Stock-Based Associate Compensation Plans

9 Months Ended

Sep. 30, 2011

Stock-Based Associate Compensation Plans

NOTE 9 – Stock-Based Associate Compensation Plans

We currently have four equity compensation plans that permit us to grant various types of equity awards. We currently grant incentive stock options, non-qualified stock options, service-based restricted stock units and performance-based restricted stock units, including some with market-based performance objectives, under our shareholder-approved plans. We also have a Holiday Stock Plan that permits annual awards of one share of common stock to each full-time associate for each full calendar year of service up to a maximum of 10 shares. One of our equity compensation plans permits us to grant stock to our outside directors as a component of their annual compensation. For additional information about our equity compensation plans, see our 2010 Annual Report on Form 10-K, Item 8, Note 17, Stock-Based Associate Compensation Plans, Page 125.

A total of 16.9 million shares are authorized to be granted under the shareholder-approved plans. At September 30, 2011, 4.4 million shares were available for future issuance under the plans.

Stock-Based Awards

During the first quarter of 2011, we granted 24,492 shares of common stock to our directors for 2010 board service fees. Stock-based awards were granted to associates during the first and second quarters of 2011 and are summarized in the tables below. Stock-based compensation cost after tax was $2 million for both the three months ended September 30, 2011 and 2010, and $7 million and $6 million for the nine months ended September 30, 2011 and 2010, respectively.

As of September 30, 2011, $18 million of unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted-average period of 2.0 years.

Here is a summary of option information:

(Shares in thousands)	Shares			Weighted- average exercise price
Outstanding at January 1, 2011		9,690		$	36.59
Granted		891			33.98
Exercised		(24	)		26.87
Forfeited or expired		(1,155	)		33.85
Outstanding at September 30, 2011		9,402			36.71

Here is a summary of restricted stock unit information:

(Shares in thousands)	Service-based nonvested shares			Weighted-average grant-date fair value		Performance-based nonvested shares			Weighted-average grant-date fair value
Nonvested at January 1, 2011		716		$	26.00		149		$	26.08
Granted		298			29.59		51			30.96
Vested		(221	)		34.21		(35	)		32.42
Forfeited or canceled		(15	)		24.62		(8	)		33.21
Nonvested at September 30, 2011		778			25.07		157			25.86