Stock-Based Compensation

12 Months Ended

Jan. 30, 2015

Stock-Based Compensation

Stock-Based Compensation:

Plan Summaries.At January 30, 2015, the Company had stock-based compensation awards outstanding under the following plans: the 2006 Equity Incentive Plan, the Management Stock Compensation Plan, the Stock Compensation Plan and the 2006 Employee Stock Purchase Plan ("ESPP"). Leidos issues new shares upon the issuance of stock awards, vesting of stock units or exercise of stock options under these plans.

The 2006 Equity Incentive Plan provides the Company’s and its affiliates’ employees, directors and consultants the opportunity to receive various types of stock-based compensation and cash awards. As of January 30, 2015, the Company has issued stock options, vested stock awards, restricted stock awards including restricted stock units ("vesting stock"), performance-based awards and cash awards under this plan. The 2006 Equity Incentive Plan provides that in the event of the Company’s merger with or into another corporation, a sale of substantially all of its assets or the transfer of more than 50% of Leidos' outstanding shares by tender offer or similar transaction, the successor entity may assume or substitute all outstanding awards. If the successor entity does not assume or substitute all outstanding awards, the vesting of all awards will accelerate and any repurchase rights on awards will terminate. If a successor entity assumes or substitutes all awards and a participant is involuntarily terminated by the successor entity for any reason other than death, disability or cause within 18 months following the change of control, all outstanding awards of the terminated participant will immediately vest and be exercisable for a period of six months following termination. In the event of a change of control, the vesting of all awards held by non-employee directors of the Company will accelerate. Stock awards granted under the plan prior to fiscal 2015 generally vest or become exercisable 20% a year for the first three years and 40% in the fourth year. In fiscal 2015, the Company began granting awards that generally vest or become exercisable 25% a year over four years. As of January 30, 2015, 3.8 million shares of Leidos' stock were reserved for future issuance under the 2006 Equity Incentive Plan.

The Company has a Management Stock Compensation Plan and a Stock Compensation Plan, together referred to as the Stock Compensation Plans. The board of directors may at any time amend or terminate the Stock Compensation Plans. The Stock Compensation Plans provide for awards in share units to eligible employees. Benefits from these plans are payable in shares of Leidos' stock that are held in a trust for the purpose of funding benefit payments to the plans’ participants. The fair value of the awards granted under the Stock Compensation Plans, which are vesting share unit awards, is based on the fair value of the award on the date of grant. Compensation expense is measured at grant date and generally recognized over the vesting period of four years. Awards granted vest 100% after four years following the date of the award. Upon a change in control of the Company (as defined by the Stock Compensation Plans), participant accounts will become fully vested and shares of Leidos stock held in the accounts will be immediately distributed. The Stock Compensation Plans do not provide for a maximum number of shares available for future issuance.

The Company has an ESPP which allows eligible employees to purchase shares of Leidos' stock at a discount of up to 15% of the fair market value on the date of purchase. During the three years ended January 30, 2015, the discount was 5% of the fair market value on the date of purchase thereby resulting in the ESPP being non-compensatory. As of January 30, 2015, 12.5 million shares of Leidos' stock were authorized and reserved for future issuance under the ESPP.

Stock-Based Compensation and Related Tax Benefits Recognized.Stock-based compensation and related tax benefits recognized under all plans were as follows:

	Year Ended
	January 30, 2015		January 31, 2014		January 31, 2013
	(in millions)
Stock-based compensation expense:
Stock options	$	5	$	10	$	9
Vesting stock awards	35		46		44
Vested stock awards	2		—		—
Total stock-based compensation expense recorded in continuing operations	$	42	$	56	$	53
Total stock-based compensation expense recorded in discontinued operations	$	—	$	21	$	31
Tax benefits recognized from stock-based compensation	$	16	$	22	$	21

New SAIC Spin-off Adjustments. As a result of the separation of New SAIC, effective September 27, 2013, all outstanding equity awards related to New SAIC employees were assumed by New SAIC. Also in connection with the separation, adjustments were made to the share amounts and exercise prices of all remaining outstanding Leidos stock options, and the share amounts for vesting stock awards and performance-based stock awards as of the Distribution Date such that the adjustments were generally made to preserve the aggregate intrinsic value at the distribution date pursuant to the terms of the stock based compensation plans under which they were issued. Taking into account the change in the value of the Company’s common stock as a result of the distribution of the New SAIC shares, the conversion ratio applied to all outstanding equity awards at the distribution date was 1.4523. In addition, all outstanding equity awards reflected the Company’s one-for-four reverse stock split.

