Foot Locker 2006 Annual Report Download - page 75

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59
As of February 3, 2007 there was $3.3 million of total unrecognized compensation cost related to nonvested stock
options, which is expected to be recognized over a weighted-average period of 0.86 years.
Restricted Stock
Restricted shares of the Company’s common stock may be awarded to certain officers and key employees of the
Company. For executives outside of the United States the Company issues restricted stock units. Each restricted stock
unit represents the right to receive one share of the Company’s common stock provided that the vesting conditions
are satisfied. In 2005 and 2004, 20,000 and 72,005 restricted stock units were awarded, respectively. Compensation
expense is recognized using the fair market value at the date of grant and is amortized over the vesting period. These
awards fully vest after the passage of time, generally three years. Restricted stock is considered outstanding at the
time of grant, as the holders of restricted stock are entitled to receive dividends and have voting rights.
Restricted shares and units activity for the year-ended February 3, 2007, January 28, 2006 and January 29, 2005
is summarized as follows:
2006 2005 2004
(in thousands)
Outstanding at beginning of the year .................. 1,041 1,177 1,150
Granted ........................................ 157 245 402
Vested ......................................... (600) (205) (345)
Cancelled or forfeited .............................. (61) (176) (30)
Outstanding at end of year .......................... 537 1,041 1,177
Aggregate value (in millions) ........................ $ 13.6 $ 18.0 $ 18.8
Weighted average remaining contractual life ............ 0.93 0.69 1.25
The weighted average grant-date fair value per share was $24.08, $26.55 and $25.34 for 2006, 2005 and 2004,
respectively. The total value of awards for which restrictions lapsed during the year-ended February 3, 2007, January
28, 2006 and January 29, 2005 was $6.7 million, $4.0 million and $3.0 million, respectively. As of February 3, 2007, there
was $4.0 million of total unrecognized compensation cost, related to nonvested restricted stock awards. The Company
recorded compensation expense related to restricted shares, net of forfeitures, of $4.0 million in 2006, $6.1 million in
2005 and $8.0 million in 2004.
23 Legal Proceedings
Legal proceedings pending against the Company or its consolidated subsidiaries consist of ordinary, routine
litigation, including administrative proceedings, incidental to the business of the Company, as well as litigation
incidental to the sale and disposition of businesses that have occurred in past years. Management does not believe
that the outcome of such proceedings would have a material adverse effect on the Company’s consolidated financial
position, liquidity, or results of operations, taken as a whole.
These legal proceedings include commercial, intellectual property, customer, and labor-and-employment-
related claims. Certain of the Company’s subsidiaries are defendants in a number of lawsuits filed in state and federal
courts containing various class action allegations under state wage and hour laws, including allegations concerning
classification of employees as exempt or nonexempt, unpaid overtime, meal and rest breaks, and uniforms.
24 Commitments
In connection with the sale of various businesses and assets, the Company may be obligated for certain lease
commitments transferred to third parties and pursuant to certain normal representations, warranties, or indemnifications
entered into with the purchasers of such businesses or assets. Although the maximum potential amounts for such
obligations cannot be readily determined, management believes that the resolution of such contingencies will not have
a material effect on the Company’s consolidated financial position, liquidity, or results of operations. The Company