| 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.
|