Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Incentive Compensation Plans

v3.5.0.2
Stock-Based Incentive Compensation Plans
 6 Months Ended
Jun. 25, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Incentive Compensation Plans
Stock-Based Incentive Compensation Plans
The following table summarizes stock-based compensation expense related to employee stock options and restricted stock units, which is allocated within the Company’s condensed consolidated statements of operations as follows:
 
Three Months Ended
Six Months Ended
 
June 25,
2016
 
June 27,
2015
 
June 25,
2016
 
June 27,
2015
 
(In millions)
Cost of sales
$
—

 
$
1

 
$
1

 
$
2

Research and development
10

 
10

 
19

 
20

Marketing, general and administrative
8

 
6

 
14

 
12

Stock-based compensation expense, net of tax of $0
$
18

 
$
17

 
$
34

 
$
34


For all periods presented, the Company did not realize any excess tax benefit related to stock-based compensation and therefore did not record any related financing cash flows.
Stock Options
In the first six months of 2016, the Company did not grant any employee stock options to its employees.
The weighted average assumptions applied in the lattice-binomial model that the Company uses to estimate the fair value of employee stock options are as follows:
 
 
Three Months Ended
 
Six Months Ended
 
June 25,
2016
 
June 27,
2015
 
June 25,
2016
 
June 27,
2015
Expected volatility
N/A
 
54.86
%
 
N/A
 
54.43
%
Risk-free interest rate
N/A
 
1.15
%
 
N/A
 
1.21
%
Expected dividends
N/A
 
0.00
%
 
N/A
 
0.00
%
Expected life
N/A
 
3.91 years

 
N/A
 
3.91 years


In the second quarter of 2015, the Company granted 0.5 million shares of employee stock options, with weighted average grant date fair value per share of $1.06. For the six months ended June 27, 2015, the Company granted 0.7 million employee stock options with weighted average grant date fair values per share of $1.12.
Restricted Stock Units
In the second quarters of 2016 and 2015, the Company granted 5.6 million and 4.1 million shares of restricted stock units, respectively, with weighted average grant date fair values per share of $2.97 and $2.46, respectively. For the six months ended June 25, 2016 and June 27, 2015, the Company granted 6.4 million and 9.4 million shares of restricted stock units, respectively, with weighted average grant date fair values per share of $2.86 and $2.50, respectively.