Tyson Foods 2000 Annual Report Download - page 43

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2000 ANNUAL REPORT
The following table summarizes information about stock options outstanding at September 30, 2000:
Options outstanding Options exercisable
Weighted average
Range of Shares remaining contractual Weighted average Shares Weighted average
exercise prices outstanding life (in years) exercise price exercisable exercise price
$14.33 – 14.50 2,057,730 3.9 $14.40 1,807,110 $14.40
14.58 – 15.17 1,566,050 6.0 15.04 552,825 15.04
17.92 – 18.00 3,174,225 6.1 17.93 567,045 17.92
6,798,005 2,926,980
The Company did not grant any options during 2000.
The weighted average fair value of options granted during
1999 was approximately $5.06. The fair value of each
option grant is established on the date of grant using the
Black-Scholes option-pricing model. Assumptions include an
expected life of 5.5 years, risk-free interest rates ranging
from 5.5% to 6.4%, expected volatility of 0.2% and divi-
dend yield of 0.5% in 1999.
The Company applies Accounting Principles Board
Opinion No. 25 and related Interpretations in accounting
for its employee stock option plans. Accordingly, no compen-
sation expense was recognized for its stock option plans. Had
compensation cost for the employee stock option plans
been determined based on the fair value method of account-
ing for the Company’s stock option plans, the tax-effected
impact would be as follows:
in millions, except per share data
2000 1999 1998
Net income
As reported $ 151 $ 230 $ 25
Pro forma 148 226 21
Earnings per share
As reported
Basic 0.67 1.00 0.11
Diluted 0.67 1.00 0.11
Pro forma
Basic 0.66 0.98 0.09
Diluted 0.65 0.98 0.09
Pro forma net income reflects only options granted after
1997. Additionally, the pro forma disclosures are not likely
to be representative of the effects on reported net income for
future years.
NOTE 12: BENEFIT PLANS
The Company has defined contribution retirement and incentive
benefit programs for various groups of Company personnel.
Company contributions totaled $32 million, $33 million and
$32 million in 2000, 1999 and 1998, respectively.
NOTE 13: TRANSACTIONS WITH
RELATED PARTIES
The Company has operating leases for farms, equipment
and other facilities with the Senior Chairman of the Board
of Directors of the Company and certain members of his
family, as well as a trust controlled by him, for rentals of
$7 million in 2000, $7 million in 1999 and $5 million in
1998. Other facilities have been leased from other officers
and directors for rentals totaling $3 million in 2000, 1999
and 1998.
Certain officers and directors are engaged in chicken and
swine growout operations with the Company whereby these
individuals purchase animals, feed, housing and other items
to raise the animals to market weight. The total value of these
transactions amounted to $11 million in 2000, $10 million
in 1999 and $12 million in 1998.
Certain unimproved real property was sold by the Company
in June 2000 to an entity controlled by the daughter and son-in-
law of the Senior Chairman of the Board for approximately
$5 million. The purchase price was in excess of the market
value as determined by a current independent appraisal.
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