Stein Mart 2010 Annual Report Download - page 39

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-15
A summary of stock option information for the three years ended January 29, 2011 is as follows (in thousands, except per share amounts):
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Outstandin
g
at Februar
y
2, 2008 2,633 $12.75
Granted 1,264 1.33
Cancelled or forfeited
(
629
)
11.27
Outstandin
g
at Januar
y
31, 2009 3,268 8.62
Granted 42 10.88
Exercised
(
104
)
7.29
Cancelled or forfeited
(
122
)
14.49
Outstandin
g
at Januar
y
30, 2010 3,084 8.46
Granted 50 7.44
Exercised
(
912
)
1.41
Cancelled or forfeited
(
237
)
15.34
Outstandin
g
at Januar
y
29, 2011 1,985 $ 9.74 2.9 Years
Exercisable stock options at Januar
y
29, 2011 1,199 $12.44 1.9 Years
The aggregate intrinsic value of outstanding and exercisable stock options, representing the excess of our closing stock price on January
28, 2011 ($7.89 per share) over the exercise price, multiplied by the applicable number of in-the-money options, was $0.2 million. This
amount changes based on the fair market value of our common stock. There were 0.9 million in-the-money options outstanding at January
29, 2011.
As of January 29, 2011, there was $0.6 million of unrecognized compensation cost related to stock options which is expected to be
recognized over a weighted-average period of 1.2 years using the mid-point method. The weighted-average grant-date fair value of options
granted during 2010 was $5.78 per share. The total intrinsic value of stock options exercised was $7.9 million during 2010 and $0.4 million
during 2009. No stock options were exercised during 2008. The total tax benefit realized from the exercise of stock options was $2.6
million, $0.1 million, and $0 during 2010, 2009 and 2008, respectively.
In December 2010, as a result of paying a special cash dividend, all outstanding stock options were modified to decrease the exercise price
in order to maintain the original grant fair value. No incremental stock compensation expense resulted from the modification.
Restricted Stock and Performance Share Awards
We have issued restricted stock and performance share awards to eligible employees and directors through the Omnibus Plan. All
restricted stock awards have restriction periods tied primarily to employment, and all performance share awards have vesting tied to
performance and/or service. Shares awarded under the Omnibus Plan entitle the shareholder to all rights of common stock ownership
except that the shares may not be sold, transferred, pledged, exchanged or otherwise disposed of during the restriction period. Vesting for
most awards is based on the service period and vesting generally occurs between two and seven years following the date of grant.
Unvested shares are forfeited upon termination of employment. The total value of share-based compensation expense for restricted stock
and performance share awards is based on the closing price of our common stock on the date of grant.
We have both short-term and long-term incentive programs. The Management Incentive Plan in effect for 2010 provided for short-term
incentive compensation payable in cash and long-term incentive compensation payable in performance shares. As a result of achieving
certain performance goals for the year ended January 29, 2011, 0.5 million performance shares, which will vest at the end of 2011 and
2012, were earned in February 2011. Cash bonuses will be paid on April 15, 2011.
For 2009, short-term and long-term incentives were combined and amounts earned were paid in performance shares when the
performance goal, which was based on Net Borrowings, was met on January 30, 2010. One-half of the 1.5 million performance shares
earned on the award date (February 1, 2010) vested immediately resulting in 0.7 million shares being issued in February 2010 and the
other half vested in December 2010. For 2008, long-term incentive compensation was payable in performance shares and stock options or
restricted stock. Performance compensation was based on our achieving aggregate EPS goals for a three year rolling period. Due to the
2008 EPS shortfall to goal, no share-based compensation expense was recorded for these performance shares which were cancelled in
2010. Restricted stock that was granted in 2008 vested in December 2010.