Big Lots 2008 Annual Report Download - page 128

60
BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The number of stock options expected to vest was based on our annual forfeiture rate assumption.
A summary of the nonvested restricted stock activity for fiscal years 2006, 2007, and 2008 is as follows:
Number of Shares
Weighted
Average Grant
Date Fair Value
Nonvested restricted stock at January 28, 2006 ....................... 208,002 $11.04
Granted ...................................................... 290,700 12.91
Vested ....................................................... (87,331) 11.00
Forfeited ..................................................... (2,700) 12.80
Nonvested restricted stock at February 3, 2007 ....................... 408,671 12.37
Granted ...................................................... 325,400 28.73
Vested ....................................................... (406,871) 12.34
Forfeited ..................................................... (6,300) 26.45
Nonvested restricted stock at February 2, 2008 ....................... 320,900 28.72
Granted ...................................................... 408,000 21.84
Vested ....................................................... (1,800) 26.43
Forfeited ..................................................... (10,825) 28.76
Nonvested restricted stock at January 31, 2009 ....................... 716,275 $24.81
The nonvested restricted stock awards granted to employees in 2008 and 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 of the
2007 awards, we estimated a three-year period for vesting 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 $1.6 million
and $1.1 million of incremental expense in 2008 and 2007, respectively. We achieved the higher financial
performance objective for the 2007 awards based on the 2008 results, and accordingly these awards will vest
on the first trading date following the filing of this report. On the grant date of the 2008 awards, we estimated a
three-year period for vesting based on the assumed achievement of the higher financial performance objective.
In the second quarter of 2008, we changed the estimated achievement date for the higher financial performance
objective from three years to two years due to better operating results than initially anticipated, resulting
in $0.8 million of incremental expense in 2008. In the fourth quarter of 2008, we changed the estimated
achievement date for the higher financial performance objective from two years to three years due to our
declining net sales results which were in part due to the general economic conditions in the United States.
In 2008, we granted restricted stock awards having a fair value on the grant date of approximately $75,000 to
each of the non-employee members of our Board of Directors. These awards vest on the earlier of 1) the trading
day immediately preceding the next annual meeting of our shareholders; 2) the death of the grantee; or 3) the
disability of the grantee; provided, however, the director’s restricted stock award will be forfeited if he or she
ceases to serve on our Board of Directors before the first of such vesting events occurs.
In 2006, we granted to certain employees nonvested restricted stock with terms similar to the terms of the 2007
and 2008 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.
Note 7 — Share-Based Plans (Continued)