Big Lots 2010 Annual Report Download - page 132

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7 — Share-Based Plans (Continued)
On the grant date of the 2009 awards, we estimated a three-year period for vesting based on the assumed
achievement of the higher financial performance objective. In the third fiscal quarter of 2009, 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 $0.1 million of incremental expense in the third
fiscal quarter of 2009. In the fourth fiscal quarter of 2009, we changed the estimated achievement date for the
higher financial performance objective from two years to one year due to better operating results than initially
anticipated, and accordingly these awards vested on the trading date following the filing of the 2009 Form 10-K.
As a result of this change, we recorded incremental expense of $3.2 million in the fourth fiscal quarter of 2009
and $1.8 million in the first fiscal quarter of 2010.
On the grant date of the 2010 awards, we estimated a two-year period for vesting based on the assumed
achievement of the higher financial performance objective. Based on projected results, we continue to utilize
our original estimate of a two-year period for vesting.
In 2010, we granted to each of the non-employee members of our Board of Directors restricted stock awards
having a fair value on the grant date of approximately $95,000. In 2009 and 2008, we granted to each of the
non-employee members of our Board of Directors restricted stock awards having a fair value on the grant date
of approximately $75,000. These awards vest on the earlier of 1) the trading day immediately preceding the next
annual meeting of our shareholders; or 2) the death or disability of the grantee. However, the restricted stock
award will not vest if the non-employee director ceases to serve on our Board of Directors before either vesting
event occurs.
During 2010, 2009, and 2008, the following activity occurred under our share-based compensation plans:
2010 2009 2008
(In thousands)
Total intrinsic value of stock options exercised .......................... $ 32,537 $ 5,079 $ 13,510
Total fair value of restricted stock vested ............................... $31,150 $6,954 $ 37
The total unearned compensation cost related to share-based awards outstanding at January 29, 2011, was
approximately $22.1 million. This compensation cost is expected to be recognized through December 2014
based on existing vesting terms with the weighted average remaining expense recognition period being
approximately 1.5 years from January 29, 2011.
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 Pension Plan is designed to pay benefits in the same amount as if the participants
continued to accrue benefits under the Pension Plan. We have no obligation to fund the Supplemental Pension
Plan, and all assets and amounts payable under the Supplemental Pension Plan are subject to the claims of our
general creditors.