Stock-Based Compensation Plans

12 Months Ended

Aug. 28, 2011

Stock-Based Compensation Plans

Stock-Based Compensation Plans

Note 7—Stock-Based Compensation Plans

Through the first quarter of fiscal 2006, the Company granted stock options under the Amended and Restated 2002 Stock Incentive Plan (Second Restated 2002 Plan) and predecessor plans. Since the fourth quarter of fiscal 2006, the Company has granted RSUs under the Second Restated 2002 Plan. In July 2008 the Third Restated 2002 Plan was amended by the Board of Directors (Fourth Restated 2002 Plan). Under the Fourth Restated 2002 Plan, prospective grants of RSUs are subject, upon certain terminations of employment, to quarterly, as opposed to daily vesting. Previously awarded RSU grants continue to involve daily vesting upon certain terminations of employment. Additionally, employees who attain certain years of service with the Company will receive shares under accelerated vesting provisions on the annual vesting date rather than upon qualified retirement. The first grant impacted by these amendments occurred in the first quarter of fiscal 2009. In the second quarter of fiscal 2010, the Fourth Restated 2002 Plan was amended following shareholder approval and is now referred to as the Fifth Restated 2002 Stock Incentive Plan (Fifth Restated 2002 Plan). The Fifth Restated 2002 Plan authorizes the issuance of an additional 18,000,000 shares (10,285,714 RSUs) of common stock for future grants in addition to grants currently authorized. Each share issued in respect of stock bonuses or stock units is counted as 1.75 shares toward the limit of shares available. The Company issues new shares of common stock upon exercise of stock options and vesting of RSUs.

Summary of Stock Option Activity

The following table summarizes stock option transactions during 2011:

	Number Of Options (in 000's)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value(1)
Outstanding at the end of 2010		13,162		$	39.50
Exercised		(7,245	)		39.03
Outstanding and exercisable at the end of 2011		5,917		$	40.07		2.77	$	220

(1) The difference between the exercise price and market value of common stock at August 28, 2011.

The following is a summary of stock options outstanding at the end of 2011:

	Options Outstanding and Exercisable
Range of Prices	Number of Options (in 000's)		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
$30.41–$37.35		2,446		2.19	$	35.38
$37.44–$42.41		481		0.67		39.05
$43.79–$43.79		2,649		3.59		43.79
$45.99–$46.46		341		3.58		46.19
		5,917		2.77	$	40.07

Options exercisable and the weighted average exercise price at the end of 2010 and 2009:

	2010		2009
Options exercisable (shares in 000's)		13,032		16,588
Weighted average exercise price	$	39.43	$	39.62

The tax benefits realized and intrinsic value related to total stock options exercised during 2011, 2010, and 2009 are provided in the following table:

	2011		2010		2009
Actual tax benefit realized for stock options exercised	$	78	$	34	$	10
Intrinsic value of stock options exercised(1)	$	227	$	98	$	27

(1) The difference between the exercise price and market value of common stock measured at each individual exercise date.

Employee Tax Consequences on Certain Stock Options

In 2010, the Company recorded a non-recurring benefit of $24 to selling, general and administrative expense related to a refund of a previously recorded Canadian employee tax liability.

Summary of Restricted Stock Unit Activity

RSUs granted to employees and to non-employee directors generally vest over five years and three years, respectively; however, the Company provides for accelerated vesting for employees that have attained twenty-five or more years of service with the Company. Recipients are not entitled to vote or receive dividends on unvested shares. At the end of 2011, 8,565,000 shares were available to be granted as RSUs to eligible employees and directors under the Fifth Restated 2002 Plan.

The following awards were outstanding at the end of 2011:

• 9,010,000 shares of time-based RSUs that vest upon continued employment over specified periods of time; and

• 717,000 performance-based RSUs, of which 315,000 will be formally granted to certain executive officers of the Company upon the official certification of the attainment of specified performance targets for 2011. Once formally granted, the restrictions lapse upon continued employment over specified periods of time.

The following table summarizes RSU transactions during 2011:

	Number of Units (in 000's)			Weighted-Average Grant Date Fair Value
Non-vested at the end of 2010		9,253		$	55.22
Granted		3,971			61.27
Vested		(3,322	)		55.55
Forfeited		(175	)		55.90
Non-vested at the end of 2011		9,727		$	57.56

Summary of Stock-Based Compensation

The following table summarizes stock-based compensation expense and the related tax benefits under the Company's plans:

	2011		2010		2009
Restricted stock units	$	206	$	171	$	132
Stock options		1		19		49
Total stock-based compensation expense before income taxes		207		190		181
Less recognized income tax benefit		67		63		60
Total stock-based compensation expense, net of income taxes	$	140	$	127	$	121

The remaining unrecognized compensation cost related to non-vested RSUs at August 28, 2011 was $386 and the weighted-average period of time over which this cost will be recognized is 1.6 years.