Lowe's 2009 Annual Report Download - page 45

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Transactions related to restricted stock awards issued under the 2006
and 2001 plans for the year ended January 29, 2010 are summarized
as follows:
Weighted-Average
Shares Grant-Date Fair
(In thousands) Value Per Share
Nonvested at January 30, 2009 4,597 $27.40
Granted 4,827 16.03
Vested (583) 31.67
Canceled or forfeited (384) 21.98
Nonvested at January 29, 2010 8,457 $20.86
Deferred Stock Units
Deferred stock units are valued at the market price of a share of the
Company’s common stock on the date of grant. For key employees,
these awards generally vested at the end of a three- to five-year period
from the date of grant and were expensed on a straight-line basis over
that period, which was considered to be the requisite service period.
For non-employee directors, these awards vest immediately and are
expensed on the grant date. Each non-employee Director was awarded
a number of deferred stock units determined by dividing the annual
award amount by the fair market value of a share of the Company’s
common stock on the award date and rounding up to the next 100
units. e annual award amount used to determine the number of
deferred stock units granted to each director was $115,000 in 2009,
2008 and 2007. During 2009, 61,000 deferred stock units were granted
under the 2006 plan and immediately vested for non-employee
directors. e weighted-average grant-date fair value per share of
deferred stock units granted was $19.01, $24.00 and $32.13 in 2009,
2008 and 2007, respectively. e total fair value of deferred stock units
vested was approximately $1 million, $10 million and $1 million in
2009, 2008 and 2007, respectively. ere were 0.7 million deferred
stock units outstanding under the Directors’ and 2006 plans at
January 29, 2010. ere were no unvested deferred stock units at
January 29, 2010.
Restricted Stock Units
Restricted stock units do not have dividends rights and are valued at
the market price of a share of the Company’s common stock on the
date of grant less the present value of dividends expected during the
requisite service period. In general, these awards vest at the end of a
three year period from the date of grant and are expensed on a straight-
line basis over that period, which is considered to be the requisite service
period. e Company uses historical data to estimate the timing and
amount of forfeitures. e weighted-average grant-date fair value per
share of restricted stock units granted was $15.63 and $22.80 in 2009
and 2008, respectively. No restricted stock units were granted in 2007.
No restricted stock units vested in 2009, 2008 or 2007.
Transactions related to restricted stock units issued under the 2006
plan for the year ended January 29, 2010 are summarized as follows:
Weighted-Average
Shares Grant-Date Fair
(In thousands) Value Per Share
Nonvested at January 30, 2009 37 $22.79
Granted 59 15.63
Canceled or forfeited (4) 19.96
Nonvested at January 29, 2010 92 $18.35
ESPP
e purchase price of the shares under the ESPP equals 85% of the closing
price on the date of purchase. e Company’s share-based payment
expense is equal to 15% of the closing price on the date of purchase. e
ESPP is considered a liability award and is measured at fair value at each
reporting date, and the share-based payment expense is recognized over the
six-month offering period. e Company issued 4,328,305 shares of common
stock pursuant to this plan during the year ended January 29, 2010.
NOTE 9 EMPLOYEE RETIREMENT PLANS
e Company maintains a defined contribution retirement plan for
its eligible employees (the 401(k) Plan). Employees are eligible to
participate in the 401(k) Plan 180 days after their original date of
service. Effective August 2008, eligible employees are automatically
enrolled in the 401(k) Plan at a 1% contribution, unless the employee
elects otherwise. e Company makes contributions to the 401(k) Plan
each payroll period, based upon a matching formula applied to employee
contributions (company match). Depending on the amount that a
Plan participant elects to defer, the company match is a maximum of
4.25%. Plan participants are eligible to receive the company match
after completing 180 days of service. e company match is invested
identically to employee contributions and vests immediately in the
participant accounts.
e Company maintains a Benefit Restoration Plan to supplement
benefits provided under the 401(k) Plan to 401(k) Plan participants
whose benefits are restricted as a result of certain provisions of the
Internal Revenue Code of 1986. is Plan provides for employee salary
deferrals and employer contributions in the form of a company match.
e Company maintains a non-qualified deferred compensation
program called the Lowe’s Cash Deferral Plan. is Plan is designed to
permit certain employees to defer receipt of portions of their compensation,
thereby delaying taxation on the deferral amount and on subsequent
earnings until the balance is distributed. is plan does not provide
for employer contributions.
e Company recognized expense associated with employee
retirement plans of $154 million, $112 million and $91 million in
2009, 2008 and 2007, respectively.