Share-Based Plans

12 Months Ended

Feb. 01, 2020

Share-based Payment Arrangement [Abstract]

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. All remaining stock options under the 2012 LTIP will expire in 2020.

Share-based compensation expense was $13.1 million, $26.3 million and $27.8 million in 2019, 2018, and 2017, respectively.

Non-vested Restricted Stock

The following table summarizes the non-vested restricted stock awards and restricted stock units activity for fiscal years 2017, 2018, and 2019:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
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
Granted	354,457		45.38
Vested	(413,261	)	42.60
Forfeited	(47,857	)	44.49
Outstanding non-vested restricted stock at February 2, 2019	483,182		$	46.50
Granted	440,014		33.54
Vested	(202,101	)	46.26
Forfeited	(72,585	)	39.89
Outstanding non-vested restricted stock at February 1, 2020	648,510		$	38.52

The non-vested restricted stock units granted in 2017, 2018 and 2019 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.

Performance Share Units

In 2017, 2018, and 2019, 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 1, 2020, 712,433 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 Committee 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 1, 2020	Actual Grant Date	Expected Valuation (Grant) Date	Actual or Expected Expense Period
2017	181,922	March 2019		Fiscal 2019
2018	191,983		March 2020	Fiscal 2020
2019	338,528		March 2021	Fiscal 2021
Total	712,433

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 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. At February 1, 2020, we estimate the attainment of an average performance that is substantially less than the average targets established for the PSUs issued in 2017. In 2019, 2018, and 2017, we recognized $1.2 million, $14.9 million and $15.4 million, respectively, in share-based compensation expense related to PSUs.

The following table summarizes the activity related to PSUs for fiscal years 2017, 2018, and 2019:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
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
Granted	337,421		55.67
Vested	(249,324	)	51.49
Forfeited	(55,338	)	46.31
Outstanding PSUs at February 2, 2019	282,083		$	55.67
Granted	217,518		31.89
Vested	(282,083	)	55.67
Forfeited	(35,596	)	31.89
Outstanding PSUs at February 1, 2020	181,922		$	31.89

Board of Directors' Awards

In 2018 and 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-employee directors an annual restricted stock unit award having a grant date fair value of approximately $135,000. In 2019, we granted (1) the chairman of our Board of Directors an annual restricted stock unit award having a grant date fair value of approximately $210,000, and (2) the remaining non-employee directors an annual restricted stock unit award having a grant date fair value of approximately $145,000. These awards vest on the earlier of (1) the trading day immediately preceding the annual meeting of our shareholders following the grant of such awards 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 directors can defer receipt of their restricted stock units until the earlier of the first to occur of: (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

A summary of the annual stock option activity for fiscal years 2017, 2018, and 2019 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 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
Exercised	(43,125	)	43.11
Forfeited	—		—
Outstanding stock options at February 2, 2019	237,501		$	38.30
Exercised	(6,250	)	32.04
Forfeited	(82,500	)	43.06
Outstanding stock options at February 1, 2020	148,751		$	35.93	0.1	$	—
Vested or expected to vest at February 1, 2020	148,751		$	35.93	0.1	$	—
Exercisable at February 1, 2020	148,751		$	35.93	0.1	$	—

The stock options granted in prior years vested in equal amounts on the first four anniversaries of the grant date and have a contractual term of seven years. All outstanding stock options at February 1, 2020 will expire in 2020.

During 2019, 2018, and 2017, the following activity occurred under our share-based compensation plans:



(In thousands)	2019		2018		2017
Total intrinsic value of stock options exercised	$	42	$	228	$	4,423
Total fair value of restricted stock vested	$	6,452	$	19,240	$	19,015
Total fair value of performance shares vested	$	9,849	$	12,792	$	21,026

The total unearned compensation cost related to all share-based awards outstanding, excluding PSUs issued in 2018 and 2019, at February 1, 2020 was approximately $13.2 million. This compensation cost is expected to be recognized through October 2022 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.9 years from February 1, 2020.