Safeway 2008 Annual Report Download - page 76

SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note G: Capital Stock
Shares Authorized and Issued Authorized preferred stock consists of 25 million shares, of which none was
outstanding during 2008, 2007 or 2006. Authorized common stock consists of 1.5 billion shares at $0.01 par value per
share. Common stock outstanding at year-end 2008 was 428.9 million shares (net of 161.8 million shares of treasury
stock) and 440.1 million shares at year-end 2007 (net of 149.2 million shares of treasury stock).
Stock Option Plans Under Safeway’s stock option plans, the Company may grant incentive and non-qualified options
to purchase common stock at an exercise price equal to or greater than the fair market value at the grant date, as
determined by the Executive Compensation Committee of the Board of Directors. Options generally vest over five or
seven years. Vested options are exercisable in part or in full at any time prior to the expiration date of six to 15 years from
the date of the grant.
1999 Amended and Restated Equity Participation Plan The 2007 Equity and Incentive Award Plan (the “2007
Plan”), discussed below, succeeds the 1999 Amended and Restated Equity Participation Plan (the “1999 Plan”). Although
the 1999 Plan will remain in full force and effect, there will be no more grants under this plan. Options generally vest over
five or seven years. Vested options are exercisable in part or in full at any time prior to the expiration date of six to
15 years from the date of the grant. Shares issued, as a result of stock option exercises, will be funded with the issuance
of new shares.
2007 Equity and Incentive Award Plan In May 2007, the stockholders of Safeway approved the 2007 Plan. Under
the 2007 Plan, Safeway may grant or issue stock options, stock appreciation rights, restricted stock units, deferred stock,
dividend equivalents, performance awards and stock payments, or any combination thereof. Safeway may grant incentive
and non-qualified options to purchase common stock at an exercise price equal to or greater than the fair market value at
the grant date, as determined by the Executive Compensation Committee of the Safeway Board of Directors. There are
22.4 million shares of common stock authorized for issuance pursuant to grants under the 2007 Plan. As of January 3,
2009, 7.5 million shares have been granted under this plan. Shares issued, as a result of stock option exercises, will be
funded with the issuance of new shares.
Restricted Stock The Company awarded 40,000 shares and 100,000 shares of restricted stock in 2008 and 2007,
respectively, to certain officers and key employees. Restricted stock was not awarded in 2006. These shares vest over a
period of between three to five years and are subject to certain transfer restrictions and forfeiture prior to vesting.
Deferred stock compensation, representing the fair value of the stock at the measurement date of the award, is
amortized to compensation expense over the vesting period. The amortization of restricted stock resulted in
compensation expense of $0.9 million in 2008, $5.2 million in 2007 and $5.0 million in 2006. As of January 3, 2009,
997,753 restricted shares were vested, 110,296 were unvested, 268,399 shares had been returned to Safeway to satisfy
tax-withholding obligations of employees and 22,500 shares have been canceled. There were no cancellations of
restricted stock during 2007 or 2006. The weighted-average intrinsic value at grant date of restricted stock outstanding at
year-end 2008 was $30.12.
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