SHARE-BASED PLANS

Our shareholders approved the Big Lots 2017 Long-Term Incentive Plan (“2017 LTIP”) in May 2017. The 2017 LTIP authorizes the issuance of incentive and nonqualified stock options, restricted stock, restricted stock units, deferred stock awards, PSUs, stock appreciation rights, cash-based awards, and other share-based awards. We have issued restricted stock units and PSUs under the 2017 LTIP. The number of common shares available for issuance under the 2017 LTIP consists of an initial allocation of 5,500,000 common shares plus any common shares subject to the 1,743,116 outstanding awards as of January 28, 2017 under the Big Lots 2012 Long-Term Incentive Plan (“2012 LTIP”) that, on or after January 28, 2017, cease for any reason to be subject to such awards (other than by reason of exercise or settlement). The Compensation Committee of our Board of Directors (“Committee”), which is charged with administering the 2017 LTIP, has the authority to determine the terms of each award.

Our former equity compensation plan, the 2012 LTIP, approved by our shareholders in May 2012, expired on May 24, 2017. The 2012 LTIP authorized the issuance of incentive and nonqualified stock options, restricted stock, restricted stock units, deferred stock awards, PSUs, stock appreciation rights, cash-based awards, and other share-based awards. We issued nonqualified stock options, restricted stock, restricted stock units, and PSUs under the 2012 LTIP. The Committee, which was charged with administering the 2012 LTIP, had the authority to determine the terms of each award. Nonqualified stock options granted to employees under the 2012 LTIP, the exercise price of which was not less than the fair market value of the underlying common shares on the grant date, generally expire on the earlier of: (1) the seven year term set by the Committee; or (2) one year following termination of employment, death, or disability. The nonqualified stock options generally vest ratably over a four-year period; however, upon a change in control, all awards outstanding automatically vest.

Our other former equity compensation plan, the 2005 LTIP, approved by our shareholders in May 2005, expired on May 16, 2012. The 2005 LTIP authorized the issuance of nonqualified stock options, restricted stock, and other award types. We issued only nonqualified stock options and restricted stock under the 2005 LTIP. The Committee, which was charged with administering the 2005 LTIP, had the authority to determine the terms of each award. Nonqualified stock options granted to employees under the 2005 LTIP, the exercise price of which was not less than the fair market value of the underlying common shares on the grant date, generally expire on the earlier of: (1) the seven year term set by the Committee; or (2) one year following termination of employment, death, or disability. The nonqualified stock options generally vest ratably over a four-year period; however, upon a change in control, all awards outstanding automatically vest.

Share-based compensation expense was $27.8 million, $33.0 million and $13.5 million in 2017, 2016, and 2015, respectively.

Non-vested Restricted Stock

The following table summarizes the non-vested restricted stock awards and restricted stock units activity for fiscal years 2015, 2016, and 2017:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Outstanding non-vested restricted stock at January 31, 2015	744,805		$	38.13
Granted	217,767		49.00
Vested	(128,140	)	38.42
Forfeited	(49,283	)	40.28
Outstanding non-vested restricted stock at January 30, 2016	785,149		$	40.96
Granted	261,792		45.62
Vested	(252,156	)	42.03
Forfeited	(23,264	)	43.63
Outstanding non-vested restricted stock at January 28, 2017	771,521		$	42.12
Granted	205,819		51.16
Vested	(368,408	)	42.84
Forfeited	(19,089	)	44.02
Outstanding non-vested restricted stock at February 3, 2018	589,843		$	44.77

The non-vested restricted stock units granted in 2015, 2016 and 2017 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award, if certain threshold financial performance objectives are achieved and the grantee remains employed by us through the vesting dates.

The non-vested restricted stock awards granted to employees in 2013 have met the applicable threshold financial performance objective and will vest in 2018.

Performance Share Units

In 2013, in connection with his appointment as CEO and President, Mr. Campisi was awarded 37,800 PSUs, which vest based on the achievement of share price performance goals and had a weighted average grant-date fair value per share of $34.68. The PSUs have a contractual term of seven years. In 2014, Mr. Campisi’s first two tranches for a total of 25,200 PSUs vested. In 2016, Mr. Campisi's third and final tranche of 12,600 PSUs vested.

In 2015, 2016, and 2017, we issued PSUs to certain members of management, which vest if certain financial performance objectives are achieved over a three-year performance period and the grantee remains employed by us through that performance period. At February 3, 2018, 855,041 non-vested PSUs were outstanding in the aggregate. The financial performance objectives for each fiscal year within the three-year performance period are approved by the Compensation Committee of our Board of Directors during the first quarter of the respective fiscal year.

As a result of the process used to establish the financial performance objectives, we will only meet the requirements of establishing a grant date for the PSUs when we communicate the financial performance objectives for the third fiscal year of the award to the award recipients, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. If we meet the applicable threshold financial performance objectives over the three-year performance period and the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for the last fiscal year in the performance period.

