Albertsons 2015 Annual Report Download - page 80

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The Company expects to resolve $6, net, of unrecognized tax benefits within the next 12 months, representing several
individually insignificant income tax positions. These unrecognized tax benefits represent items in which the Company may not
prevail with certain taxing authorities, based on varying interpretations of the applicable tax law. The Company is currently in
various stages of audits, appeals or other methods of review with authorities from various taxing jurisdictions. The resolution of
these unrecognized tax benefits would occur as a result of potential settlements from these negotiations. Based on the
information available as of February 28, 2015, the Company does not anticipate significant additional changes to its
unrecognized tax benefits.
The Company recognized income related to interest, net of penalties and settlement adjustments, of $7 and $4 in fiscal 2015
and 2014, respectively. No amounts were recognized related to interest and penalties in fiscal 2013. In addition to the liability
for unrecognized tax benefits, the Company had a liability of $26 and $31 as of February 28, 2015 and February 22, 2014,
respectively, related to accrued interest and penalties for uncertain tax positions recorded in Other current liabilities and Long-
term tax liabilities in the Consolidated Balance Sheets. The Company settled various audits during fiscal 2015 and fiscal 2014
resulting in payments of $2 and $14 for interest and penalties in fiscal 2015 and fiscal 2014, respectively.
The Company is currently under examination or other methods of review in several tax jurisdictions and remains subject to
examination until the statute of limitations expires for the respective taxing jurisdiction or an agreement is reached between the
taxing jurisdiction and the Company. As of February 28, 2015, the Company is no longer subject to federal income tax
examinations for fiscal years before 2011 and in most states is no longer subject to state income tax examinations for fiscal
years before 2006.
NOTE 10—STOCK-BASED AWARDS
As of February 28, 2015, the Company has stock options, restricted stock awards and performance awards (collectively
referred to as “stock-based awards”) outstanding under the 2012 Stock Plan and 2007 Stock Plan. The Company’s amended and
restated 2012 Stock Plan (the "2012 Stock Plan"), as approved by stockholders in fiscal 2015, is the only plan under which
stock-based awards may be granted. The 2012 Stock Plan provides that the Board of Directors or the Leadership Development
and Compensation Committee of the Board (the “Compensation Committee”) may determine at the time of grant whether each
stock-based award granted will be a non-qualified or incentive stock-based award under the Internal Revenue Code of 1986, as
amended (the “Internal Revenue Code”). The terms of 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 ten years, stock-based
awards granted from fiscal 2006 to fiscal 2012 generally have a term of seven years, and starting in fiscal 2013 stock-based
awards granted generally have a term of ten years.
Stock options are granted to key salaried employees and have been granted 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. Prior to fiscal 2013, stock options vested over four years and starting in fiscal 2013, stock options vest
over three years. Restricted stock awards are also awarded to key salaried employees. The vesting of restricted stock awards 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.
As of February 28, 2015, there were 21 shares available for future issuance of stock-based awards under the 2012 Stock Plan.
Common stock has been 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.
On March 20, 2013, the Company completed the Tender Offer and issued common stock to Symphony Investors, which the
Company’s Board of Directors deemed to be a change-in-control for purposes of the Company’s outstanding stock-based
awards, immediately accelerating the vesting of certain stock-based awards. The deemed change-in-control in conjunction with
certain other events resulted in the immediate acceleration of certain additional stock-based awards. As a result of this action,
the 2013 and 2012 long-term incentive program awards were immediately accelerated for the vast majority of the outstanding
awards resulting in the recognition of the remaining unamortized stock-based compensation expense. However, as the exercise
price for the vast majority of these awards was greater than the market price of the Company’s common stock at such time, the
cash pay-out to management and employees was insignificant. Outstanding options granted prior to May of fiscal 2010 were
also immediately accelerated as were options and restricted stock awards granted after May of fiscal 2010 for certain
employees meeting qualifying criteria. The Company recognized $9 of accelerated stock-based compensation charges in
Selling and administrative expenses in fiscal 2014 as a result of the deemed change-in-control, comprised of $5 from long-term
incentive programs, $3 from restricted stock awards and $1 from stock options.