Big Lots 2008 Annual Report Download - page 127

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59
BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
from traded options on our common shares. The dividend yield on our common shares is assumed to be zero since we
have not paid dividends and have no current plans to do so in the future. The risk-free rate is based on U.S. Treasury
security yields at the time of the grant. The expected life is determined from the binomial model, which incorporates
exercise and post-vesting forfeiture assumptions based on analysis of historical data.
The weighted-average fair value of options granted and assumptions used in the option pricing model for each
of the respective periods were as follows:
2008 2007 2006
Weighted-average fair value of options granted. . . . . . . . . . . . . . . . . . . . . . . . $8.74 $11.59 $ 5.56
Risk-free interest rates ........................................... 2.2% 4.4% 4.6%
Expected life (years) ............................................. 4.3 4.4 4.6
Expected volatility .............................................. 48.8% 42.6% 42.4%
Expected annual forfeiture ........................................ 3.0% 3.0% 3.0%
The following table summarizes information about our stock options outstanding and exercisable at January 31, 2009:
Range of Prices Options Outstanding Options Exercisable
Greater
Than
Less
Than or
Equal to
Options
Outstanding
Weighted-
Average
Remaining
Life
(Years)
Weighted-
Average
Exercise
Price
Options
Exercisable
Weighted-
Average
Exercise
Price
$ — $10.00 5,000 2.7 $10.00 5,000 $10.00
10.01 20.00 1,899,068 4.6 13.18 1,251,268 13.43
20.01 30.00 2,033,500 5.7 25.13 257,125 28.51
$30.01 $40.00 23,000 5.2 31.37 5,500 32.28
3,960,568 5.1 $19.42 1,518,893 $16.04
A summary of the annual stock option activity for fiscal years 2006, 2007, and 2008 is as follows:
Options Price(a)
Weighted
Average
Remaining
Contractual
Ter m
(Years)
Aggregate
Intrinsic
Value
(000’s)
Outstanding at January 28, 2006 ..................... 10,690,745 $14.52
Granted ......................................... 1,137,900 13.40
Exercised ........................................ (4,671,936) 12.31
Forfeited ........................................ (511,719) 15.78
Outstanding at February 3, 2007 ..................... 6,644,990 15.78
Granted ......................................... 1,156,000 28.69
Exercised ........................................ (2,742,055) 13.10
Forfeited ........................................ (934,465) 24.52
Outstanding at February 2, 2008 ..................... 4,124,470 19.20
Granted ......................................... 985,000 21.45
Exercised ........................................ (787,712) 13.79
Forfeited ........................................ (361,190) 34.77
Outstanding at January 31, 2009 ..................... 3,960,568 $19.42 5.1 $1,879
Vested and expected to vest at January 31, 2009 ......... 3,753,489 $19.32 5.1 $1,808
Exercisable at January 31, 2009 ...................... 1,518,893 $16.04 4.7 $1,191
(a) Weighted-average per share exercise price.
Note 7 — Share-Based Plans (Continued)