storage and record retention. This new process will drive value for the business and enhance the overall recruiting experience for applicants.

Tyson Foods held its first Military Operations Summit in October 2012 for current and former members of the military. Modeled after similar events for college graduates, the summit featured a tour of a poultry plant and the company’s headquarters in Springdale, Arkansas. During the summit, senior leaders from Tyson Foods met with the 27 attendees. As a part of our commitment to hire more veterans, each attendee was also interviewed for open operations positions.

Camo to Khaki The company has also established a special “Camo to Khaki” human resources team to increase the hiring of veterans and their spouses. (Many Tyson Team Members wear khaki uniforms as part of a tradition begun by the late Chairman and CEO Don Tyson). This effort has included increased involvement in military job fairs and the addition of a military hiring section to the company’s corporate website. Tyson Foods has also hired a full-time recruiter who will solely focus on hiring military veterans. “We’ve found that military veterans make excellent Team Members who are well-trained and have a work ethic that fits the Tyson Foods’ culture,” says Ryan Penner, recruiting manager for Tyson Foods. “Our company appreciates and supports our nation’s veterans, and we’re always looking to hire more.” Visit the military hiring section of our corporate website.

K. Kimbro at IMAGE Program Signing
(right to left) Ken Kimbro, Tyson Foods’ senior vice president and chief human resources officer, and John Morton, director of U.S. Immigration and Customs Enforcement, at the signing ceremony where Tyson Foods became the first major food company to become a full member of the IMAGE program.
Employment Eligibility
We are committed to ensuring all of our hiring locations consistently implement and follow our Employment Eligibility Policy. This policy sets forth guidelines for all Tyson Foods’ locations that ensure compliance with the Immigration Reform and Control Act of 1986 (IRCA) and Form I-9 regulations. We will not tolerate any person knowingly hiring or allowing anyone to continue working if he or she is not authorized for employment, and we have established procedures to ensure compliance with all federal and state laws regarding the verification of employment authorization.

In January 2011, Tyson Foods became the first major food company to become a full member of the IMAGE program with U.S. Immigration and Customs Enforcement (ICE). IMAGE is short for ICE Mutual Agreement between Government and Employers. The program enables businesses, if they meet rigorous standards, to voluntarily partner with the federal government to ensure they are employing people who are legally authorized to work in the United States. Moreover, we remain a voluntary participant in the U.S. Department of Homeland Security’s E-Verify Employment Eligibility Verification Program, and we voluntarily use the Social Security Number Verification System.

Equal Employment Opportunities
We maintain a policy to ensure fair and equal employment opportunities are extended to all persons without regard to race, religion, color, sex (including pregnancy), age, sexual orientation, national origin, disability, genetic information, and veteran’s status or any other protected status under federal, state, or local law. This policy applies to recruitment, selection, placement, assignment, training, promotion, demotion, rate of pay, benefits, leave of absence, lay-off, termination, and other conditions of employment.

In September 2011, Tyson Fresh Meats, Inc., a division of Tyson Foods, entered into two consent decrees to settle allegations of sex discrimination. The charges issued by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) were strictly based on a statistical analysis of job applications at the facilities, rather than on complaints made by applicants, the types of jobs involved, or the applicant’s qualifications. A total of $2.25 million in back wages, interest, and benefits will be paid to more than 1,650 qualified female job applicants who were rejected for employment at facilities in Joslin, Illinois; West Point, Nebraska; and Waterloo and Denison, Iowa, between 2002 and 2004. The West Point plant closed in 2006. The company will offer jobs to at least 220 of the affected women as positions become available in Joslin, Waterloo, and Denison. Several years prior to entering into the consent decrees, the company voluntarily initiated its own independent review of hiring processes. Substantive changes included improved training for staff members involved in the hiring process and more frequent audits of employment practices.

R. Tooley and J. David at White House
(left to right) Russell Tooley, Senior Vice President of Corporate and International Human Resources, and James David, Pricing Manager in the Consumer Products Division, attended a Champions of Change meeting at the White House November 9, 2011.

Supporting Military Veterans
In November 2011, two Tyson Foods Team Members – Russell Tooley, senior vice president of corporate and international human resources, and James David, pricing manager with the company’s consumer products division – were recognized as “Champions of Change” by the White House. Each week, President Barack Obama’s Administration recognizes individuals and businesses that create jobs in the United States and make positive impacts in the communities where they operate. Different issues are highlighted each week and Tyson Foods was chosen to participate in one week’s discussions about the benefits of hiring military veterans in the corporate world due to the company’s continued efforts to employ veterans, reservists, and their family members. “These are the leaders this country needs, people who are working to build in America and create jobs in America,” the White House states on its Champions of Change website.

