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EQUITY
 12 Months Ended
May 01, 2011
Notes to Consolidated Financial Statements [Abstract]  
EQUITY
NOTE 14:    EQUITY 
Share Repurchase Program 
As of May 1, 2011, the board of directors had authorized the repurchase of up to 20,000,000 shares of our common stock. As of May 1, 2011, we had 2,873,430 additional shares remaining under the authorization. See Note 21—Subsequent Events for discussion of share repurchase authorization. 
Preferred Stock 
We have 1,000,000 shares of $1.00 par value preferred stock authorized, none of which are issued. The board of directors is authorized to issue preferred stock in series and to fix, by resolution, the designation, dividend rate, redemption provisions, liquidation rights, sinking fund provisions, conversion rights and voting rights of each series of preferred stock. 
Stock-Based Compensation 
During fiscal 2009, we adopted the 2008 Incentive Compensation Plan (the Incentive Plan), which replaced the 1998 Stock Incentive Plan and provides for the issuance of non-statutory stock options and other awards to employees, non-employee directors and consultants. There are 12,526,397 shares reserved under the Incentive Plan. As of May 1, 2011, there were 10,035,635 shares available for grant under this plan. 
Stock Options
Under the Incentive Plan, we grant options for periods not exceeding 10 years, which either cliff vest five years after the date of grant or vest ratably over a three-year period with an exercise price of not less than 100% of the fair market value of the common stock on the date of grant. Compensation expense for stock options was $3.8 million, $3.5 million and $2.3 million for fiscal 2011, 2010 and 2009, respectively. The related income tax benefit recognized was $1.5 million, $1.4 million and $0.9 million, for fiscal 2011, 2010 and 2009, respectively. There was no compensation expense capitalized as part of inventory or fixed assets during fiscal 2011, 2010 and 2009. 
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The expected annual volatility is based on the historical volatility of our stock and other factors. We use historical data to estimate option exercises and employee termination within the pricing model. The expected term of options granted represents the period of time that options are expected to be outstanding. The following table summarizes the assumptions made in determining the fair value of stock options granted in the fiscal years indicated:
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
Expected annual volatility
 
54
%
 
52
%
 
25
%
Dividend yield
 
—
%
 
—
%
 
—
%
Risk free interest rate
 
1.62
%
 
1.92
%
 
3.96
%
Expected option life (years)
 
4


 
4


 
8


 
The options granted in fiscal 2011 and fiscal 2010 were valued in separate tranches according to the expected life of each tranche. The above table reflects the weighted average risk free interest rate and expected option life of each tranche. The expected annual volatility and dividend yield were the same for all options granted in fiscal 2011 and fiscal 2010. We have never paid a cash dividend on our common stock and have no current plan to pay cash dividends.
The following table summarizes stock option activity under the Incentive Plan as of May 1, 2011, and changes during the year then ended: 
 
 
Number of Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value (in millions)
Outstanding as of May 2, 2010
 
1,995,436


 
23.39


 
 
 
 
Granted
 
726,167


 
15.37


 
 
 
 
Exercised
 
(84,499
)
 
14.64


 
 
 
 
Forfeited
 
(160,498
)
 
21.83


 
 
 
 
