Tyson Foods 2008 Annual Report Download - page 52

50 Tyson Foods, Inc.
Notes to Consolidated Financial Statements (continued)
PERFORMANCE-BASED SHARES
In July 2003, our Compensation Committee authorized us to award
performance-based shares of our Class A stock to certain senior
executive offi cers on the fi rst business day of each of the Company’s
2004, 2005 and 2006 fi scal years. The Compensation Committee later
authorized the expansion of the awards to include additional senior
offi cers and to extend out to fi scal year 2008. The vesting of the
performance-based shares for the 2006 award is over two and one-
half to three years and the vesting for the 2007 and 2008 awards is
over three years (the Vesting Period), each award being subject to the
attainment of goals determined by the Compensation Committee
prior to the date of the award. We review progress toward the attain-
ment of goals each quarter during the Vesting Period. However, the
attainment of goals can be determined only at the end of the Vest-
ing Period. If the shares vest, the ultimate cost will be equal to the
Class A stock price on the date the shares vest times the number of
shares awarded for all performance grants with other than market
criteria. For grants with market performance criteria, the ultimate cost
will be the fair value of the probable shares to vest regardless if the
shares actually vest. Total expense recorded related to performance-
based shares was not material for fi scal years 2008, 2007 and 2006.
NOTE 13: PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Effective September 29, 2007, we adopted SFAS No. 158, which
requires the recognition in pension obligations and accumulated
other comprehensive income of actuarial gains or losses, prior
service costs or credits and transition assets or obligations previ-
ously deferred under the reporting requirements of SFAS No. 87,
SFAS No. 106 and SFAS No. 132(R). The following table refl ects the
effects of adoption of SFAS No. 158 on the Consolidated Balance
Sheet as of September 29, 2007.
Before After
Application of Application of
in millions SFAS No. 158 Adjustments SFAS No. 158
Other assets $ 332 $(5) $ 327
Total assets 10,232 (5) 10,227
Deferred income taxes 366 1 367
Other liabilities 381 (9) 372
Accumulated other
comprehensive income 47 3 50
Total shareholders’ equity 4,728 3 4,731
Total liabilities and
shareholders’ equity 10,232 (5) 10,227
At September 27, 2008, we had four noncontributory defi ned benefi t
pension plans consisting of three funded qualifi ed plans and one
unfunded non-qualifi ed plan. All three of our qualifi ed plans are
frozen and provide benefi ts based on a formula using years of ser-
vice and a specifi ed benefi t rate. Effective January 1, 2004, we imple-
mented a non-qualifi ed defi ned benefi t plan for certain contracted
offi cers that uses a formula based on years of service and fi nal average
salary. We also have other postretirement benefi t plans for which
substantially all of our employees may receive benefi ts if they satisfy
applicable eligibility criteria. The postretirement healthcare plans
are contributory with participants’ contributions adjusted when
deemed necessary.
We have defi ned contribution retirement and incentive benefi t
programs for various groups of employees. We recognized expenses
of $48 million, $46 million and $55 million in fi scal 2008, 2007 and
2006, respectively.
We use a fi scal year end measurement date for our defi ned benefi t
plans and other postretirement plans. We generally recognize the
effect of actuarial gains and losses into earnings immediately for
other postretirement plans rather than amortizing the effect over
future periods.
Other postretirement benefi ts include postretirement medical costs
and life insurance.