Macy's 2009 Annual Report Download - page 93

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
No shares of Common Stock were granted in the form of restricted stock during 2009. During 2008,
144,864 shares of Common Stock were granted in the form of restricted stock at a per share market value of
$24.85, vesting ratably each year over the next three years. During 2007, 82,000 shares of Common Stock were
granted in the form of restricted stock at per share market values of $40.23 to $46.51, fully vesting after either
three or four years. Compensation expense is recorded for all restricted stock grants based on the amortization of
the fair market value at the time of grant of the restricted stock over the period the restrictions lapse. There have
been no grants of stock appreciation rights under the equity plans.
During 2009, 2,886,975 shares of Common Stock were granted in the form of performance-based restricted
stock units, the Founders Awards, at a per share fair value of $3.59. The fair value amount was determined using
a Monte Carlo simulation analysis to estimate the total shareholder return ranking of the Company among a
ten-company executive compensation peer group over the remaining performance period. The expected volatility
of the Company’s common stock at the date of grant was estimated based on a historical average volatility rate
for the approximate three-year performance period. The dividend yield assumption was based on historical and
anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates
consistent with the approximate three-year performance measurement period. For the Founders Awards granted,
the Company recognizes the fair value on a straight-line basis over the three-year performance period of the
performance-based restricted stock units.
As of January 30, 2010, 45.4 million shares of common stock were available for additional grants pursuant
to the Company’s equity plan. Common stock is delivered out of treasury stock upon the exercise of stock
options and grant of restricted stock.
As of January 30, 2010, the Company had $52 million of unrecognized compensation costs related to
nonvested stock options, which is expected to be recognized over a weighted average period of approximately
1.5 years. As of January 30, 2010, the Company had $1 million of unrecognized compensation costs related to
nonvested restricted stock awards, which is expected to be recognized in the fiscal year ending January 29, 2011,
and $7 million of unrecognized compensation costs related to nonvested performance based restricted stock
units, which is expected to be recognized over a weighted average period of approximately 1.5 years.
17. Shareholders’ Equity
The authorized shares of the Company consist of 125 million shares of preferred stock (“Preferred Stock”),
par value of $.01 per share, with no shares issued, and 1,000 million shares of Common Stock, par value of $.01
per share, with 495.0 million shares of Common Stock issued and 420.8 million shares of Common Stock
outstanding at January 30, 2010, and 495.0 million shares of Common Stock issued and 420.1 million shares of
Common Stock outstanding at January 31, 2009 (with shares held in the Company’s treasury being treated as
issued, but not outstanding).
Commencing in January 2000, the Company’s board of directors has from time to time approved
authorizations to purchase, in the aggregate, up to $9,500 million of Common Stock. All authorizations are
cumulative and do not have an expiration date. As of January 30, 2010, $852 million of authorization remained
unused. Although the Company’s share repurchase program is currently suspended and the Company has not
made any purchases of Common Stock since February 1, 2008 and currently does not intend to make any such
purchases in 2010, it may resume purchases of Common Stock under these or possible future authorizations in
the open market, in privately negotiated transactions or otherwise at any time and from time to time without prior
notice.
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