Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation Plans

NOTE 11 – Stock-Based Compensation Plans

We currently have three 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 to associates. 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 2011 Annual Report on Form 10-K, Item 8, Note 17, Stock-Based Associate Compensation Plans, Page 134.

A total of 10.3 million shares are authorized to be granted under the shareholder-approved plans. At March 31, 2012, 1.9 million shares were available for future issuance under the plans.

Stock-Based Awards

During the first quarter of 2012, we granted 24,118 shares of common stock to our directors for 2011 board service fees. Stock-based awards were granted to associates during the first quarter of 2012 and are summarized in the tables below. Stock-based compensation cost after tax was $3 million and $2 million for the three months ended March 31, 2012 and 2011, respectively.

As of March 31, 2012, $31 million of unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted-average period of 2.4 years.

Here is a summary of option information:

(Shares in thousands)	Shares			Weighted- average exercise price
Outstanding at January 1, 2012		9,357		$	36.71
Granted		535			35.63
Exercised		(44	)		27.89
Forfeited or expired		(1,072	)		35.36
Outstanding at March 31, 2012		8,776			36.86

Here is a summary of restricted stock unit information:

(Shares in thousands)	Service-based  shares			Weighted-average grant-date fair value		Performance-based shares			Weighted-average grant-date fair value
Nonvested at January 1, 2012		563		$	26.05		156		$	25.86
Granted		402			31.14		110			34.89
Vested		(2	)		25.58		(53	)		22.88
Forfeited or canceled		(6	)		27.09		0			0.00
Nonvested at March 31, 2012		957			28.18		213			31.26