Costco 2011 Annual Report Download - page 73

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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.
Note 8—Retirement Plans
The Company has a 401(k) Retirement Plan that is available to all U.S. employees who have
completed 90 days of employment. For all U.S. employees, with the exception of California union
employees, the plan allows pre-tax deferrals against which the Company matches 50% of the first one
thousand dollars of employee contributions. In addition, the Company provides each eligible participant
an annual discretionary contribution based on salary and years of service.
California union employees participate in a defined benefit plan sponsored by their union. The
Company makes contributions based upon its union agreement. For all the California union
employees, the Company-sponsored 401(k) plan currently allows pre-tax deferrals against which the
Company matches 50% of the first five hundred dollars of employee contributions. In addition, the
Company will provide each eligible participant a contribution based on hours worked and years of
service.
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