Employee Equity Incentive Plans
|6 Months Ended|
Jul. 02, 2011
|Employee Equity Incentive Plans [Abstract]|
|Employee Equity Incentive Plans||
Note 22: 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 McAfee, we assumed their equity incentive plans and issued replacement awards in the first quarter of 2011. The stock options and restricted stock units issued generally retain the terms and conditions of the respective plans under which they were originally granted. We will not grant additional shares under these plans.
In May 2011, stockholders approved an extension of the 2006 Equity Incentive Plan (2006 Plan). Stockholders approved 168 million additional shares for issuance, increasing the total shares of common stock available for issuance as equity awards to employees and non-employee directors to 596 million shares. The approval also extended the expiration date of the 2006 Plan to June 2014. The maximum shares to be awarded as non-vested shares (restricted stock) or non-vested share units (restricted stock units) was increased to 394 million shares. As of July 2, 2011, 309 million shares remained available for future grant under the 2006 Plan.
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 are granted during the first and third quarters of each year. In May 2011, stockholders approved an extension of the 2006 Stock Purchase Plan. Stockholders approved 133 million additional shares for issuance, increasing the total shares of common stock available for issuance to 373 million shares. The approval also extended the expiration date of the 2006 Stock Purchase Plan to August 2016. As of July 2, 2011, 263 million shares were available for issuance under the 2006 Stock Purchase Plan.
We recognized $262 million of share-based compensation in the second quarter of 2011 and $562 million for the first half of 2011 ($232 million in the second quarter of 2010 and $480 million for the first half of 2010).
We estimate the fair value of restricted stock unit 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 common stock prior to vesting. We estimate the fair value of market-based restricted stock units using a Monte Carlo simulation model on the date of grant. We based the weighted average estimated values of restricted stock unit grants, as well as the weighted average assumptions that we used in calculating the fair value, on estimates at the date of grant, as follows:
We use the Black-Scholes option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. We based the weighted average estimated values of employee stock option grants and rights granted under the stock purchase plan, as well as the weighted average assumptions used in calculating these values, on estimates at the date of grant, as follows:
Under the stock purchase plan, rights to purchase shares are only granted during the first and third quarters of each year.
Restricted Stock Unit Awards
Activity with respect to outstanding restricted stock units (RSUs) for the first half of 2011 was as follows:
The aggregate fair value of awards that vested during the first half of 2011 was $653 million, which represents the market value of Intel common stock on the date that the restricted stock units vested. The grant date fair value of awards that vested during the first half of 2011 was $611 million. The number of restricted stock units vested includes shares that we withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. As of July 2, 2011, 4 million of the outstanding restricted stock units were market-based restricted stock units.
Stock Option Awards
Activity with respect to outstanding stock options for the first half of 2011 was as follows:
During the first half of 2011, the aggregate intrinsic value of stock option exercises was $89 million, which represents the difference between the exercise price and the value of Intel common stock at the time of exercise.
Stock Purchase Plan
Employees purchased 10.3 million shares in the first half of 2011 (9.8 million shares in the first half of 2010) for $181 million ($161 million in the first half of 2010) under the 2006 Stock Purchase Plan.
Disclosure of components of a stock option or other award plan under which share-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from share-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from share-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.
Reference 1: http://www.xbrl.org/2003/role/presentationRef