NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  February 2, 2011, the Bancorp used these proceeds along with  proceeds from a senior debt offering and other available resources  to repurchase all 136,320 Series F preferred shares. See Note 32  for further information.  proceeds. On January 24, 2011, the underwriters exercised their  option to purchase an additional 12,142,857 shares at the offering  price of $14.00 per share. In connection with this exercise, the  Bancorp entered into a forward sale agreement which resulted in a  final net payment of 959,821 shares on February 4, 2011. On  The Bancorp has historically emphasized employee stock ownership. The following table provides detail of the number of  shares to be issued upon exercise of outstanding stock-based  awards and remaining shares available for future issuance under all  of the Bancorp’s equity compensation plans as of December 31,  2010:  (a) Under the 2008 Incentive Compensation Plan, 33 million shares of stock were authorized for issuance as incentive and nonqualified stock options, SARs, restricted stock and restricted stock  units, performance units and performance restricted stock awards.  (b) The number of shares to be issued upon exercise will be determined at vesting based on the difference between the grant price and the market price at the date of exercise.  (c) Excludes 1.5 million outstanding options awarded under plans assumed by the Bancorp in connection with certain mergers and acquisitions. The Bancorp has not made any awards under these  plans and will make no additional awards under these plans. The weighted-average exercise price of the outstanding options is $18.09 per share. (d) Phantom stock units are settled in cash.  (e) The number of shares to be issued is dependent upon the Bancorp achieving certain predefined performance targets and ranges from zero shares to approximately 400 thousand shares.  (f) Represents remaining shares of Fifth Third common stock under the Bancorp’s 1993 Stock Purchase Plan, as amended and restated, including an additional 1.5 million shares approved by  shareholders on March 28, 2007 and an additional 12 million shares approved by shareholders on April 21, 2009.  Under U.S. GAAP, the Bancorp recognizes compensation  expense for the grant-date fair value of stock-based compensation  issued over its requisite service period. The grant-date fair value of  SARs and stock options is measured using the Black-Scholes  option-pricing model. Awards with a graded vesting are expensed  on a straight-line basis. All of the Bancorp’s stock-based awards are to be settled  with stock with the exception of phantom stock units and a  portion of the performance units that are to be settled in cash.  The Bancorp has historically used treasury stock to settle stock- based awards, when available. SARs, issued at fair value based on  the closing price of the Bancorp’s common stock on the date of  grant, have up to ten-year terms and vest and become exercisable  either ratably or fully over a four year period of continued  employment. The Bancorp does not grant discounted SARs or  stock options, re-price previously granted SARs or stock options,  or grant reload stock options. Restricted stock grants vest either  after four years or ratably after three, four and five years of  continued employment and include dividend and voting rights.  Stock options were previously issued at fair value based on the  closing price of the Bancorp’s common stock on the date of grant,  had up to ten-year terms and vested and became fully exercisable  ratably over a three or four year period of continued employment.  Performance unit awards have three-year cliff vesting terms with  performance or market conditions as defined by the plan.  be paid on settlement of the phantom stock units will be equal to  the total amount of phantom stock units settled at the reported  closing price of the Bancorp’s common stock on the settlement  date. Stock-based awards are eligible for issuance under the Bancorp’s  Incentive Compensation Plan to key employees and directors of  the Bancorp and its subsidiaries. The Incentive Compensation  Plan was approved by shareholders on April 15, 2008, which  authorizes the issuance of up to 33 million shares as equity  compensation and provides for incentive and nonqualified stock  options, stock appreciation rights, restricted stock and restricted  stock units, and performance share and restricted stock awards.  Based on total stock-based awards outstanding (including stock  options, stock appreciation rights, restricted stock and performance units) and shares remaining for future grants under  the 2008 Incentive Compensation Plan, the Bancorp’s total  overhang is seven percent. The overhang measurement represents  the potential dilution to which the Bancorp’s shareholders of  common stock are exposed due to the potential that stock-based  compensation will be awarded to executives, directors or key  employees of the Bancorp. SARs, restricted stock, stock options  and performance units outstanding represent six percent of the  Bancorp’s issued shares at December 31, 2010.  During 2009, the Bancorp’s Board of Directors approved the  use of phantom stock units as part of its compensation for  executives in connection with changes made in reaction to the  TARP compensation rules. The phantom stock units were issued  under the Bancorp’s 2008 Incentive Compensation Plan. The  number of phantom stock units is determined each pay period by  dividing the amount of salary to be paid in phantom stock units  for that pay period, by the reported closing price of the Bancorp’s  common stock on the pay date for such pay period. Phantom  stock is expensed based on the number of outstanding units  multiplied by the closing price of the Bancorp’s stock at period  end. The phantom stock units do not include any rights to receive  dividends or dividend equivalents. Phantom stock units issued on  or before June 12, 2010 will be settled in cash upon the earlier to  occur of June 15, 2011 or the executive’s death. Units issued  thereafter will be settled in cash with 50% being settled on June  15, 2012 and 50% being settled on June 15, 2013. The amount to  112 Fifth Third Bancorp 25. STOCK-BASED COMPENSATION  Plan Category (shares in thousands)  Number of Shares to Be Issued Upon Exercise  Weighted- Average Exercise  Price  Shares Available  for Future  Issuance Equity compensation plans approved by shareholders:  9,601 (a) SARs (b) (b) Restricted stock 5,158  N/A  (a)  Stock options (c) 10,333 $57.02 (a)  Phantom stock units (d)  N/A   N/A  Performance units (e) (a) Performance-based restricted stock  -   N/A  (a)  Employee stock purchase plan  10,434 (f)  Total shares  15,491  20,035