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Notes to Financial Statements (Continued)
14. Capital Stock

     The Company has stock option plans for which it is authorized to grant options to purchase up to 9.3 million shares of the Company's common stock, of which 1.4 million shares remain available for grant as of December 31, 2002. Stock options may be granted to officers, key employees and non-employee directors with an exercise price not less than the fair market value of the common stock on the date of grant.

     In 2002, the Company granted key employees and non-employee directors 109,894 restricted shares of common stock with a fair value of $2.3 million on the date of grant, all of which vest over five years. In 2001, the Company granted key employees and non-employee directors 155,515 restricted shares of common stock with a fair value of $2.3 million on the date of grant. The shares vest over a three to five year period with 10,015 shares vesting over a three year period and 145,500 shares vesting over a five year period. In 2000, the Company granted key employees and non-employee directors 14,052 restricted shares of common stock with a fair value of $0.2 million on the date of grant. The shares vest over a three year period. A total of 9,130 and 11,850 shares of restricted stock were forfeited in 2001 and 2000, respectively. The Company incurred compensation expense totaling $1.7 million, $0.7 million and $0.8 million related to the vesting of restricted stock during the years ended December 31, 2002, 2001 and 2000, respectively. The Company also recorded $0.3 million of compensation expense related to the vesting of restricted stock as part of its 2001 restructuring accrual related to 46,064 shares.

     A summary of the option activity under the stock option plans is as follows as of December 31, 2002, 2001 and 2000:

2002 2001 2000
Fixed Options    Shares    Weighted
Average
Exercise Price
   Shares    Weighted
Average
Exercise Price
   Shares    Weighted
Average
Exercise Price
Outstanding at beginning of year 3,095,589   $13.56   4,306,584   $12.39   3,907,326   $11.19
Granted 601,895   $21.53   348,836   15.08   1,187,845   15.71
Exercised (442,869)   $13.01   (1,363,050)   9.90   (288,634)   7.22
Cancelled (142,624)   $16.83   (196,781)   15.52   (499,953)   15.10
     Outstanding at end of year 3,111,991   $15.03   3,095,589   $13.56   4,306,584   $12.39
Options exercisable at year end 1,533,471   $12.96   1,374,395   $12.52   2,035,332   $10.49
Weighted average fair value of
   options granted during the year
    $ 8.95       $ 7.67       $ 3.78

     The following table summarizes information about stock options outstanding at December 31, 2002:

Options Outstanding Options Exercisable
Range of Exercise Prices    Number
Outstanding at 12/31/02
    Weighted
Average
Remaining Contractual Life 
   Weighted Average
Exercise Price
   Number
Outstanding at 12/31/02
   Weighted
Average
Exercise Price
$ 5.00 to   9.00 111,741   3.8 years   $ 7.27   75,741   $ 7.01
9.01 to 13.00 1,206,076   5.2 years   $12.09   887,267   $12.02
13.01 to 17.00 1,208,147   6.2 years   $15.59   566,463   $15.20
17.01 to 21.00 40,000   9.0 years   $19.36   4,000   $17.80
21.01 to 25.00 506,027   9.0 years   $21.22    
25.01 to 29.00 40,000   6.5 years   $26.06    
  3,111,991   6.2 years   $15.03   1,533,471   $12.96

     SFAS No. 123 "Accounting for Stock-Based Compensation," requires companies to provide additional note disclosures about employee stock-based compensation plans based on a fair value method of accounting. As permitted by this accounting standard, the Company continues to account for these plans under APB Opinion 25.

     For purposes of the pro forma disclosure included in the stock based compensation section of Note 1, compensation cost for the Company's stock option plan was determined based on the fair value at the grant dates for awards under those plans consistent with the method of SFAS No. 123. The fair value of each option grant has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2002, 2001 and 2000:

     2002    2001    2000
Risk-free interest rate   3.58%   5.03%   5.10%
Volatility   35.43%   43.3%   56.6%
Expected Lives   6 years   10 years   10 years
Dividend Yield   0%   0%   0%

     The Company announced a stock repurchase program on June 25, 1998. Treasury stock is carried at cost in the accompany consolidated balance sheets and consolidated statements of shareholders' equity (deficit) and comprehensive income. Through December 31, 2002, the Company had repurchased 26.5 million shares of its common stock at a total cost of $434.9 million, including 5.4 million shares of common stock at a total cost of $120.9 million during the year ended December 31, 2002. During 2002, the Company repurchased 1.7 million shares at a total cost of $41.7 million from the Company's largest shareholder and family. From December 31, 2002 through March 11, 2003, the Company has purchased 1.3 million shares at a total cost of $30.3 million, including 0.5 million shares at a total cost of $12.3 million from the Company's largest shareholder and family.

     The Company paid approximately $41,000 to and received approximately $104,000 from corporations owned or controlled by family members of the Company's largest shareholder related to the lease of personal and real property during 2002.

15. Comprehensive Income

     The components of total accumulated other comprehensive income in the balance sheet are as follows:

December 31,
      2002         2001         2000
  (In thousands)
Unrealized (losses) gains on available-for-sale securities   $ (80)     $(202)     $ 108
Foreign currency translation adjustments   (235)     (576)     (162)
Deferred gain on hedging activity   357     424    
Total accumulated other comprehensive income (loss)   $ 42     $(354)     $(54)

    The components of total accumulated other comprehensive income are as follows:

    Amount Before
Taxes
     Income Tax
(Expense)/Benefit
     Amount Net of Taxes
  (In thousands)
2002                
Net unrealized gains $ 195   $ (73)   $ 122
Foreign currency translation adjustment, net   341         341
Amortization of deferred gain on hedge   (67)         (67)
Total other comprehensive income $ 469   $ (73)   $ 396
2001
               
Net unrealized losses $ (179)   $ (131)   $ (310)
Foreign currency translation adjustment, net   (414)         (414)
Total other comprehensive loss $ (593)   $ (131)   $ (724)
2000                
Net unrealized gains $ 844   $ (317)   $ 527
Foreign currency translation adjustment, net   (1,786)         (1,786)
Total other comprehensive loss $ (942)   $ (317)   $ (1,259)

     Below represents the detail of other comprehensive income:

December 31,
      2002         2001         2000
Unrealized holding gains (losses) arising during the period, net   $122     $(352)   $ (176)
Less: reclassification adjustments for losses/gains included in net income       42   $ 703
Net unrealized holding gains (losses) arising during the period   $122     $(310)   $ 527
Foreign currency translation adjustments   $341     $(414)   $ (291)
Plus: reclassification of loss on liquidation of foreign subsidiaries         $ (1,495)
Net foreign currency translation adjustments   $341     $(414)   $ (1,786)
Amortization of deferred gain on hedging activity   $(67)     $ —   $

     In December 1999, the Company entered into an interest rate swap agreement to fix certain of its variable rate debt in order to reduce the Company's exposure to fluctuations in interest rates. On March 3, 2000, the interest rate swap agreement was settled resulting in a deferred gain. In accordance with SFAS 133, the unamortized gain was reclassified in 2001 to other comprehensive income and is being amortized over the remaining life of the related debt as a reduction of interest expense. Amortization of approximately $67,000 was recorded in 2002 related to this deferred gain.

 
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