Note 12 — Preferred Stock

As of December 31, 2011 and December 25, 2010, there were 3 million shares of convertible preferred stock authorized. The preferred stock was issued for an ESOP established by Quaker and these shares are redeemable for common stock by the ESOP participants. The preferred stock accrues dividends at an annual rate of $5.46 per share. At year-end 2011 and 2010, there were 803,953 preferred shares issued and 206,653 and 227,653 shares outstanding, respectively. The outstanding preferred shares had a fair value of $68 million as of December 31, 2011 and $74 million as of December 25, 2010. Each share is convertible at the option of the holder into 4.9625 shares of common stock. The preferred shares may be called by us upon written notice at $78 per share plus accrued and unpaid dividends. Quaker made the final award to its ESOP plan in June 2001.


	2011				2010				2009
	Shares^(a)		Amount		Shares^(a)		Amount		Shares^(a)		Amount
*Preferred stock*		0.8	$	41		0.8	$	41		0.8	$	41

*Repurchased preferred stock*
Balance, beginning of year		0.6	$	150		0.6	$	145		0.5	$	138
Redemptions		—		7		—		5		0.1		7

Balance, end of year		0.6	$	157		0.6	$	150		0.6	$	145

^(a)	In millions.