STOCK PLANS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements [Abstract]

Stock Plans

15. STOCK PLANS

Share-based compensation

The Company has previously awarded share-based compensation pursuant to plans covering the majority of its Employee groups, including plans adopted via collective bargaining, plans covering the Company's Board of Directors, and plans related to employment contracts with the Chairman Emeritus of the Company. The Company accounts for share-based compensation utilizing fair value.

The Consolidated Statement of Income for the years ended December 31, 2011, 2010, and 2009,reflects share-based compensation expense of $13million, $12 million, and $13million, respectively. The total tax benefit recognized in earnings from share-based compensation arrangements for the years ended December 31, 2011, 2010, and 2009, was not material.As of December 31, 2011, there was $21 million of total unrecognized compensation cost related to share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.2years.

Restricted stock units and stock grants

Under the Company's Amended and Restated 2007 Equity Incentive Plan (“2007 Equity Plan”), it granted restricted stock units (“RSUs”) to Employees and members of its Board of Directors during 2010 and to Employees during 2011.  In addition, during 2011, the Company granted unrestricted stock to members of its Board of Directors.The fair value of RSUsand unrestricted stock grants is based on the closing price of the Company's common stock on the date of grant. Outstanding RSUs vest over three years, subject to the Employee's continued employment or the Board member's continued service. The Company recognizes expense on a straight-line basis over the vesting period. A remaining balance of up to 12 millionshares of the Company's common stock may be issued pursuant to grants under the 2007 Equity Plan. Aggregated information regarding the Company's RSUs and stock grants is summarized below:

		RESTRICTED STOCK UNITS
			Wtd. Average
			Grant Date
		Units (000)	Fair Value
Outstanding December 31, 2009		0	$	0
	Granted	997		12.28
	Vested	0		0
	Surrendered	(7)		12.28
Outstanding December 31, 2010		990		12.28
	Granted	1,007		12.27
	Vested	(327)		12.28
	Surrendered	(30)		12.28
Outstanding December 31, 2011		1,640	$	12.27

Stock options

The Company has previously awarded stock options under plans covering Employees subject to collective bargaining agreements (collective bargaining plans) and plans covering other Employees and members of the Board of Directors(other Employee plans). None of the collective bargaining plans were required to be approved by Shareholders. Options granted to Employees under collective bargaining plans are non-qualified, granted at or above the fair value of the Company's common stock on the date of grant, and generally have terms ranging from six to twelveyears. Neither Executive Officers nor members of the Company's Board of Directors are eligible to participate in any of the collective bargaining plans. Options granted to Employees and members of the Board of Directors members through other Employee plans are both qualified as incentive stock options under the Internal Revenue Code of 1986 and non-qualified stock options, granted at no less than the fair value of the Company's common stock on the date of grant, and have ten-yearterms. All of the options included in other Employee plans have been approved by Shareholders, except one plan covering non-management, non-contract Employees, which had options outstanding to purchase one million shares of the Company's common stock as of December 31, 2011. Although the Company does not have a formal policy, upon option exercise, the Company will typically issue treasury stock, to the extent such shares are available.

Vesting terms for the collective bargaining plans differ based on the grant made, and have ranged in length from immediate vesting to vesting periods in accordance with the period covered by the respective collective bargaining agreement. For other Employee plans, options vest and generally become fully exercisable over three, five, or ten years of continued employment, depending upon the grant type. For grants in any of the Company's plans that are subject to graded vesting over a service period, the Company recognizes expense on a straight-line basis over the requisite service period for the entire award. None of the Company's grants include performance-based or market-based vesting conditions, as defined.

The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including expected stock price volatility. The Company estimates expected stock price volatility via observations of both historical volatility trends as well as implied future volatility observations as determined by independent third parties. No stock options were issued by the Company during 2011.For 2010 and 2009 stock option grants, the Company consistently estimated expected volatility utilizing a ratio of two-thirds implied future volatility and one-third historical volatility as of the grant date. In determining the expected life of the option grants, the Company observed the actual terms of prior grants with similar characteristics and the actual vesting schedule of the grant, and also assessed the expected risk tolerance of different optionee groups. The risk-free interest rates used were actual U.S. Treasury zero-coupon rates for bonds matching the expected term of the option as of the option grant date.

