Quarterly report pursuant to Section 13 or 15(d)

Employee Equity Incentive Plans

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Employee Equity Incentive Plans
 6 Months Ended
Jun. 27, 2015
Employee Benefits and Share-based Compensation [Abstract]  
Employee Equity Incentive Plans [Text Block]
Note 14: 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.
During May 2015, stockholders approved an extension of the expiration date of the 2006 Equity Incentive Plan to June 2018 and approved an additional 34 million shares for issuance. As of June 27, 2015, 256 million shares of common stock remained available for future grant under the 2006 Equity Incentive Plan through June 2018.
During May 2015, stockholders approved an extension of the expiration date of the 2006 Stock Purchase Plan to August 2021. 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 June 27, 2015, 189 million shares of common stock remained available for issuance under the 2006 Stock Purchase Plan through August 2021.
Share-Based Compensation
Share-based compensation expense was $332 million in the second quarter of 2015 and $700 million in the first six months of 2015 ($303 million in the second quarter of 2014 and $586 million in the first six months of 2014).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Stock Unit Awards
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 shares of 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 (no market-based restricted stock units were granted in the second quarter of 2015). We based the weighted average estimated value 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, for each period as follows:
 
 
Three Months Ended
 
Six Months Ended
 
 
Jun 27,
2015
 
Jun 28,
2014
 
Jun 27,
2015
 
Jun 28,
2014
Estimated values
 
$
30.33

 
$
24.81

 
$
31.76

 
$
24.91

Risk-free interest rate
 
0.6
%
 
0.5
%
 
0.6
%
 
0.5
%
Dividend yield
 
2.9
%
 
3.4
%
 
2.9
%
 
3.4
%
Volatility
 
n/a

 
22
%
 
27
%
 
23
%

Restricted stock unit activity in the first six months of 2015 was as follows: 
 
 
Number of
RSUs
(In Millions)
 
Weighted Average
Grant-Date
Fair Value
December 27, 2014
 
119.4

 
$
23.89

Granted
 
40.5

 
$
31.76

Vested
 
(42.3
)
 
$
23.32

Forfeited
 
(3.9
)
 
$
24.89

June 27, 2015
 
113.7

 
$
26.87


The aggregate fair value of awards that vested in the first six months of 2015 was $1.4 billion, which represents the market value of our common stock on the date that the restricted stock units vested. The grant-date fair value of awards that vested in first six months of 2015 was $986 million. The number of restricted stock units vested includes shares of common stock that we withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. Restricted stock units that are expected to vest are net of estimated future forfeitures.
As of June 27, 2015, 4.8 million of the outstanding restricted stock units were market-based restricted stock units.
Stock Option Awards
Stock option activity in the first six months of 2015 was as follows:
 
 
Number of
Options
(In Millions)
 
Weighted Average
Exercise Price
December 27, 2014
 
77.3

 
$
21.30

Exercised
 
(11.5
)
 
$
20.79

Cancelled and forfeited
 
(0.6
)
 
$
23.44

Expired
 
(0.2
)
 
$
21.72

June 27, 2015
 
65.0

 
$
21.37

Options exercisable as of:
 
 
 
 
December 27, 2014
 
54.7

 
$
20.29

June 27, 2015
 
53.7

 
$
20.81


During the first six months of 2015, the aggregate intrinsic value of stock option exercises was $150 million, which represents the difference between the exercise price and the value of our common stock at the time of exercise. No stock options were granted during the first six months of 2015.
Stock Purchase Plan
Employees purchased 8.1 million shares of common stock in the first six months of 2015 for $234 million (10.7 million shares of common stock in the first six months of 2014 for $212 million) under the 2006 Stock Purchase Plan.