Medtronic 2015 Annual Report Download - page 118

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Medtronic plc
Notes to Consolidated Financial Statements (Continued)
value between consideration paid and continuing expense based on the ratio of service performed through the transaction date
over the total service period of the award. The revised fair value allocated to post-combination services resulted in incremental
expense which is recognized over the remaining service period of the award. The Company recognized $26 million of
incremental expense related to these modifications from the date of the acquisition through the end of fiscal year 2015 and is
included in acquisition-related items. Except for the conversion of share options and restricted stock units discussed herein, the
material terms of these awards remained unchanged.
The following table presents the components and classification of stock-based compensation expense, including the
modification expense related to the Transaction Agreement, for stock options, restricted stock awards, and ESPP shares
recognized for fiscal years 2015, 2014, and 2013:
Fiscal Year
(in millions) 2015 2014 2013
Stock options $ 140 $ 34 $ 44
Restricted stock awards 284 98 96
Employees stock purchase plan 15 13 12
Total stock-based compensation expense $ 439 $ 145 $ 152
Cost of products sold $ 23 $ 14 $ 12
Research and development expense 29 27 31
Selling, general, and administrative expense 128 104 109
Restructuring charges 70 — —
Acquisition-related items 189 — —
Total stock-based compensation expense 439 145 152
Income tax benefits (138) (40) (43)
Total stock-based compensation expense, net of tax $ 301 $ 105 $ 109
Stock Options The following table summarizes all stock option activity, including activity from options assumed or issued as
a result of acquisitions, during fiscal year 2015:
Options (in
thousands)
Wtd. Avg.
Exercise
Price
Wtd. Avg.
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic Value
(dollars in
millions)
Outstanding at April 25, 2014 35,577 $ 44.78
Granted 40,952 57.96
Exercised (13,503) 45.32
Expired/Forfeited (1,005) 50.43
Outstanding at April 24, 2015 62,021 53.27 7.03 $ 1,351
Vested and expected to vest at April 24, 2015 55,649 51.27 6.75 1,314
Exercisable at April 24, 2015 28,272 39.91 4.53 981
The following table summarizes the total cash received from the issuance of new shares upon stock option award exercises, the
total intrinsic value of options exercised and the related tax benefit during fiscal years 2015, 2014, and 2013:
(in millions) 2015 2014 2013
Cash proceeds from options exercised $ 609 $ 1,273 $ 230
Intrinsic value of options exercised 329 249 39
Tax benefit related to options exercised 106 78 12
108