As a result of the spin-off adjustments, a modification was made on September 27, 2013 to Leidos and New SAIC stock options outstanding as of the distribution date by which additional stock-based compensation expense was recognized, as the fair value of the outstanding options immediately following the spin-off was greater than the fair value immediately prior to the spin-off. An increase of expense related to the modification of $3 million was recorded for awards that were fully vested on the modification date, and an additional $3 million of incremental fair value will be recorded in future periods for unvested awards that will continue to vest, resulting in a total additional stock compensation cost of $6 million with a weighted average modification fair value of $1.02 related to continuing Leidos stock options outstanding.

The spin-off adjustments are reflected in the tables below as well as the one-for-four stock split discussed in Note 1.

Stock Options.Stock options may be granted with exercise prices no less than the fair value of Leidos' common stock on the date of grant and for terms not greater than ten years. Beginning in fiscal year 2012, stock options granted under the 2006 Equity Incentive Plan have a term of seven years and a vesting period of four years, except for stock options granted to the Company’s outside directors, which have a vesting period of one year. Prior to fiscal year 2012, stock options granted under the 2006 Equity Incentive Plan had a term of five years. Stock options were granted with exercise prices equal to fair value on the date of grant.

In March 2013, Leidos' board of directors declared a special cash dividend of $4.00 per share of Leidos common stock and paid an aggregate $342 million on June 28, 2013 to stockholders of record on June 14, 2013. In connection with the special cash dividend, anti-dilutive adjustments were made to all outstanding stock options on the dividend record date to preserve their value following the special cash dividend, as required by the Company's 2006 Equity Incentive Plan. The modifications were made to reduce the exercise prices of the outstanding stock options and to increase the number of shares issuable upon the exercise of each option such that the aggregate difference between the market price and exercise price times the number of shares issuable upon exercise was substantially the same immediately before and after the payment of the special dividend. These adjustments did not result in additional share-based compensation expense, as the fair value of the outstanding options immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. These adjustments are reflected in the “Special Dividend Adjustment” line in the stock option activity table below.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The fair value of the Company’s stock option awards is generally expensed on a straight-line basis over the vesting period of four years, except for stock options granted to the Company’s outside directors, which is recognized over the vesting period of one year or less.

Prior to the Company's separation transaction, the expected term of all awards granted was derived from the Company's historical experience with the exception of awards granted to our outside directors prior to fiscal 2013 which were derived utilizing the “simplified” method presented in SEC Staff Accounting Bulletin Nos. 107 and 110, “Share-Based Payment”. Expected volatility was based on an average of the historical volatility of Leidos' stock and the implied volatility from traded options on Leidos stock. The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the stock option on the date of grant. The Company used historical data to estimate forfeitures.

After the separation transaction, the expected term for all awards granted is derived utilizing the “simplified” method due to the lack of historical experience post separation. Expected volatility is estimated based on a weighted average historical volatility of a group of publicly-traded peer companies for a period consistent with the expected option term. The Company will continue to use peer group volatility information, until historical volatility of the Company is relevant, to measure expected volatility for future option grants. The risk-free rate is derived in same manner as prior to the separation transaction. The Company uses historical data to estimate forfeitures.

The weighted average grant-date fair value and assumptions used to determine fair value of stock options granted for each of the three years ended January 30, 2015 were as follows:

	Year Ended
	January 30, 2015			January 31, 2014 (Grants After Spin)			January 31, 2014 (Grants Before Spin)			January 31, 2013
Weighted average grant-date fair value	$	6.15		$	9.04		$	9.48		$	6.76		**
Expected term (in years)	4.7			4.8			5.0			5.0
Expected volatility	25.1		%	29.5		%	30.0		%	24.5		%
Risk-free interest rate	1.6		%	1.4		%	1.4		%	1.0		%
Dividend yield	2.9		%	2.4		%	2.8		%	3.7		%

** Adjusted for additional awards granted for the $4.00 Special Dividend

Stock option activity for each of the periods presented was as follows:

