Stein Mart 2009 Annual Report Download - page 39

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-15
A summary of stock option information for the three years ended January 30, 2010 is as follows (in thousands, except per share amounts):
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
Outstanding at February 3, 2007 3,264 $13.81
Granted 567 12.35
Exercised (284) 12.39
Cancelled or forfeited (914) 15.76
Outstanding at February 2, 2008 2,633 12.75
Granted 1,264 1.33
Cancelled or forfeited (629) 11.27
Outstanding at January 31, 2009 3,268 8.62
Granted 42 10.88
Exercised (104) 7.29
Cancelled or forfeited (122) 14.49
Outstanding at January 30, 2010 3,084 $8.46 4.2 Years
Exercisable stock options at January 30, 2010 1,593 $9.39 3.5 Years
The aggregate intrinsic value of outstanding and exercisable stock options, representing the excess of our closing stock price on January
29, 2010 ($7.90 per share) over the exercise price, multiplied by the applicable number of in-the-money options, was $8.5 million and $0.2
million, respectively, at January 30, 2010. This amount changes based on the fair market value of our common stock. There were 1.4
million in-the-money options outstanding at January 30, 2010.
As of January 30, 2010, there was $1.2 million of unrecognized compensation cost related to stock options which is expected to be
recognized over a weighted-average period of 1.8 years. The weighted-average grant-date fair value of options granted during 2009 was
$6.71 per share. The total intrinsic value of stock options exercised was $0.4 million during 2009 and $0.9 million during 2007. No stock
options were exercised during 2008. Cash received and the total tax benefit derived from the exercise of stock options during 2009 was
$0.8 million and $0.2 million, respectively.
Restricted Stock and Performance Share Awards
We have issued restricted stock and performance share awards to eligible employees and directors through the Omnibus Plan. All
restricted stock awards have restriction periods tied primarily to employment, and all performance share awards have vesting tied to
performance and/or service. Shares awarded under the Omnibus Plan entitle the shareholder to all rights of common stock ownership
except that the shares may not be sold, transferred, pledged, exchanged or otherwise disposed of during the restriction period. Vesting for
most awards is based on the service period and vesting generally occurs between two and seven years following the date of grant.
Unvested shares are forfeited upon termination of employment. The total value of share-based compensation expense for restricted stock
is based on the closing price of our common stock on the date of grant.
We have both short-term and long-term incentive programs. In prior years, short-term incentive bonuses were paid in cash. However, for
2009, short-term and long-term incentives were combined and amounts earned were paid in performance share awards under the
Management Incentive Compensation Plan, as amended in February 2009 (the “Restated Compensation Plan”). The performance goal for
2009, which was based on Net Borrowings at the end of the fiscal year 2009 as defined in the Restated Compensation Plan, was met on
January 30, 2010. One-half of the 1.5 million performance shares earned on the award date (February 1, 2010) vested immediately and
0.7 million shares were issued in February 2010, and the other half will vest one year after the award date (February 1, 2011).
The Management Incentive Compensation Plan in effect for the years 2007 and 2008 (the “Prior Compensation Plan”) provided for long-
term incentive compensation payable in performance shares and stock options or restricted stock. Performance shares are earned based
on our achieving aggregate EPS goals for a three year rolling period. Due to the effect of the 2007 and 2008 EPS shortfall to goal, no
share-based compensation expense has been recorded for the performance-based shares. Stock options granted in 2007 will vest
between three and five years from the date of grant based on service and restricted stock granted in 2008 will vest at the end of the third
year following the date of grant based on service.
During fiscal 2006, 240,000 performance shares (“MP Performance Shares”) were granted to certain key employees in which vesting is