Other ways in which the company supports the U.S. military include:

  • Tyson Foods employs about 3,000 military veterans and is a member of the American Logistics Association whose members have committed to hiring 25,000 military veterans and military spouses.
  • The company employs more than 500 military family members and veterans who help stock Tyson Foods products at military commissaries.
  • Tyson Foods provides differential pay for all Team Members called to active military duty, making up the difference between military compensation and pay they normally receive from the company. Since September 11, 2001, Tyson Foods has provided over $2 million in differential pay to almost 400 Team Members.
  • The company is one of the leading suppliers of food to the Defense Commissary Agency (DeCA) and has been helping feed the U.S. military and their families for more than 50 years.

Harassment and Discrimination
We maintain a strict policy prohibiting any kind of unlawful harassment and discrimination, such as that involving race, sex, religion, color, age, national origin, veteran’s or disability status, genetic information, or sexual orientation. This policy prohibits harassment and discrimination in any form, including verbal, written, visual or physical. We require that 100 percent of our Team Members, including management and non-management and salaried and hourly, participate in mandatory anti-harassment and anti-discrimination training annually.

Human Rights
Tyson Foods’ human rights practices are grounded in the company’s Core Values, Code of Conduct, and Team Member Bill of Rights. These documents outline the many rights, benefits, and responsibilities enjoyed by the Team Members of Tyson Foods. These rights, benefits, and responsibilities correspond with or are in addition to all other rights provided by state or federal law. We require that 100 percent of our Team Members, including the Board of Directors, participate in mandatory ethics and Code of Conduct training annually.

Labor Relations
Pursuant to our Team Member Bill of Rights, we respect each Team Member’s legal right to organize without fear of retaliation, repression, or any other form of discrimination. As of September 29, 2012, approximately 29,000 Team Members in the U.S. were subject to collective bargaining agreements with various labor unions, with approximately 19-percent of those Team Members included under agreements expiring in fiscal year 2013. The remaining agreements expire over the next several years. Approximately 8,000 Team Members in foreign countries were also subject to collective bargaining agreements at that time. We believe our overall relations with our Team Members are good.

When significant operational changes are imminent, we notify our Team Members as required by the U.S. Department of Labor Worker Adjustment and Retraining Notification Act (WARN); local, state, or country-specific laws; or any requirements set forth in respective collective bargaining agreements.

Compensation and Benefits
Tyson Foods believes in sharing its success with its Team Members, and we believe our compensation and benefits package is one of the best in the industry. We employ full-time and part-time hourly and salaried Team Members. During fiscal year 2012, we spent more than $3.6 billion dollars in salaried and hourly compensation, social security and Medicare tax, federal unemployment tax, and state unemployment tax for our full and part-time U.S. based Team Members.

The majority of our Team Members are compensated at an hourly rate and support our company by preparing food products in processing plants. These Team Members are compensated at or above U.S. minimum wage requirements. Specifically, during fiscal year 2012, our average hourly rate was $12.27 per hour, which is 69 percent higher than the federal minimum wage.

In addition to compensation, we are committed to partnering with our Team Members to help them become better health care consumers. We provide affordable health, life, dental, vision, and prescription drug benefits to our Team Members and their families. We require all Team Members, who have been employed for more than three months, to enroll in the company-sponsored health plan or to provide proof of enrollment in another health plan. Therefore, 100 percent of the company’s eligible Team Members have access to health care coverage. Tyson Foods had benefits costs in excess of $391 million for our U.S.-based operations during fiscal year 2012.

Benefits Offered Chart

Talent Management
Tyson Foods recognizes the importance of having both strong current leaders and future bench strength. Our Diversity and Leadership Development Department and other areas in Human Resources maintain several programs designed to enhance both personal and organizational effectiveness.

  • 3-D Training Program
    Fifteen front-line supervisors from 14 locations participated in Tyson Foods’ first 3-D Training Program.
    Many of our Team Members must complete annual regulatory and company-mandated compliance training requirements such as those related to food safety, environmental protection, animal well-being, transportation safety, harassment and discrimination, ethical business conduct, and workplace safety. We also offer vocational training for Team Members with specific skills or trades. The type of training and hours of training a Team Member takes varies based on job responsibilities.
  • The Tyson Foods Leadership College provides training focused on seven core leadership competencies, which are divided into three levels of complexity including leadership, business acumen, strategic agility, communication, building a culture of inclusion, developing self and others, and understanding Tyson Foods. During fiscal years 2010, 2011, and 2012, more than 5,000 management and management support Team Members participated in training provided by the Tyson Foods Leadership College.
  • Tyson Foods’ Educational Assistance Program encourages and enables Team Members to further their education. During fiscal years 2010, 2011, and 2012, 495 Team Members took advantage of this program, with the company’s overall investment in the program during this time totaling more than $1.4 million dollars. In addition, many of our Team Members become U.S. citizens by way of our Educational Assistance Program.
  • Leaders Into Champions (LINC) is an advanced leadership program at Tyson Foods designed to empower our high-potential leaders as organizational and industry champions who contribute significantly to the performance and profitability of the company. The LINC program structure is centered on engagement, empowerment, and growth.
  • In January 2012, Tyson Foods’ Poultry and Prepared Foods divisions launched its Discover, Develop, and Deploy (3-D) training program for the company’s front-line supervisors. The training program includes nine weeks of basic training in Northwest Arkansas in which participants learn about all aspects of the poultry business, including: live production; first, second, and third processing; environmental, health, and safety; food safety and quality assurance; standard costing; margin management; human resources; transportation; and warehousing and lean manufacturing. Training also focuses on building core leadership skills, while creating a strong team among the participants. Participants then return to their respective locations to complete an additional six weeks of technical training in the business process in which they work. Team Members take assessments after each training segment to certify in each area. The program is built so that 90-percent of their time is hands-on training in the field.