	Shares of stock under stock options		Weighted average exercise  price		Weighted average remaining contractual term	Aggregate intrinsic value
	(in millions)				(in years)	(in millions)
Outstanding at January 31, 2012	5.2		$	71.60	2.5	$	—
Options granted	1.3		52.79
Options forfeited or expired	(1.6	)	70.17
Options exercised	—		—			—
Outstanding at January 31, 2013	4.9		67.24		3.0	—
Options granted	1.4		54.86
Special dividend adjustments	0.4
Options forfeited or expired	(1.3	)	71.80
Spin-off Adjustment	(1.9	)	57.85
Outstanding at September 27, 2013 (before spin)	3.5		$	59.25	3.9	$	24

Outstanding at September 28, 2013 (after spin)	4.9		**	$	40.20	**	3.9	$	24
Options granted	0.2			45.16
Options forfeited or expired	(0.4	)		39.43
Options exercised	(0.2	)		43.10				1
Outstanding at January 31, 2014	4.5			$	40.32		3.8	$	25
Options granted	0.7			37.25
Options forfeited or expired	(1.5	)		43.90
Options exercised	(0.1	)		34.89				1
Outstanding at January 30, 2015	3.6			$	38.50		4.0	$	14
Exercisable at January 30, 2015	1.5			$	40.90		2.4	$	4
Vested and expected to vest in the future as of January 30, 2015	3.5			$	38.57		3.9	$	13

**Adjustedfor Conversion Ratio of 1.4523

As of January 30, 2015, there was $5 million of unrecognized compensation cost, net of estimated forfeitures, related to stock options, which is expected to be recognized over a weighted-average period of 1.5 years. The tax benefits realized from exercises of stock options for the three years ending January 30, 2015 were immaterial. The fair value of stock exchanged upon exercises of stock options was $1 million for the year ended January 31, 2014.

Vesting Stock Awards.Compensation expense is measured at the grant date fair value and generally recognized over the vesting period of four years, or seven years for certain stock awards granted under the Stock Compensation Plans based upon required service conditions and in some cases performance conditions.

Vesting stock award activity for each of the periods presented was as follows:

	Shares of stock under stock awards		Weighted average grant- date fair value
	(in millions)
Unvested at January 31, 2012	3.0		$	70.00
Awards granted	1.7		52.48
Awards forfeited	(0.4	)	62.84
Awards vested	(1.2	)	71.28
Unvested at January 31, 2013	3.1		60.78
Awards granted	2.1		53.51
Awards forfeited	(0.4	)	58.28
Awards vested	(0.9	)	64.76
Spin-off Adjustment	(1.5	)	57.04
Unvested at September 27, 2013 (before spin)	2.4		$	59.98

Unvested stock awards at September 28, 2013 (after spin)	3.5		**	$	41.54	**
Awards granted	0.4		*	45.41		*
Awards forfeited	(0.2	)		39.75
Unvested stock awards at January 31, 2014	3.7			$	39.58
Awards granted	0.8			37.06
Awards forfeited	(0.5	)		39.05
Awards vested	(1.0	)		41.08
Unvested stock awards at January 30, 2015	3.0			$	38.51

* Includes Modified Performance-Based Awards

** Adjusted for Conversion Ratio of 1.4523

As of January 30, 2015, there was $45 million of unrecognized compensation cost, net of estimated forfeitures, related to vesting stock awards, which is expected to be recognized over a weighted average period of 1.6 years. The fair value of vesting stock awards that vested in fiscal 2015, 2014, and 2013 was $34 million, $49 million, and $66 million, respectively.

Performance-Based Stock Awards.The Company grants performance-based stock awards to certain officers and key employees of the Company under the 2006 Equity Incentive Plan. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. The performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the spin-off with the target shares prorated for the completed period earned. For all of the remaining target shares in the original award, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period and reflected in the vesting stock awards table above.

There were no performance-based stock awards granted in fiscal 2014 and the outstanding awards represent the awards whose performance conditions were completed in the last fiscal quarter prior to the spin-off and continue to vest over the original service period of the award. For the fiscal 2015 awards granted, one-third of the target number of shares of stock granted under the awards will be allocated to each fiscal year over the three-year performance period and the actual number of shares to be issued with respect to each fiscal year will be based upon the achievement of that fiscal year’s performance criteria.

