Tyson Foods 2012 Annual Report Download - page 63

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63
Restricted Stock
We issue restricted stock at the market value as of the date of grant, with restrictions expiring over periods through 2015. Unearned
compensation is recognized over the vesting period for the particular grant using a straight-line method.
Number of Shares
Weighted
Average Grant-
Date Fair Value
Per Share
Weighted Average
Remaining
Contractual Life
(in Years)
Aggregate
Intrinsic Value
(in millions)
Nonvested, October 1, 2011 2,970,302 $ 14.70
Granted 639,421 17.73
Dividends 20,587 18.79
Vested (1,152,468) 15.20
Forfeited (106,272) 16.30
Nonvested, September 29, 2012 2,371,570 $ 15.29 1.0 $ 38
As of September 29, 2012, we had $13 million of total unrecognized compensation cost related to restricted stock awards that will be
recognized over a weighted average period of 1.0 year.
We recognized stock-based compensation expense related to restricted stock, net of income taxes, of $7 million, $7 million and $8
million for fiscal 2012, 2011 and 2010, respectively. The related tax benefit for fiscal 2012, 2011 and 2010 was $4 million, $5 million
and $5 million, respectively. We had 1.2 million, 0.9 million and 1.8 million restricted stock awards vest in fiscal 2012, 2011 and
2010, respectively, with a grant date fair value of $17 million, $14 million and $30 million, respectively.
Performance-Based Shares
In July 2003, our Compensation Committee began authorizing us to award performance-based shares of our Class A stock to certain
senior executives. These awards are typically granted on the first business day of our fiscal year. The vesting of the performance-based
shares is generally over three years and each award is subject to the attainment of goals determined by the Compensation Committee
prior to the date of the award. We review progress toward the attainment of goals each quarter during the vesting period. However, the
attainment of goals can be determined only at the end of the vesting period. If the shares vest, the ultimate cost will be equal to the
Class A stock price on the date the shares vest multiplied by the number of shares awarded for all performance grants with other than
market criteria. For grants with market performance criteria, the ultimate expense 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 fiscal 2012,
2011 and 2010.
NOTE 14: PENSIONS AND OTHER POSTRETIREMENT BENEFITS
At September 29, 2012, we had four noncontributory defined benefit pension plans consisting of three funded qualified plans and one
unfunded non-qualified plan. All three of our qualified plans are frozen and provide benefits based on a formula using years of service
and a specified benefit rate. Effective January 1, 2004, we implemented a non-qualified defined benefit plan for certain contracted
officers that uses a formula based on years of service and final average salary. We also have other postretirement benefit plans for
which substantially all of our employees may receive benefits if they satisfy applicable eligibility criteria. The postretirement
healthcare plans are contributory with participants’ contributions adjusted when deemed necessary.
We have defined contribution retirement programs for various groups of employees. We recognized expenses of $47 million, $45
million and $48 million in fiscal 2012, 2011 and 2010, respectively.
We use a fiscal year end measurement date for our defined benefit plans and other postretirement plans. We 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 benefits include postretirement medical costs and life insurance.