Pier 1 2008 Annual Report Download - page 62

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under SFAS 123R for the remaining original fair value of the stock options was not an accurate reflection of
the economic value to the employees holding the options and that the options were not fully achieving their
original objectives of employee retention and satisfaction. The Company also believed that the reduction in the
Company’s stock option compensation expense for fiscal years 2007 and 2008 would enhance comparability
of the Company’s financial statements with those of prior and subsequent years. SFAS 123R was effective for
the Company at the beginning of fiscal 2007.
A summary of stock option transactions related to the stock option plans during the three fiscal years
ended March 1, 2008 is as follows:
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Fair Value
at Date
of Grant
Number of
Shares
Weighted
Average
Exercise Price
Exercisable Shares
Outstanding at February 26, 2005 . ...... 12,273,325 $15.40 5,746,450 $12.76
Options granted ................... 1,477,000 14.26 $4.75
Options exercised ................. (397,100) 7.92
Options cancelled or expired . . . ...... (615,200) 17.36
Outstanding at February 25, 2006 . ...... 12,738,025 15.41 11,438,025 15.54
Options granted ................... 2,745,500 7.24 3.33
Options exercised ................. (98,950) 7.77
Options cancelled or expired . . . ...... (1,716,450) 14.42
Outstanding at March 3, 2007 .......... 13,668,125 13.95 10,797,625 15.31
Options granted ................... 724,000 7.71 3.31
Options exercised ................. (50,775) 7.43
Options cancelled or expired . . . ...... (1,763,875) 14.54
Outstanding at March 1, 2008 .......... 12,577,475 13.53 10,983,225 14.18
For shares outstanding at March 1, 2008
Ranges of Exercise Prices
Total
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (in years)
Shares
Currently
Exercisable
Weighted
Average
Exercise Price-
Exercisable
Shares
$5.81 - $8.50 .................. 4,959,450 $ 7.44 6.40 3,710,700 $ 7.38
$9.31 - $17.25 ................. 3,787,000 15.12 5.88 3,444,000 15.20
$18.49 - $21.00 ................ 3,831,025 19.84 4.98 3,828,525 19.85
As of March 1, 2008, the weighted average remaining contractual term for outstanding and exercisable
options was 5.81 years and 5.43 years, respectively. The aggregate intrinsic value for outstanding and
exercisable options was zero at fiscal 2008 year end. The total intrinsic value of options exercised for the
fiscal years ended 2008, 2007 and 2006 was approximately $58,000, $372,000, and $2,303,000, respectively.
The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds
the exercise price of the option.
60
Pier 1 Imports, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)