Safeway 2011 Annual Report Download - page 74

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
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 5.4 million shares were available for grant at December 31, 2011 under this plan.
Shares issued, as a result of the 2007 Plan, may be treasury shares, authorized but unissued shares or shares purchased in
the open market.
2011 Equity and Incentive Award Plan In May 2011, the stockholders of Safeway approved the 2011 Plan. Under
the 2011 Plan, Safeway may grant or issue stock options, stock appreciation rights, restricted stock, restricted stock units,
deferred stock, dividend equivalents, performance awards and stock payments, or any combination thereof to
participants other than Safeway’s Chief Executive Officer. 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. At
December 31, 2011, 19.2 million shares of common stock were available for issuance under this plan. Shares issued, as a
result of the 2011 Plan, may be treasury shares, authorized but unissued shares or shares purchased in the open market.
Restricted Stock The Company awarded 1,470,625 shares, 1,129,780 shares and 450,150 shares of restricted stock in
2011, 2010 and 2009, 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
$10.5 million in 2011, $6.1 million in 2010 and $2.5 million in 2009.
The following table summarizes information about unvested Safeway restricted stock as of December 31, 2011:
Awards
Weighted-
average
grant
date
fair value
Unvested, beginning of year 1,484,248 $ 23.17
Granted 1,470,625 22.34
Vested (306,997) 23.72
Canceled (122,671) 21.69
Unvested, end of year 2,525,205 $ 22.70
At the date of vest, the fair value of restricted stock awards vested during the year was $6.6 million in 2011, $2.5 million
in 2010 and $0.2 million in 2009. At December 31, 2011, there was $38.6 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 1.9 years.
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