Employee Equity Incentive Plans
|9 Months Ended|
Oct. 01, 2016
|Employee Benefits and Share-based Compensation [Abstract]|
|Employee Equity Incentive Plans [Text Block]||
Note 16: Employee Equity Incentive Plans
Our equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests.
In connection with our completed acquisition of Altera in the first quarter of 2016, we assumed two equity incentive plans with outstanding unvested stock options and RSUs. The assumed stock options and RSUs generally retained the terms and conditions under which they were originally granted. We will not grant additional shares under these assumed plans.
As of October 1, 2016, 217 million shares of common stock remained available for future grant under the 2006 Equity Incentive Plan through June 2018.
The 2006 Stock Purchase Plan allows eligible employees to purchase shares of our common stock at 85% of the value of our common stock on specific dates. Rights to purchase shares of common stock are granted during the first and third quarters of each year. As of October 1, 2016, 165 million shares of common stock remained available for issuance under the 2006 Stock Purchase Plan through August 2021.
Share-based compensation expense recognized was $324 million in the third quarter of 2016 and $1.1 billion in the first nine months of 2016 ($309 million in the third quarter of 2015 and $1.0 billion in the first nine months of 2015).
Restricted Stock Unit Awards
We estimate the fair value of RSU awards with time-based vesting using the value of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our shares of common stock prior to vesting. We estimate the fair value of market-based restricted stock units, referred to in our 2016 Proxy Statement as outperformance restricted stock units (OSUs), using a Monte Carlo simulation model on the date of grant. We based the weighted average estimated value of RSU grants, as well as the weighted average assumptions that we used in calculating the fair value, on estimates at the date of grant, for each period as follows:
Restricted stock unit activity in the first nine months of 2016 was as follows:
The aggregate fair value of awards that vested in the first nine months of 2016 was $1.5 billion, which represents the market value of our common stock on the date that the RSUs vested. The grant-date fair value of awards that vested in first nine months of 2016 was $1.2 billion. The number of RSUs vested includes shares of common stock that we withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. RSUs that are expected to vest are net of estimated future forfeitures.
As of October 1, 2016, 6.7 million of the outstanding RSUs were OSUs. We granted an insignificant number of OSUs in the three months ended October 1, 2016 and 3.5 million in the nine months ended October 1, 2016.
Stock Purchase Plan
Employees purchased 16.5 million shares of common stock in the first nine months of 2016 for $415 million (15.8 million shares of common stock in the first nine months of 2015 for $421 million) under the 2006 Stock Purchase Plan.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef