United Parcel Service, Inc. Annual report pursuant to Section 13 and 15(d)

STOCK-BASED COMPENSATION (Tables)

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2011

Restricted Stock Units Outstanding, Including Reinvested Dividends

As of December 31, 2011, we had the following Restricted Units outstanding, including reinvested dividends:


	Shares (in thousands)			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Nonvested at January 1, 2011		20,029		$	62.46
Vested		(8,329	)		64.68
Granted		3,895			69.53
Reinvested Dividends		631			N/A
Forfeited / Expired		(387	)		62.20

Nonvested at December 31, 2011		15,839		$	62.98		1.62	$	1,159

Restricted Units Expected to Vest		15,226		$	62.90		1.60	$	1,114

Options to Purchase Shares of Class A Common Stock Issued and Outstanding

The following is an analysis of options to purchase shares of class A common stock issued and outstanding:


	Shares (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2011		15,302		$	68.62
Exercised		(2,208	)		59.81
Granted		189			74.25
Forfeited / Expired		(84	)		66.67

Outstanding at December 31, 2011		13,199		$	70.18		3.42	$	57

Options Vested and Expected to Vest		13,117		$	70.18		3.40	$	57

Exercisable at December 31, 2011		10,773		$	70.19		2.84	$	49

Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions

The fair value of each option grant is estimated using the Black-Scholes option pricing model. The weighted average assumptions used, by year, and the calculated weighted average fair values of options, are as follows:


	2011			2010			2009
Expected dividend yield		2.77	%		2.70	%		3.25	%
Risk-free interest rate		2.90	%		3.30	%		3.22	%
Expected life in years		7.5			7.5			7.5
Expected volatility		24.26	%		23.59	%		23.16	%
Weighted average fair value of options granted	$	15.92		$	14.83		$	10.86

Summarized Information about Stock Options Outstanding and Exercisable

The following table summarizes information about stock options outstanding and exercisable at December 31, 2011:


	Options Outstanding						Options Exercisable
Exercise Price Range	Shares (in thousands)		Average Life (in years)		Average Exercise Price		Shares (in thousands)		Average Exercise Price
$50.01 - $60.00		244		7.35	$	55.83		109	$	55.83
$60.01 - $70.00		3,377		1.31		61.78		3,246		61.57
$70.01 - $80.00		7,378		3.98		71.30		5,218		71.34
$80.01 - $90.00		2,200		4.33		80.92		2,200		80.92

		13,199		3.42	$	70.18		10,773	$	70.19

- Definition

Tabular disclosure of option exercise prices, by grouped ranges, including the upper and lower limits of the price range, the number of shares under option, weighted average exercise price and remaining contractual option terms.

+ References + Details