Outstanding as of May 1, 2011
 
2,476,606


 
21.44


 
4.8


 
$
11.3


Exercisable as of May 1, 2011
 
884,936


 
22.36


 
2.8


 
$
3.0


The weighted average grant-date fair value of options granted during fiscal 2011, 2010 and 2009 was $6.61, $5.62 and $9.43, respectively. The total intrinsic value of options exercised during fiscal 2011, 2010 and 2009 was $0.4 million, $1.0 million and $0.1 million, respectively. 
As of May 1, 2011, there was $4.0 million of total unrecognized compensation cost related to nonvested stock options granted under the Incentive Plan. That cost is expected to be recognized over a weighted average period of 1.3 years. The total fair value of stock options vested during fiscal 2011, 2010 and 2009 was $1.9 million, $2.4 million and $0.2 million, respectively. 
Performance Share Units 
The Incentive Plan also provides for the issuance of performance share units to reward employees for the achievement of performance goals. Each performance share unit represents and has a value equal to one share of our common stock. Payment of vested performance share units is generally in our common stock.
In June 2010 (fiscal 2011), we granted a total of 370,000 performance share units under the 2008 Incentive Compensation Plan (the Incentive Plan). The performance share units will vest ratably over a two-year service period provided that we achieve a certain earnings target in either fiscal 2011 or fiscal 2012, which we achieved in fiscal 2011. The fair value of the performance share units was determined based on our closing stock price on the date of grant of $17.57. The fair value is being recognized over the expected vesting period of each award.
Also, in June 2010 (fiscal 2011), we granted a number of performance share units to certain employees in our Pork Group. The actual number of performance share units were based on the achievement of certain sales volume growth targets for the Pork segment in fiscal 2011. The sales volume growth targets were not met and no performance share units were granted.
In December 2009 (fiscal 2010), we granted a total of 100,000 performance share units under the Incentive Plan. The performance share units will vest two years from the grant date provided that certain performance goals are met and the employees remain employed through the vesting date. The fair value of these performance share units was also determined based on our closing stock price on the date of grant of $16.68. The fair value of each performance share unit is being recognized as compensation expense over the two-year requisite service period. 
In July 2009 (fiscal 2010), we granted a total of 622,000 performance share units under the Incentive Plan. The performance share units will vest ratably over a three-year service period provided that we achieve a certain earnings target in any of fiscal years 2010, 2011 or 2012, which we achieved in fiscal 2011. The fair value of the performance share units was determined based on our closing stock price on the date of grant of $10.64. The fair value is being recognized over the expected vesting period each award.
In fiscal 2009, we granted a total of 160,000 performance share units. The performance share units have a five-year term and each performance share unit represents and has a value equal to one share of our common stock. The performance share units vest in 20% increments once the volume-weighted average of the closing price of our common stock for 15 consecutive trading days equals or exceeds $26, $32, $38, $44 and $50. In addition to these vesting requirements, a participant must generally be employed by us one year from the date of grant for the performance share units granted to such participant to vest. Payment of the vested performance share units shall be in our common stock. The fair value of the performance share units was estimated on the date of grant using a Monte-Carlo Simulation technique. The weighted average grant-date fair value of the performance share units was $12.13. 
In fiscal 2011, 237,500 performance share units were forfeited. The number of performance share units outstanding as of May 1, 2011 was 1,189,500. As of May 1, 2011, the number of performance share units that had vested was 253,167. Compensation expense related to all outstanding performance share units was $7.5 million, $3.1 million and $1.6 million in fiscal 2011, 2010 and 2009, respectively. The related income tax benefit recognized was $2.9 million, $1.2 million and $0.6 million for fiscal 2011, 2010 and 2009, respectively. As of May 1, 2011, there was approximately $3.5 million of total unrecognized compensation cost related to the performance share units, substantially all of which is expected to be recognized in fiscal 2012. 
Call Spread Transactions 
In connection with the issuance of the Convertible Notes (see Note 9—Debt), we entered into separate convertible note hedge transactions with respect to our common stock to minimize the impact of potential economic dilution upon conversion of the Convertible Notes, and separate warrant transactions. 
We purchased call options in private transactions that permit us to acquire up to approximately 17.6 million shares of our common stock at an initial strike price of $22.68 per share, subject to adjustment, for $88.2 million. In general, the call options allow us to acquire a number of shares of our common stock initially equal to the number of shares of common stock issuable to the holders of the Convertible Notes upon conversion. These call options will terminate upon the maturity of the Convertible Notes. 
We also sold warrants in private transactions for total proceeds of approximately $36.7 million. The warrants permit the purchasers to acquire up to approximately 17.6 million shares of our common stock at an initial exercise price of $30.54 per share, subject to adjustment. The warrants expire on various dates from October 2013 (fiscal 2014) to December 2013 (fiscal 2014). 
The Call Spread Transactions, in effect, increase the initial conversion price of the Convertible Notes from $22.68 per share to $30.54 per share, thus reducing the potential future economic dilution associated with conversion of the notes. The Convertible Notes and the warrants could have a dilutive effect on our earnings per share to the extent that the price of our common stock during a given measurement period exceeds the respective exercise prices of those instruments. The call options are excluded from the calculation of diluted earnings per share as their impact is anti-dilutive.
We have analyzed the Call Spread Transactions and determined that they meet the criteria for classification as equity instruments. As a result, we recorded the purchase of the call options as a reduction to additional paid-in capital and the proceeds of the warrants as an increase to additional paid-in capital. Subsequent changes in fair value of those instruments are not recognized in the financial statements as long as the instruments continue to meet the criteria for equity classification.
Preferred Share Purchase Rights 
On May 30, 2001, the board of directors adopted a Shareholder Rights Plan (the Rights Plan) and declared a dividend of one preferred share purchase right (a Right) on each outstanding share of common stock. Under the terms of the Rights Plan, if a person or group acquired 15% (or other applicable percentage, as provided in the Rights Plan) or more of the outstanding common stock, each Right would have entitled its holder (other than such person or members of such group) to purchase, at the Right’s then current exercise price, a number of shares of common stock having a market value of twice such price. In addition, if we were acquired in a merger or other business transaction after a person or group acquired such percentage of the outstanding common stock, each Right would have entitled its holder (other than such person or members of such group) to purchase, at the Right’s then current exercise price, a number of the acquiring company’s common shares having a market value of twice such price. 
Upon the occurrence of certain events, each Right would have entitled its holder to buy one two-thousandth of a Series A junior participating preferred share (Preferred Share), par value $1.00 per share, at an exercise price of $90.00 subject to adjustment. Each Preferred Share entitles its holder to 2,000 votes and has an aggregate dividend rate of 2,000 times the amount, if any, paid to holders of common stock. The Rights Plan expired on May 31, 2011. The adoption of the Rights Plan had no impact on our financial position or results of operations. 
Stock Held in Trust 
We maintain a Supplemental Pension Plan (the Supplemental Plan) the purpose of which is to provide supplemental retirement income benefits for those eligible employees whose benefits under the tax-qualified plans are subject to statutory limitations. A grantor trust has been established for the purpose of satisfying the obligations under the plan. As of May 1, 2011, the Supplemental Plan held 2,616,687 shares of our common stock at an average cost of $23.75.
As part of the Incentive Plan director fee deferral program, we purchase shares of our common stock on the open market for the benefit of the plan's participants. These shares are held in a rabbi trust until they are transferred to the participants. As of May 1, 2011, the rabbi trust held 236,717 shares of our common stock at an average cost of $19.23.
Accumulated Other Comprehensive Income (Loss) 
The following table summarizes the components of accumulated other comprehensive income (loss) and the related activity during fiscal 2011, 2010 and 2009: 
 
