Prudential 2002 Annual Report Download - page 128
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Please find page 128 of the 2002 Prudential annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
15. EARNINGS PER SHARE (continued)
Class B Stock
The net income (loss) attributable to the Closed Block Business available to holders of Class B Stock after
direct equity adjustment for the year ended December 31, 2002 and the period December 18, 2001 through
December 31, 2001 amounted to $(528) million and $3 million, respectively. For the year ended December 31,
2002, the direct equity adjustment resulted in an increase of $43 million in the net loss attributable to the Closed
Block Business applicable to holders of Class B Stock for earnings per share purposes. There was no direct equity
adjustment in 2001. For the year ended December 31, 2002 and the period December 18, 2001 through December
31, 2001, the weighted average number of shares of Class B Stock used in the calculation of basic earnings per
share amounted to 2,000,000 shares. There are no potentially dilutive shares associated with the Class B Stock.
16. STOCK-BASED COMPENSATION
Stock Options
The Company’s Board of Directors adopted the Prudential Financial, Inc. Stock Option Plan (the “Plan”).
Nonqualified Stock Options and Incentive Stock Options as well as Stock Appreciation Rights (“SARs”) are
eligible for grant under the Plan. Participants can be employees and non-employees (i.e., statutory agents who
perform services for the Company and participating subsidiaries). Under the Plan, the Company can make two
types of grants, an Associates Grant and general grants (the “Executive Grants”). The Associates Grant, which
occurred in December 2001, was a one-time broad based award that granted 240 stock options per full-time
participant and 120 options per part-time participant. The Executive Grants, which began in 2002, are awarded to
executives on a recurring basis primarily as replacement for a portion of long-term cash compensation. Each stock
option granted under either type of grant has or will have an exercise price no less than the fair market value of
the Company’s Common Stock on the date of grant and has a maximum term of 10 years. Generally, one third of
the option grant vests in each of the first three years. Under the Plan, a total of 12,322,009 shares were initially
authorized for the Associates Grant and a total of 30,805,024 shares were initially authorized for the Executive
Grants. At December 31, 2002, 20,629,310 authorized shares remained available for grants of stock options and
SARs for the Executive Grants. As of December 31, 2002, there have not been any grants of SARs.
Prudential Financial 2002 Annual Report 127