Kohl's 2010 Annual Report Download - page 62

Table of Contents
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
 
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
 

Balance at beginning of year  $92
Increases due to:
Tax positions taken in prior years   5
Tax positions taken in current year  20
Decreases due to:
Tax positions taken in prior years  (8)
Settlements with taxing authorities  (13)
Lapse of applicable statute of limitations  (7)
Balance at end of year  $89
Not included in the unrecognized tax benefits reconciliation above are gross unrecognized accrued interest and penalties of $24 million at January 29,
2011 and $25 million at January 30, 2010. Interest and penalty expense was $7 million for 2010 and $4 million for 2009.
Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $64 million as of January 29, 2011 and $59 million as
of January 30, 2010.
It is reasonably possible that our unrecognized tax positions may change within the next 12 months, primarily as a result of ongoing audits. While it is
possible that one or more of these examinations may be resolved in the next year, it is not anticipated that a significant impact to the unrecognized tax benefit
balance will occur.
 
We currently grant share-based compensation pursuant to the Kohl’s Corporation 2010 Long-Term Compensation Plan, which provides for the granting
of various forms of equity-based awards, including nonvested stock and options to purchase shares of our common stock, to officers, key employees and
directors. As of January 29, 2011, there were 18.5 million shares authorized and 18.2 million shares available for grant under the 2010 Long-Term
Compensation Plan. Options and nonvested stock that are surrendered or terminated without issuance of shares are available for future grants.
Annual grants of stock options and nonvested stock are made in the first quarter of the subsequent fiscal year. Grants to newly-hired and promoted
employees and other discretionary grants are made periodically throughout the remainder of the year. We also have outstanding options which were granted
under previous compensation plans.

The majority of stock options granted to employees prior to 2009 vest in four equal annual installments. Remaining stock options vest in five to seven
equal annual installments. Outside directors’ stock options are typically granted upon a director’s election or re-election to our Board of Directors and vest over
the term to which the director was elected, generally one year. Options granted to employees after 2005 have a term of seven
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