We also provide a structured approach to job rotations and succession planning. Formal job rotations provide Team Members with expanded experience, enhanced functional skills across our business, and strengthen our culture of talent development. Through the succession planning process, we identify critical jobs based on business strategy and identify a slate of Team Member candidates capable of filling these positions.

Performance and Career Development Reviews
Tyson Foods’ management and management support Team Members participate in regular performance and career development reviews. The Tyson Evaluation and Measurement System (TEAMS) for salaried, management support, and management support technical Team Members aligns individual performance with organizational goals. In addition to the TEAMS review process, we provide Team Members with the training and resources needed to develop an Individual Development Plan (IDP). IDPs are a Team Member’s road map to reaching their career objectives. When a Team Member develops an IDP, they are looking to improve their performance, master competencies for personal and career development, or prepare for future opportunities to take another position or increase responsibility within the company.

Diversity and Inclusion
We are committed to maintaining a culture that fosters inclusion and diversity. We believe the unique ideas and contributions of our Team Members drive our continued business success. Accordingly, we maintain an Executive Diversity Business Council. Composed of senior leaders, this council develops and leads initiatives that foster inclusion and participation of all Team Members. The primary areas of focus for our Executive Diversity Business Council are business resource groups; inclusion and diversity education and communication; and Team Member engagement. Below we highlight a few of our diversity and inclusion activities and initiatives.

Tyson Foods has four Business Resource Groups (BRG) including a Women’s, Men’s, Multicultural, and Veterans. Each BRG has a business plan that outlines initiatives and events that support their specific affinity network that align with our BRG Pillars of Success, which include professional development; business development; community development; and networking, retention, and engagement.

Honor Flight
Tyson Foods CEO Donnie Smith joins WWII Veteran Gilbert Joyner on a 2011 Honor Flight to Washington, D.C.

Major donations from Tyson Foods and the Walmart Foundation, as well as others, allowed more than 80 World War II veterans the opportunity to visit memorials dedicated in their honor during a trip to Washington, D.C., on Saturday, May 5, 2012, as part of the fifth Northwest Arkansas Honor Flight.

“This is a wonderful opportunity to show your support of these veterans from the ‘Greatest Generation’…” said Melissa Lee, a Tyson Foods’ attorney who is chairperson of the company’s Veterans Business Resource Group. Honor Flight Network is a national non-profit organization that started seven years ago in Ohio, with six small planes taking a dozen World War II veterans to see their memorial. Tyson Foods and Walmart have been the primary sponsors of all of the Northwest Arkansas Honor Flights, beginning with the first trip in October 2009.

We continue to implement an extensive inclusion and diversity training program that was originally launched in August 2005. We also continue to share information with our Team Members that recognizes cultural celebrations and highlights important leaders, artists, and entertainers from diverse backgrounds. On a monthly basis, these papers share the history and importance of these celebrations and cultural figures and contribute to our Team Members’ education and awareness of diversity.

G. Baniser at Diversity Education Speaker Series On Friday, February 24, 2012, Gaurdie E. Banister, Jr., Tyson Foods’ newest Board of Directors member, spoke to Team Members about the importance of cultural awareness as part of the company’s Diversity Education Speaker Series. “Cultural awareness begins with you, and it begins with how you see the world,” he said.

We know that working with minority-owned and women-owned businesses is a key to helping us meet our high standards for quality products and ultimately creates more value for our shareholders. As such, we actively look for opportunities to increase our spending with current diverse suppliers; partner with suppliers to encourage diversity in their supply chain; include diverse suppliers in our sourcing opportunities as part of our Sourcing Policy and Procedures; maintain membership in and support events hosted by regional and national minority and women’s organizations; and continue to participate in diversity trade shows and other networking functions.

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