Saks Fifth Avenue 2008 Annual Report Download - page 89

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
$8,843, and $7,285 for 2008, 2007, and 2006, respectively. During 2008, 2007, and 2006, compensation cost, net
of related tax effects, of $6,511, $2,162, and $2,846, respectively, was recognized in connection with the
Company’s restricted stock grants.
Compensation cost for the restricted stock awards that cliff vest is expensed on a straight line basis over the
requisite service period. Restricted stock with graded vesting features are treated as multiple awards based upon
the vesting date. The Company records compensation cost for these awards on a straight line basis over the
requisite service period for each separately vesting portion of the award.
A summary of restricted stock awards for the year ended January 31, 2009 is presented below:
Shares
Weighted
Average
Grant
Price
Nonvested at February 2, 2008 ................................................... 944 $18.83
Granted ..................................................................... 2,184 12.79
Vested ...................................................................... (129) 15.99
Canceled .................................................................... (280) 15.74
Nonvested at January 31, 2009 ................................................... 2,719 $14.43
The Company granted performance shares under its long-term incentive plan. The fair value of the
performance shares is based on the market value of the Company’s common stock on the date of grant. The
actual number of performance shares earned is based on the level of performance achieved relative to established
operating (non-market condition) goals for the one-year performance period beginning February 3, 2008 and
range from 0% to 150% of the target number of performance shares granted. In addition, once earned,
performance shares are not payable unless the grantee remains employed by the Company for an additional two
years. Compensation cost for the performance shares that cliff vest is expensed on a straight line basis over the
requisite service period. Performance shares with graded vesting features are treated as multiple awards based
upon the vesting date. The Company records compensation cost for these awards on a straight line basis over the
requisite service period for each separately vesting portion of the award.
The Company granted performance shares of 816, 570, and 568 to certain employees in 2008, 2007, and
2006, respectively. The fair value of these shares on the dates of grants was $10,632, $11,282, and $11,026 for
2008, 2007, and 2006, respectively. The performance measure was not met for the 2008 performance shares and
therefore no shares were earned. Accordingly, no compensation cost was recognized for these shares. During
2008, 2007 and 2006, compensation cost recognized for performance shares earned in prior years, net of related
tax effects, was $1,735, $1,605 and $8,279, respectively.
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