Performance-based stock award activity for each of the periods presented was as follows:

	Expected number of shares of stock to be issued under performance-based stock awards			Weighted average grant- date fair value
	(in millions)
Unvested at January 31, 2013	0.3			$	52.96
Awards canceled	(0.2	)	*	53.11		*
Unvested at January 31, 2014	0.1		**	$	36.65	**
Awards granted	0.1			37.64
Awards vested	(0.1	)		36.69
Unvested at January 30, 2015	0.1			$	37.70

* Includes Modified Performance-Based Stock Awards

**Adjusted for Conversion Ratio of 1.4523

The weighted average grant date fair value for performance-based stock during fiscal 2015 was $36.88 and $52.52 during fiscal 2013. There were no grants for performance-based stock awards during fiscal 2014.

As of January 30, 2015, there was $1.0 million of unrecognized compensation cost, net of estimated forfeitures, related to performance-based stock awards granted under the 2006 Equity Incentive Plan, which is expected to be recognized over a weighted average period of 2.0 years. The fair value of performance-based stock awards that vested in fiscal 2015 and fiscal 2014 was $2.3 million and $1.5 million, respectively. There were no vesting events for performance-based stock awards during fiscal 2013.

Leidos, Inc.

Stock-Based Compensation

Stock-Based Compensation:

Plan Summaries.At January 30, 2015, the Company had stock-based compensation awards outstanding under the following plans: the 2006 Equity Incentive Plan, the Management Stock Compensation Plan, the Stock Compensation Plan and the 2006 Employee Stock Purchase Plan ("ESPP"). Leidos issues new shares upon the issuance of stock awards, vesting of stock units or exercise of stock options under these plans.

The 2006 Equity Incentive Plan provides the Company’s and its affiliates’ employees, directors and consultants the opportunity to receive various types of stock-based compensation and cash awards. As of January 30, 2015, the Company has issued stock options, vested stock awards, restricted stock awards including restricted stock units ("vesting stock"), performance-based awards and cash awards under this plan. The 2006 Equity Incentive Plan provides that in the event of the Company’s merger with or into another corporation, a sale of substantially all of its assets or the transfer of more than 50% of Leidos' outstanding shares by tender offer or similar transaction, the successor entity may assume or substitute all outstanding awards. If the successor entity does not assume or substitute all outstanding awards, the vesting of all awards will accelerate and any repurchase rights on awards will terminate. If a successor entity assumes or substitutes all awards and a participant is involuntarily terminated by the successor entity for any reason other than death, disability or cause within 18 months following the change of control, all outstanding awards of the terminated participant will immediately vest and be exercisable for a period of six months following termination. In the event of a change of control, the vesting of all awards held by non-employee directors of the Company will accelerate. Stock awards granted under the plan prior to fiscal 2015 generally vest or become exercisable 20% a year for the first three years and 40% in the fourth year. In fiscal 2015, the Company began granting awards that generally vest or become exercisable 25% a year over four years. As of January 30, 2015, 3.8 million shares of Leidos' stock were reserved for future issuance under the 2006 Equity Incentive Plan.

The Company has a Management Stock Compensation Plan and a Stock Compensation Plan, together referred to as the Stock Compensation Plans. The board of directors may at any time amend or terminate the Stock Compensation Plans. The Stock Compensation Plans provide for awards in share units to eligible employees. Benefits from these plans are payable in shares of Leidos' stock that are held in a trust for the purpose of funding benefit payments to the plans’ participants. The fair value of the awards granted under the Stock Compensation Plans, which are vesting share unit awards, is based on the fair value of the award on the date of grant. Compensation expense is measured at grant date and generally recognized over the vesting period of four years. Awards granted vest 100% after four years following the date of the award. Upon a change in control of the Company (as defined by the Stock Compensation Plans), participant accounts will become fully vested and shares of Leidos stock held in the accounts will be immediately distributed. The Stock Compensation Plans do not provide for a maximum number of shares available for future issuance.

The Company has an ESPP which allows eligible employees to purchase shares of Leidos' stock at a discount of up to 15% of the fair market value on the date of purchase. During the three years ended January 30, 2015, the discount was 5% of the fair market value on the date of purchase thereby resulting in the ESPP being non-compensatory. As of January 30, 2015, 12.5 million shares of Leidos' stock were authorized and reserved for future issuance under the ESPP.

