Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Incentive Compensation Plans (Notes)

v2.4.0.8
Stock-Based Incentive Compensation Plans (Notes)
 6 Months Ended
Jun. 28, 2014
Share-based Compensation [Abstract]  
Stock-Based Incentive Compensation Plans
Stock-Based Incentive Compensation Plans
The following table summarizes stock-based compensation expense related to employee stock options, restricted stock 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 28,
2014
 
June 29,
2013
 
June 28,
2014
 
June 29,
2013
 
 
(In millions)
Cost of sales
 
$
1

 
$
1

 
$
2

 
$
3

Research and development
 
11

 
10

 
23

 
23

Marketing, general and administrative
 
9

 
9

 
19

 
18

Stock-based compensation expense, net of tax of $0
 
$
21

 
$
20

 
$
44

 
$
44


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
The weighted average assumptions applied in the lattice-binomial model that the Company uses to estimate the fair value employee stock options are as follows:
 
 
 
Three Months Ended
 
Six Months Ended
 
 
June 28,
2014
 
June 29,
2013
 
June 28,
2014
 
June 29,
2013
Expected volatility
 
51.68
%
 
57.18
%
 
53.36
%
 
59.08
%
Risk-free interest rate
 
1.12
%
 
0.58
%
 
1.09
%
 
0.60
%
Expected dividends
 
0.00
%
 
0.00
%
 
0.00
%
 
0.00
%
Expected life
 
3.86 years

 
3.83 years

 
3.86 years

 
3.83 years


For the quarter ended June 28, 2014, the Company granted 95,000 employee stock options with weighted average grant date fair value per share of $1.66. The Company did not grant any employee stock options during the quarter ended June 29, 2013. For the six months ended June 28, 2014 and June 29, 2013, the Company granted 155,000 and 1,327,000 employee stock options, respectively, with weighted average grant date fair values per share of $1.65 and $1.17, respectively.
Restricted Stock and Restricted Stock Units
For the quarters ended June 28, 2014 and June 29, 2013, the Company granted 1,690,000 and 14,149,000 restricted stock units, respectively, with weighted average grant date fair values per share of $4.00 and $3.91, respectively. For the six months ended June 28, 2014 and June 29, 2013, the Company granted 2,169,000 and 16,596,000 restricted stock units, respectively, with weighted average grant date fair values per share of $3.96 and $3.73, respectively.