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Stock Options and Other Share-Based Compensation
9 Months Ended
Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Options and Other Share-Based Compensation
Stock Options and Other Share-Based Compensation
During the three quarters ended March 31, 2017, we had options or other share-based compensation outstanding under two shareholder-approved stock incentive plans (“SIPs”), the Harris Corporation 2005 Equity Incentive Plan (As Amended and Restated Effective August 27, 2010) and the Harris Corporation 2015 Equity Incentive Plan (the “2015 EIP”). Grants of share-based awards after October 23, 2015 were made under our 2015 EIP. We believe that share-based awards more closely align the interests of participants with those of shareholders. Certain share-based awards provide for accelerated vesting if there is a change in control (as defined under our SIPs). The compensation cost related to our share-based awards that was charged against income was $12 million and $32 million for the quarter and three quarters ended March 31, 2017, respectively. The compensation cost related to our share-based awards that was charged against income was $9 million and $27 million for the quarter and three quarters ended April 1, 2016, respectively.
Grants to participants under our 2015 EIP during the quarter ended March 31, 2017 consisted of 2,910 restricted share awards and restricted share unit awards. Grants to participants under our 2015 EIP during the three quarters ended March 31, 2017 consisted of 1,230,480 stock options, 84,770 restricted share awards and restricted share unit awards, and 261,275 performance unit awards. The fair value as of the grant date of each stock option award was determined using the Black-Scholes-Merton option-pricing model, which used the following assumptions: expected dividend yield of 2.36 percent; expected volatility of 21.78 percent; risk-free interest rates averaging 1.23 percent; and expected term in years of 5.03. The fair value as of the grant date of each restricted share award and restricted share unit award was based on the closing price of our common stock on the grant date. The fair value as of the grant date of each performance unit award was determined based on the fair value from a multifactor Monte Carlo valuation model that simulates our stock price and total shareholder return relative to companies in the Standard & Poor’s 500, less a discount to reflect the delay in payments of cash dividend-equivalents that are made only upon vesting.