The fair value of each option grant is estimated on the date of grant using a modified Black-Scholes option pricing model. The following table provides the ranges of assumptions and weighted-average assumptions used for grants made under the option plans, as well as the range of fair values and weighted-average fair value of options granted for 2010 and 2009:

	2010			2009
Wtd-average risk-free interest rate		2.9	%		4.9	%
Range of risk-free interest rates		2.73% - 3.04	%		0.93% - 4.97	%
Wtd-average expected life of option (years)		6.0			5.9
Range of expected life of options (years)		6.0 - 6.0			1.0 - 6.0
Wtd-average expected stock volatility		33	%		38	%
Range of expected stock volatilities		33% - 33	%		36% - 38	%
Wtd-average expected dividend yield		.11	%		.20	%
Range of expected dividend yields		.11% - .11	%		.18% - .28	%
Wtd-average stock option fair value		$4.44			$3.03
Range of stock option fair values		$4.40 - $4.46			$1.33 - $3.03

Aggregated information regarding Company issued stock options is summarized below:

		COLLECTIVE BARGAINING PLANS
					Wtd.
			Wtd.		average	Aggregate
			average		remaining	intrinsic
		Options	exercise		contractual	value
		(000)	price		term	(millions)
Outstanding December 31, 2008		55,412	$	13.90
	Granted	81		7.66
	Exercised	(11)		8.25
	Surrendered	(3,044)		16.29
Outstanding December 31, 2009		52,438	$	13.75
	Granted	14		11.98
	Exercised	(2,676)		12.68
	Surrendered	(18,381)		12.88
Outstanding December 31, 2010		31,395	$	14.34
	Granted	-		-
	Exercised	(38)		10.65
	Surrendered	(837)		14.87
Outstanding December 31, 2011		30,520	$	14.33	1.0	$	-
Vested or expected to vest at December 31, 2011		30,520	$	14.33	1.0	$	-
Exercisable at December 31, 2011		30,469	$	14.33	1.0	$	-

		OTHER EMPLOYEE PLANS
					Wtd.
			Wtd.		average	Aggregate
			average		remaining	intrinsic
		Options	exercise		contractual	value
		(000)	price		term	(millions)
Outstanding December 31, 2008		26,489	$	15.57
	Granted	1,824		6.75
	Exercised	(570)		10.36
	Surrendered	(1,999)		14.05
Outstanding December 31, 2009		25,744	$	15.17
	Granted	10		12.04
	Exercised	(673)		9.55
	Surrendered	(5,494)		15.72
Outstanding December 31, 2010		19,587	$	15.22
	Granted	-		-
	Exercised	(143)		6.97
	Surrendered	(2,640)		18.18
Outstanding December 31, 2011		16,804	$	14.82	3.2	$	3
Vested or expected to vest at December 31, 2011		16,655	$	14.81	3.2	$	3
Exercisable at December 31, 2011		14,688	$	15.03	3.1	$	2

The total aggregate intrinsic value of options exercised for all plans during the years ended December 31, 2011, 2010, and 2009, was $1million, $4million, and $1million, respectively. The total grant date fair value of shares vesting during the years ended December 31, 2011, 2010, and 2009, was $13 million, $10million, and $12million, respectively.

Employee Stock Purchase Plan

Under the amended 1991 Employee Stock Purchase Plan (ESPP), which has been approved by Shareholders, the Company is authorized to issue up to a remaining balance of 5 million shares of the Company's common stock to Employees of the Company. These shares may be issued at a price equal to 90 percent of the market value at the end of each monthly purchase period. Common stock purchases are paid for through periodic payroll deductions. For the years ended December 31, 2011, 2010, and 2009, participants under the plan purchased 1.7 million shares, 1.3 million shares, and 2.2 million shares at average prices of $9.73, $11.25, and $6.78, respectively. The weighted-average fair value of each purchase right under the ESPP granted for the years ended December 31, 2011, 2010, and 2009, which is equal to the ten percent discount from the market value of the Common Stock at the end of each monthly purchase period, was $1.03, $1.23, and $.75, respectively.

Taxes

A portion of the Company's granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company's effective tax rate from year to year is subject to variability.