We have begun or expect to begin recognizing expense related to PSUs as follows:



Issue Year	Outstanding PSUs at February 3, 2018	Actual Grant Date	Expected Valuation (Grant) Date	Actual or Expected Expense Period
2015	249,324	March 2017		Fiscal 2017
2016	337,421		March 2018	Fiscal 2018
2017	268,296		March 2019	Fiscal 2019
Total	855,041

The number of shares to be distributed upon vesting of the PSUs depends on our average performance attained during the three-year performance period as compared to the targets defined by the Compensation Committee, and may result in the distribution of an amount of shares that is greater or less than the number of PSUs granted, as defined in the award agreement. The PSUs issued in 2015 performed above target and more shares will be distributed than initially granted. At February 3, 2018, we estimate the attainment of an average performance that is greater than the targets established for the PSUs issued in 2016. In 2017 and 2016, we recognized $15.4 million and $17.5 million, respectively, in share-based compensation expense related to PSUs.

The following table summarizes the activity related to PSUs for fiscal years 2016 and 2017:



	PSUs, excluding 2013 CEO PSUs
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Outstanding PSUs at January 30, 2016	—		$	—
Granted	379,794		41.04
Vested	—		—
Forfeited	(19,437	)	41.04
Outstanding PSUs at January 28, 2017	360,357		$	41.04
Granted	259,042		51.49
Vested	(360,357	)	41.04
Forfeited	(9,718	)	51.49
Outstanding PSUs at February 3, 2018	249,324		$	51.49

Board of Directors' Awards

In 2016 and 2015, we granted to each non-employee member of our Board of Directors a restricted stock award. In 2017, we granted (1) the chairman of our Board of Directors an annual restricted stock unit award having a grant date fair value of approximately $200,000, and (2) the remaining non-employees elected to our Board of Directors at our 2017 Annual Meeting of Shareholders an annual restricted stock unit award having a grant date fair value of approximately $135,000. These awards vest on the earlier of (1) the trading day immediately preceding the next annual meeting of our shareholders or (2) the death or disability of the grantee. However, the restricted stock units will not vest if the non-employee director ceases to serve on our Board of Directors before either vesting event occurs. Additionally, we allow our non-employee directors to defer all or a portion of their restricted stock unit award and by such election, the non-employee director can defer receipt of the restricted stock units until the earlier of the first to occur; (1) the specified date by the non-employee director in the deferral agreement, (2) the non-employee director’s death or disability, or (3) the date the non-employee director ceases to serve as a member of the Board of Directors.

Stock Options

The following table summarizes information about our stock options outstanding and exercisable at February 3, 2018:



Range of Prices				Options Outstanding				Options Exercisable
Greater Than		Less Than or Equal to		Options Outstanding	Weighted-Average Remaining Life (Years)	Weighted-Average Exercise Price		Options Exercisable	Weighted-Average Exercise Price

$	30.01	$	40.00	163,126	2.1	$	35.58	163,126	$	35.58
$	40.01	$	50.00	117,500	1.1	43.85		117,500	43.85
				280,626	1.7	$	39.04	280,626	$	39.04

A summary of the annual stock option activity for fiscal years 2015, 2016, and 2017 is as follows:



	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000's)
Outstanding stock options at January 31, 2015	1,703,213		$	37.59
Exercised	(450,136	)	36.17
Forfeited	(78,175	)	35.84
Outstanding stock options at January 30, 2016	1,174,902		$	38.26
Exercised	(572,727	)	37.81
Forfeited	(12,500	)	35.83
Outstanding stock options at January 28, 2017	589,675		$	38.75
Exercised	(304,049	)	38.51
Forfeited	(5,000	)	36.93
Outstanding stock options at February 3, 2018	280,626		$	39.04	1.7	$	5,247
Vested or expected to vest at February 3, 2018	280,626		$	39.04	1.7	$	5,247
Exercisable at February 3, 2018	280,626		$	39.04	1.7	$	5,247

The stock options granted in prior years vest in equal amounts on the first four anniversaries of the grant date and have a contractual term of seven years. With the adoption of ASU 2016-09, we have eliminated our annual forfeiture rate assumption.

During 2017, 2016, and 2015, the following activity occurred under our share-based compensation plans:



(In thousands)	2017		2016		2015
Total intrinsic value of stock options exercised	$	4,423	$	7,392	$	5,980
Total fair value of restricted stock vested	$	19,015	$	11,510	$	6,259
Total fair value of performance shares vested	$	21,026	$	621	$	—

The total unearned compensation cost related to all share-based awards outstanding, excluding PSUs issued in 2016 and 2017, at February 3, 2018 was approximately $11.0 million. This compensation cost is expected to be recognized through January 2021 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.7 years from February 3, 2018.