NOTE 5. STOCK-BASED COMPENSATION (Entergy Corporation)

Entergy grants stock awards, which are described more fully in Note 12 to the financial statements in the Form 10-K. Awards under Entergy’s plans generally vest over three years.

Stock Options

Entergy granted 388,200 stock options during the first quarter 2011 with a weighted-average fair value of $11.48. At June 30, 2011, there were 11,140,268 stock options outstanding with a weighted-average exercise price of $73.63. The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the difference in the weighted average exercise price of the stock options granted and Entergy Corporation’s common stock price as of June 30, 2011. Because Entergy’s stock price at June 30, 2011 is less than the weighted average exercise price, the aggregate intrinsic value of the stock options outstanding as of June 30, 2011 was zero. The intrinsic value of “in the money” stock options is $62.1 million as of June 30, 2011.

The following table includes financial information for stock options for the second quarter and six months ended June 30 for each of the years presented:


	2011		2010
	(In Millions)
Compensation expense included in Entergy’s net income for the second quarter	$	2.5	$	3.7
Tax benefit recognized in Entergy’s net income for the second quarter	$	1.0	$	1.4

Compensation expense included in Entergy’s net income for the six months ended June 30,	$	5.5	$	7.6
Tax benefit recognized in Entergy’s net income for the six months ended June 30,	$	2.1	$	2.9
Compensation cost capitalized as part of fixed assets and inventory as of June 30,	$	1.0	$	1.4

Restricted Stock Awards

In January 2011, the Board approved and Entergy granted 166,800 restricted stock awards under the 2007 Equity Ownership and Long-term Cash Incentive Plan. The grants were made effective as of January 27, 2011 and were valued at $72.79 per share, which was the closing price of Entergy’s common stock on that date. One-third of the restricted stock awards will vest upon each anniversary of the grant date and are expensed ratably over the three year vesting period. Shares of restricted stock have the same dividend and voting rights as other common stock and are considered issued and outstanding shares of Entergy upon vesting.

The following table includes financial information for restricted stock for the second quarter and six months ended June 30 for each of the years presented:


	2011		2010
	(In Millions)
Compensation expense included in Entergy’s net income for the second quarter	$	1.0	$	—
Tax benefit recognized in Entergy’s net income for the second quarter	$	0.4	$	—

Compensation expense included in Entergy’s net income for the six months ended June 30,	$	2.0	$	—
Tax benefit recognized in Entergy’s net income for the six months ended June 30	$	0.8	$	—
Compensation cost capitalized as part of fixed assets and inventory as of June 30,	$	0.3	$	—