Pier 1 2009 Annual Report Download - page 75

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 8—MATTERS CONCERNING SHAREHOLDERS’ EQUITY (Continued)
A summary of stock option transactions related to the stock option plans during the three fiscal
years ended February 28, 2009 is as follows:
Weighted Exercisable Shares
Weighted Average
Average Fair Value at Number of Weighted Average
Shares Exercise Price Date of Grant Shares Exercise Price
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
Options granted ............. 617,300 7.29 3.42
Options exercised ............ (2,875) 6.79
Options cancelled or expired .... (1,481,975) 14.43
Outstanding at February 28, 2009 . . 11,709,925 13.09 10,385,625 13.72
For shares outstanding at February 28, 2009
Weighted Average
Remaining Shares Weighted Average
Total Weighted Average Contractual Currently Exercise Price-
Ranges of Exercise Prices Shares Exercise Price Life (in years) Exercisable Exercisable Shares
$4.24—$6.69 ........... 1,524,150 $ 6.37 5.76 1,471,650 $ 6.41
$7.42—$11.27 .......... 4,200,900 8.23 5.46 3,062,850 8.48
$11.50—$17.25 ......... 2,712,500 16.20 5.65 2,580,000 16.30
$18.49—$21.00 ......... 3,272,375 19.88 4.10 3,271,125 19.88
As of February 28, 2009, the weighted average remaining contractual term for outstanding and
exercisable options was 5.16 years and 4.78 years, respectively. The aggregate intrinsic value for
outstanding and exercisable options was zero at fiscal 2009 year end. The total intrinsic value of options
exercised for the fiscal years ended 2009, 2008 and 2007 was approximately $2,000, $58,000 and
$372,000, 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.
On February 26, 2006, the Company adopted the provisions of SFAS 123R. SFAS 123R requires all
companies to measure and recognize compensation expense at an amount equal to the fair value of
share-based payments granted under compensation arrangements. Prior to February 26, 2006, the
Company accounted for stock option grants using the intrinsic value method in accordance with
Accounting Principles Board Opinion No. 25, ‘‘Accounting for Stock Issued to Employees,’’ and
recognized no compensation expense for stock option grants since all options granted had an exercise
price equal to the market value of the underlying common stock on the date of grant. The fair value of
the stock options is amortized on a straight-line basis as compensation expense over the vesting periods
of the options. The fair values for options granted during the respective period were estimated as of
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