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NOTE 10 - Stock Options and Restricted
Stock
The Company has a plan under which stock options may be granted to officers
and key employees for the purchase of a maximum of 3,000,000 shares of
common stock. Under the terms of the plan, options may be either incentive
or nonqualified. The options have a term of ten years. The exercise price
per share, determined by a committee of the Board of Directors, may not
be less than the fair market value on the grant date. The options are
exercisable over periods determined when granted.
The Company applies APB Opinion No. 25 "Accounting
for Stock Issued to Employees" and related interpretations in accounting
for its stock option plan. Accordingly, no compensation cost has been
recognized in the Company s financial statements. Had compensation cost
for the Company's Stock option plan been determined based on the fair
value of such awards at the grant dates, consistent with the methods of
SFAS No. 123 "Accounting for Stock-Based Compensation," the
Company's total and per share net income would have been reduced as follows:
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2001 |
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2000 |
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1999 |
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Net income (loss) |
As reported |
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$(49,333) |
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$(29,175) |
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$70,901 |
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Pro forma |
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(49,343) |
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|
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(29,351) |
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67,852 |
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Basic earnings per share |
As reported |
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$ (1.79) |
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|
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$ (1.06) |
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$ 2.53 |
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Pro forma |
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(1.79) |
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(1.07) |
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2.42 |
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Diluted earnings per share |
As reported |
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$ (1.79) |
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|
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$ (1.06) |
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$ 2.52 |
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Pro forma |
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(1.79) |
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(1.07) |
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2.41 |
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The weighted average fair values of options granted in fiscal years 2001,
2000, and 1999 were estimated at $3.88, $3.05, and $7.82 per share, respectively,
using the Black-Scholes option-pricing model based on the following assumptions:
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2001 |
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Risk-free interest rate |
4.2% |
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Dividend yield |
4.6% |
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Expected life |
5 years |
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Expected volatility |
30.3% |
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| 2000 |
1999 |
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| 5.8% |
5.5% |
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| 4.6% |
2.8% |
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| 5 years |
5 years |
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| 30.9% |
29.5% |
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The stock option activity is summarized as follows:
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2001 |
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2000 |
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1999 |
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SHARES |
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Weighted
Average
Exercise
Price |
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Shares |
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Weighted
Average
Exercise
Price |
|
Shares |
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Weighted
Average
Exercise
Price |
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Outstanding,
beginning of year |
2,137,092 |
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$23.070 |
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|
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1,564,890 |
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$30.424 |
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1,757,340 |
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$30.385 |
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Granted |
436,000 |
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18.950 |
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912,870 |
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13.157 |
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18,000 |
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29.049 |
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Exercised |
(8,000) |
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15.438 |
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--- |
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--- |
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(40,950) |
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20.125 |
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Canceled |
(322,856) |
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26.571 |
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(340,668) |
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29.862 |
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(169,500) |
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32.363 |
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Outstanding, end of year |
2,242,236 |
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21.722 |
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2,137,092 |
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23.070 |
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1,564,890 |
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30,424 |
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Following is a summary of the status of stock options outstanding at
December 30, 2001:
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NUMBER
OUTSTANDING |
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NUMBER
EXERCISABLE |
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EXERCISE
PRICE |
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REMAINING
TERM |
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204,250 |
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204,250 |
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$20.125 |
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4 years |
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105,000 |
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105,000 |
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32.375 |
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5 years |
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110,600 |
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107,400 |
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35.313 |
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6 years |
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400,300 |
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244,400 |
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34.125 |
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7 years |
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149,396 |
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137,467 |
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30.250 |
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7 years |
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5,000 |
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5,000 |
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28.975 |
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8 years |
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150,670 |
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93,174 |
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15.053 |
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9 years |
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706,520 |
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186,125 |
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12.625 |
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9 years |
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48,500 |
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--- |
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16.108 |
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10 years |
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15,000 |
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--- |
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16.117 |
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10 years |
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347,000 |
|
--- |
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19.470 |
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10 years |
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Certain officers of the Company participate
in a restricted stock program. In fiscal years 2001 and 2000, the Company
awarded 38,000 and 168,839 restricted shares of common stock, respectively.
The market value of these shares awarded for fiscal years 2001 and 2000
were $477 and $2,079, respectively. These amounts are recorded as unearned
compensation-restricted stock and are shown as a reduction of shareholders'
equity. Unearned compensation is being amortized to expense over vesting
periods of three, four and five years, and amortization for fiscal years
2001 and 2000 amounted to $685 and $98, respectively. In fiscal 2001 there
were forfeitures of 3,000 restricted shares with a market value of $37.
All restricted stock program participants
are entitled to receive cash dividends and to vote their shares. However,
the sale or transfer of these shares are restricted during the vesting
period. In addition, participants are entitled to future restricted stock
awards in 2002 if certain financial objectives are achieved.
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