Walmart 2009 Annual Report Download - page 47

45Wal-Mart 2009 Annual Report
As of January 31, 2009, there was $148 million of total unrecognized
compensation cost related to stock options granted under the Plan,
which is expected to be recognized over a weighted-average period
of 2.1 years. The total fair value of options vested during the  scal years
ended January 31, 2009, 2008 and 2007, was $107 million, $102 million
and $160 million, respectively.
The weighted-average grant-date fair value of options granted during
the  scal years ended January 31, 2009, 2008 and 2007, was $9.97,
$11.00 and $9.20, respectively. Stock options granted in  scal 2009
were primarily issued under the ASDA Sharesave Plan. The total intrin-
sic value of options exercised during the years ended January 31, 2009,
2008 and 2007, was $173 million, $60 million and $103 million, respec-
tively. During  scal 2009, the Company received $585 million in cash
from the exercise of stock options.
In  scal 2007, the Company began issuing restricted stock rights to
most associates in lieu of stock option awards. Restricted stock rights
are associate rights to Company stock after a speci ed service period.
Grants issued before  scal 2009 typically vest over  ve years with
40% vesting three years from grant date and the remaining 60%
vesting  ve years from grant date. Beginning in  scal 2009, the vesting
schedule was adjusted for new grants to 50% vesting three years from
grant date and the remaining 50% vesting  ve years from grant date.
The fair value of each restricted stock right is determined on the date
of grant using the stock price discounted for the expected dividend
yield through the vesting period. Expected dividend yield over the
vesting period is based on the annual dividend rate at the time of grant.
The weighted average discount for dividend yield used to determine
the fair value of restricted stock rights granted in  scal 2009, 2008,
and 2007 was 6.8%, 8.4% and 6.9%, respectively.
A summary of the Company’s restricted stock rights activity for  scal
2009 presented below represents the maximum number of shares
that could be earned or vested under the Plan:
Weighted-Average
Restricted Stock Rights Shares Grant-Date Fair Value
Restricted Stock Rights
at January 31, 2008 6,641,000 $43.00
Granted 5,129,000 50.41
Vested (10,000) 44.78
Forfeited (606,000) 45.39
Restricted Stock Rights
at January 31, 2009 11,154,000 $46.28
As of January 31, 2009, there was $278 million of total unrecognized
compensation cost related to restricted stock rights granted under
the Plan, which is expected to be recognized over a weighted-aver-
age period of 2.7 years.
Under the Plan, the Company grants various types of awards of
restricted (non-vested) stock to certain associates. These grants
include awards for shares that vest based on the passage of time,
performance criteria, or both. Vesting periods vary. The restricted
stock awards may be settled in stock, or deferred as stock or cash,
based upon the associate’s election. Consequently, these awards are
classi ed as liabilities in the accompanying Consolidated Balance
Sheets unless the associate has elected for the award to be settled
or deferred in stock.
During  scal 2006, the Company began issuing performance share
awards under the Plan that vest based on the passage of time and
achievement of performance criteria. Based on the extent to which
the targets are achieved, vested shares may range from 0% to 150%
of the original award amount. Because the performance shares issued
before January 1, 2008 may be settled in stock or cash, the performance
shares are accounted for as liabilities in the accompanying Consoli-
dated Balance Sheets unless the associate has elected for the award
to be settled or deferred in stock. Performance shares issued in  scal
2009 are settled or deferred in stock; therefore, they are accounted
for as equity in the accompanying Consolidated Balance Sheets.
The fair value of the restricted stock and performance share liabilities
are remeasured each reporting period. The total liability for restricted
stock and performance share awards at January 31, 2009 and January 31,
2008, was $126 million and $125 million, respectively.
A summary of the Company’s non-vested restricted stock and perfor-
mance share award activity for  scal 2009 presented below represents
the maximum number of shares that could be earned or vested under
the Plan:
Non-Vested Restricted Stock Weighted-Average
and Performance Share Awards Shares Grant-Date Fair Value
Restricted Stock and
Performance Share Awards
at January 31, 2008 10,787,000 $47.00
Granted 6,749,000 52.10
Vested (1,815,000) 46.41
Forfeited (2,016,000) 49.11
Restricted Stock and
Performance Share Awards
at January 31, 2009 13,705,000 $49.28
As of January 31, 2009, there was $293 million of total unrecognized
compensation cost related to restricted stock and performance share
awards granted under the Plan, which is expected to be recognized
over a weighted-average period of 3.4 years. The total fair value of
shares vested during the  scal years ended January 31, 2009, 2008
and 2007, was $55 million, $24 million and $38 million, respectively.
8 Legal Proceedings
The Company is involved in a number of legal proceedings. In
accordance with Statement of Financial Accounting Standards No. 5,
“Accounting for Contingencies,” the Company has made accruals
with respect to these matters, where appropriate, which are re ected
in the Company’s Consolidated Financial Statements. The Company
may enter into discussions regarding settlement of these matters,
and may enter into settlement agreements, if it believes settlement
is in the best interest of the Company’s shareholders. The matters, or
groups of related matters, discussed below, if decided adversely to or
settled by the Company, individually or in the aggregate, may result
in liability material to the Company’s  nancial condition or results
of operations.