Tyson Foods 2003 Annual Report Download - page 53

Tyson Foods, Inc. 51
notes to consolidated financial statements
TYSON FOODS, INC. 2003 ANNUAL REPORT
note 11:
comprehensive income (loss)
The components of accumulated other comprehensive
income (loss) include: foreign currency translation adjust-
ment of $(2) million, $(23) million and $(16) million for
2003, 2002 and 2001, respectively; unrealized hedging
gains (losses), net of taxes, of $(9) million, $(18) million
and $(21) for 2003, 2002 and 2001, respectively; unreal-
ized gain (loss) on investments, net of taxes, of $1, $0
and $2 million for 2003, 2002 and 2001, respectively; and
minimum pension liability adjustment, net of taxes, of
$(5) million and $(8) million for 2003 and 2002, respectively.
note 12:
stock options and restricted stock
The shareholders approved the Tyson Foods, Inc. 2000
Stock Incentive Plan (Incentive Plan) in January 2001.
The Incentive Plan is administered by the Compensation
Committee of the Board of Directors and permits awards
of shares of Class A stock, awards of derivative securities
related to the value of Class A stock and tax reimburse-
ment payments to eligible persons. The Incentive Plan
provides for the award of a variety of equity-based incen-
tives such as incentive stock options, nonqualified stock
options, stock appreciation rights, dividend equivalent
rights, performance unit awards and phantom shares.
The Incentive Plan provides for granting incentive stock
options for shares of Class A stock at a price not less
than the fair market value at the date of grant. Non-
qualified stock options may be granted at a price equal
to, less than or more than the fair market value of Class A
stock on the date that the option is granted. Stock options
under the Incentive Plan generally become exercisable rat-
ably over three to eight years from the date of grant and
must be exercised within 10 years from the date of grant.
In May 2000, the Company cancelled approximately four
million option shares and granted approximately one
million restricted shares of Class A stock. The restriction
expires over periods through December 1, 2003. At
12
11
September 27, 2003, the Company had outstanding
approximately nine million restricted shares of Class A
stock with restrictions expiring over periods through
July 1, 2020. The unearned portion of the restricted stock
is classified on the Consolidated Balance Sheets as
unamortized deferred compensation in shareholders’
equity. The Company issues restricted stock at the market
value as of the date of grant. The weighted average fair
value of restricted stock granted was $11.20 per share
during 2003 and $9.52 per share during 2002.
A summary of the Company’s stock option activity is as
follows: Weighted average
Shares exercise price
under option per share
Outstanding,
September 30, 2000 6,798,005 $16.19
Exercised – –
Canceled (689,520) 15.57
Granted 4,291,650 11.50
Options assumed with
IBP acquisition 5,918,068 8.70
Outstanding,
September 29, 2001 16,318,203 12.27
Exercised (800,596) 9.50
Canceled (997,816) 12.97
Granted 2,509,695 9.45
Outstanding,
September 28, 2002 17,029,486 12.01
Exercised (775,682) 8.99
Canceled (1,697,581) 13.38
Granted 6,316,704 11.69
Outstanding,
September 27, 2003 20,872,927 $11.94
The number of options exercisable was as follows:
September 27, 2003–9,135,306, September 28, 2002–
9,373,360 and September 29, 2001–9,644,323. The remain-
der of the options outstanding at September 27, 2003, are
exercisable ratably through September 2008. The number
of shares available for future grants was 21,327,929 and
10,536,763 at September 27, 2003, and September 28,
2002, respectively.