 
Foreign Currency Translation
 
Pension Accounting
 
Hedge Accounting
 
Accumulated Other Comprehensive Income (Loss)
 
 
(in millions)
Balance at April 27, 2008
 
$
132.4


 
$
(61.9
)
 
$
(5.1
)
 
$
65.4


Unrecognized losses
 
(261.0
)
 
(199.2
)
 
(251.6
)
 
(711.8
)
Reclassification into net earnings
 
1.0


 
5.7


 
146.8


 
153.5


Tax effect
 
—


 
71.6


 
32.8


 
104.4


Other comprehensive loss
 
(260.0
)
 
(121.9
)
 
(72.0
)
 
(453.9
)
Balance at May 3, 2009
 
(127.6
)
 
(183.8
)
 
(77.1
)
 
(388.5
)
 
 
 
 
 
 
 
 
 
Unrecognized gains (losses)
 
3.4


 
(179.9
)
 
(26.6
)
 
(203.1
)
Reclassification into net earnings
 
—


 
20.3


 
98.3


 
118.6


Tax effect
 
1.5


 
63.1


 
(19.1
)
 
45.5


Other comprehensive income (loss)
 
4.9


 
(96.5
)
 
52.6


 
(39.0
)
Balance at May 2, 2010
 
(122.7
)
 
(280.3
)
 
(24.5
)
 
(427.5
)
 
 
 
 
 
 
 
 
 
Unrecognized gains
 
120.2


 
60.8


 
144.9


 
325.9


Reclassification into net earnings
 
—


 
38.9


 
(26.6
)
 
12.3


Tax effect
 
2.9


 
(37.1
)
 
(45.7
)
 
(79.9
)
Other comprehensive income
 
123.1


 
62.6


 
72.6


 
258.3


Balance at May 1, 2011
 
$
0.4


 
$
(217.7
)
 
$
48.1


 
$
(169.2
)