Albertsons 2012 Annual Report Download - page 67

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each stock-based award will be determined by the Board of Directors or the Compensation Committee.
Generally, stock-based awards granted prior to fiscal 2006 have a term of 10 years and effective in fiscal 2006,
stock-based awards granted will not be for a term of more than seven years.
Stock options are granted to key salaried employees and to the Company’s non-employee directors to purchase
common stock at an exercise price not less than 100 percent of the fair market value of the Company’s common
stock on the date of grant. Generally, stock options vest over four years. Restricted stock awards are also awarded
to key salaried employees. The vesting of restricted stock awards granted is determined at the discretion of the
Board of Directors or the Compensation Committee. The restrictions on the restricted stock awards generally
lapse between one and five years from the date of grant and the expense is recognized over the lapsing period.
Performance awards as part of the long-term incentive program are granted to key salaried employees.
The Company reserved 35 shares for grant as part of the 2007 Stock Plan. As of February 25, 2012, there were 21
shares available for grant. Common stock is delivered out of treasury stock upon the exercise of stock-based
awards. The provisions of future stock-based awards may change at the discretion of the Board of Directors or
the Compensation Committee.
LTIP
In April 2011 the Company granted performance awards to employees under the SUPERVALU INC. 2007 Stock
Plan as part of the Company’s LTIP. Payout of the award, if at all, will be based on the highest payout under the
terms of the grant based on the increase in market capitalization over the service period, or the achievement of
financial goals for the three-year period ending February 22, 2014. Awards will be settled equally in cash and the
Company’s stock.
To determine the fair value under the performance grant, the Company uses the Monte Carlo method. The
significant assumptions relating to the valuation of the Company’s LTIP performance awards consisted of the
following:
2012
Dividend yield 4.2 – 4.6 %
Volatility rate 47.0 – 51.6 %
Risk-free interest rate 0.3 – 1.2 %
Expected life 2.2 – 3.1 years
The grant date fair value of the award made during the first quarter of fiscal 2012 was $2.40 per share. The cash
settled portion of the award is classified as a liability and is remeasured at fair value each reporting period. As of
February 25, 2012 the fair value of the cash portion of the award was $0.57 per share. The minimum payout
value of cash and stock is $0 and the aggregate maximum amount the Company could be required to payout is
$177.
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