Big Lots 2007 Annual Report Download - page 149

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7 — Share-Based Plans (Continued)
The nonvested restricted stock awards granted in 2007 vest if certain financial performance objectives are
achieved. If we meet a threshold financial performance objective and the grantee remains employed by us, the
restricted stock will vest on the opening of our first trading window five years after the grant date of the award.
If we meet a higher financial performance objective and the grantee remains employed by us, the restricted stock
will vest on the first trading day after we file our Annual Report on Form 10-K with the SEC for the fiscal year in
which the higher objective is met. On the grant date, we estimated a three-year period for vesting of these awards
based on the assumed achievement of the higher financial performance objective. In the second quarter of 2007, we
changed the estimated achievement date from three years to two years as a result of our performance being better
than expected, resulting in $1.1 million of incremental expense in 2007.
In 2006, we granted nonvested restricted stock with terms similar to the terms of the 2007 awards, although
with a different financial performance objective. In 2006, we achieved the higher financial performance
objective for these awards, resulting in approximately $3.7 million of expense recognized for the vesting of
288,000 common shares underlying the restricted stock awards granted in 2006.
The nonvested restricted stock awarded to Steven S. Fishman upon the commencement of his employment
as our Chairman, Chief Executive Officer and President in 2005 vested in one-third increments upon the
attainment of mutually agreed common share price targets. In 2006, the first common share price target was
achieved and one-third of this award vested. During the first quarter of 2007, the second and third common
share price targets of this award were met, resulting in the vesting of the remaining 66,667 common shares
underlying this restricted stock award and related expense of $0.7 million.
The nonvested restricted stock awarded in 2004 to certain of our officers as a retention package upon the
transition of the former Chief Executive Officer and President to a different position vested equally over three
years. The 2004 restricted stock awards were forfeited, in whole or in part, as applicable, if the employee
voluntarily terminated his or her employment or if the employee was terminated for cause. Of the 172,000
shares originally underlying these restricted stock awards, 10,000 were forfeited in 2005 and the remaining
162,000 vested equally in January 2006, 2007 and 2008.
During 2007, 2006, and 2005, the following activity occurred under our share-based compensation plans:
2007 2006 2005
(In thousands)
Total intrinsic value of stock options exercised ............................ $45,987 $30,416 $ 695
Total fair value of restricted stock vested ................................. 11,822 1,970 658
The total unearned compensation cost related to share-based awards outstanding at February 2, 2008, is
approximately $19.3 million. This compensation cost is expected to be recognized through January 2012 based
on existing vesting terms with the weighted average remaining expense recognition period being approximately
2.3 years from February 2, 2008.
Note 8 — Employee Benefit Plans
Pension Benefits
We maintain the Pension Plan and Supplemental Pension Plan covering certain employees whose hire date was
on or before April 1, 1994. Benefits under each plan are based on credited years of service and the employee’s
compensation during the last five years of employment. The Supplemental Pension Plan is maintained for certain
highly compensated executives whose benefits were frozen in the Pension Plan in 1996. The Supplemental