Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation Plans

NOTE 11 – STOCK-BASED COMPENSATION PLANS

Four equity compensation plans currently permit us to grant various types of equity awards. We currently grant incentive stock options, nonqualified 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 17.3 million shares are authorized to be granted under the shareholder-approved plans. At September 30, 2012, 9.3 million shares were available for future issuance under the plans.

Stock-Based Awards

Stock-based awards were granted to associates during 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 September 30, 2012 and 2011, and $8 million and $7 million for the nine months ended September 30, 2012 and 2011, respectively. As of September 30, 2012, $23 million of unrecognized compensation costs related to nonvested 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, 2012		9,357		$	36.71
Granted		536			35.63
Exercised		(400	)		30.82
Forfeited or expired		(1,200	)		35.62
Outstanding at September 30, 2012		8,293			37.09

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		403			31.14		110			34.89
Vested		(5	)		27.41		(53	)		22.88
Forfeited or canceled		(23	)		27.84		(4	)		30.98
Nonvested at September 30, 2012		938			28.18		209			31.26