Safeway 2010 Annual Report Download - page 69

SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note I: Capital Stock
Shares Authorized and Issued Authorized preferred stock consists of 25 million shares, of which none were
outstanding during 2010, 2009 or 2008. Authorized common stock consists of 1.5 billion shares at $0.01 par value per
share. Common stock outstanding at year-end 2010 was 368.0 million shares (net of 231.8 million shares of treasury
stock) and 388.3 million shares at year-end 2009 (net of 204.3 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 Under the 1999 Amended and Restated Equity Participation
Plan (the “1999 Plan”), options generally vest over five or seven years. Although the 1999 Plan will remain in full force
and effect, there will be no more grants under this plan. 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. The 2007 Equity and Incentive Award Plan (the “2007 Plan”), discussed
below, succeeds the 1999 Plan.
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. Options to purchase 9.8 million shares were available for grant at January 1, 2011 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 1,129,780 shares, 450,150 shares and 40,000 shares of restricted stock in
2010, 2009 and 2008, respectively, to certain officers and key employees. 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
$6.1 million in 2010, $2.5 million in 2009 and $0.9 million in 2008.
The following table summarizes information about unvested Safeway restricted stock as of January 1, 2011:
Awards
Weighted-
average
grant
date
fair value
Unvested, year-end 2009 540,150 $ 20.57
Granted 1,129,780 24.54
Vested (102,928) 23.95
Canceled (82,754) 23.91
Unvested, year-end 2010 1,484,248 $ 23.17
At the date of vest, the fair value of restricted stock awards vested during the year was $2.5 million in 2010, $0.2 million
in 2009 and $1.3 million in 2008. At January 1, 2011 there was $27.0 million of total unrecognized compensation cost
related to non-vested restricted stock awards. The cost is expected to be recognized over a weighted average period of
2.0 years.
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