Safeway 1999 Annual Report Download - page 35

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33
Additional Stock Plan Information The Company
accounts for its stock-based awards using the intrinsic
value method in accordance with Accounting Principles
Board Opinion No. 25, “Accounting for Stock Issued to
Employees,” and its related interpretations. Accordingly,
no compensation expense has been recognized in the
financial statements for employee stock option awards
granted at fair market value.
Activity in the Company’s stock option plans for the three-year period ended January 1, 2000 was as follows:
Weighted Average
Options Exercise Price
Outstanding, year-end 1996 38,773,156 $ 5.07
1997 Activity:
Granted 3,981,766 26.25
Converted Vons options 7,578,098 7.34
Canceled (962,522) 10.01
Exercised (8,373,270) 5.06
Outstanding, year-end 1997 40,997,228 7.53
1998 Activity:
Granted 4,987,038 40.28
Converted Dominick’s options 922,701 19.70
Canceled (848,482) 14.61
Exercised (6,680,083) 3.90
Outstanding, year-end 1998 39,378,402 12.15
1999 Activity:
Granted 6,455,276 43.17
Converted Randall’s options 1,069,432 15.54
Canceled (1,325,892) 37.81
Exercised (5,070,905) 4.95
Outstanding, year-end 1999 40,506,313 17.44
Exercisable, year-end 1997 25,887,094 4.75
Exercisable, year-end 1998 24,447,905 5.79
Exercisable, year-end 1999 23,775,488 7.84
Weighted average fair value of options granted during the year:
1997 $12.43
1998 17.06
1999 20.83
The following table summarizes stock option information at year-end 1999:
Options Outstanding Options Exercisable
■■■■■■■■■■■■■■■■■■■■■■
Range of Number Weighted-Average Weighted-Average Number Weighted-Average
Exercise Prices of Options Remaining Contractual Life Exercise Price of Options Exercise Price
$ 1.57 to $ 3.22 7,701,712 6.95 years $ 2.91 7,661,712 $ 2.91
3.25 to 6.28 7,122,251 6.46 4.55 6,637,323 4.53
6.31 to 9.44 7,017,977 4.51 7.18 4,988,185 7.14
9.67 to 26.41 7,145,707 7.34 18.28 3,364,247 17.17
26.72 to 41.25 7,266,509 8.67 35.43 998,500 34.75
42.06 to 60.94 4,252,157 9.26 50.09 125,521 46.74
■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■
1.57 to 60.94 40,506,313 7.06 17.44 23,775,488 7.84
■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■
SFAS No. 123, “Accounting for Stock-Based
Compensation,” requires the disclosure of pro forma net
income and earnings per share as if the Company had
adopted the fair value method as of the beginning of fiscal
1995. Under SFAS 123, the fair value of stock-based
awards to employees is calculated through the use of option
pricing models, even though such models were developed to
estimate the fair value of freely tradable, fully transferable
options without vesting restrictions, which significantly