Stock-Based Compensation and Related Tax Benefits Recognized.Stock-based compensation and related tax benefits recognized under all plans were as follows:

	Year Ended
	January 30, 2015		January 31, 2014		January 31, 2013
	(in millions)
Stock-based compensation expense:
Stock options	$	5	$	10	$	9
Vesting stock awards	35		46		44
Vested stock awards	2		—		—
Total stock-based compensation expense recorded in continuing operations	$	42	$	56	$	53
Total stock-based compensation expense recorded in discontinued operations	$	—	$	21	$	31
Tax benefits recognized from stock-based compensation	$	16	$	22	$	21

New SAIC Spin-off Adjustments. As a result of the separation of New SAIC, effective September 27, 2013, all outstanding equity awards related to New SAIC employees were assumed by New SAIC. Also in connection with the separation, adjustments were made to the share amounts and exercise prices of all remaining outstanding Leidos stock options, and the share amounts for vesting stock awards and performance-based stock awards as of the Distribution Date such that the adjustments were generally made to preserve the aggregate intrinsic value at the distribution date pursuant to the terms of the stock based compensation plans under which they were issued. Taking into account the change in the value of the Company’s common stock as a result of the distribution of the New SAIC shares, the conversion ratio applied to all outstanding equity awards at the distribution date was 1.4523. In addition, all outstanding equity awards reflected the Company’s one-for-four reverse stock split.

As a result of the spin-off adjustments, a modification was made on September 27, 2013 to Leidos and New SAIC stock options outstanding as of the distribution date by which additional stock-based compensation expense was recognized, as the fair value of the outstanding options immediately following the spin-off was greater than the fair value immediately prior to the spin-off. An increase of expense related to the modification of $3 million was recorded for awards that were fully vested on the modification date, and an additional $3 million of incremental fair value will be recorded in future periods for unvested awards that will continue to vest, resulting in a total additional stock compensation cost of $6 million with a weighted average modification fair value of $1.02 related to continuing Leidos stock options outstanding.

The spin-off adjustments are reflected in the tables below as well as the one-for-four stock split discussed in Note 1.

Stock Options.Stock options may be granted with exercise prices no less than the fair value of Leidos' common stock on the date of grant and for terms not greater than ten years. Beginning in fiscal year 2012, stock options granted under the 2006 Equity Incentive Plan have a term of seven years and a vesting period of four years, except for stock options granted to the Company’s outside directors, which have a vesting period of one year. Prior to fiscal year 2012, stock options granted under the 2006 Equity Incentive Plan had a term of five years. Stock options were granted with exercise prices equal to fair value on the date of grant.

In March 2013, Leidos' board of directors declared a special cash dividend of $4.00 per share of Leidos common stock and paid an aggregate $342 million on June 28, 2013 to stockholders of record on June 14, 2013. In connection with the special cash dividend, anti-dilutive adjustments were made to all outstanding stock options on the dividend record date to preserve their value following the special cash dividend, as required by the Company's 2006 Equity Incentive Plan. The modifications were made to reduce the exercise prices of the outstanding stock options and to increase the number of shares issuable upon the exercise of each option such that the aggregate difference between the market price and exercise price times the number of shares issuable upon exercise was substantially the same immediately before and after the payment of the special dividend. These adjustments did not result in additional share-based compensation expense, as the fair value of the outstanding options immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. These adjustments are reflected in the “Special Dividend Adjustment” line in the stock option activity table below.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The fair value of the Company’s stock option awards is generally expensed on a straight-line basis over the vesting period of four years, except for stock options granted to the Company’s outside directors, which is recognized over the vesting period of one year or less.

Prior to the Company's separation transaction, the expected term of all awards granted was derived from the Company's historical experience with the exception of awards granted to our outside directors prior to fiscal 2013 which were derived utilizing the “simplified” method presented in SEC Staff Accounting Bulletin Nos. 107 and 110, “Share-Based Payment”. Expected volatility was based on an average of the historical volatility of Leidos' stock and the implied volatility from traded options on Leidos stock. The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the stock option on the date of grant. The Company used historical data to estimate forfeitures.

After the separation transaction, the expected term for all awards granted is derived utilizing the “simplified” method due to the lack of historical experience post separation. Expected volatility is estimated based on a weighted average historical volatility of a group of publicly-traded peer companies for a period consistent with the expected option term. The Company will continue to use peer group volatility information, until historical volatility of the Company is relevant, to measure expected volatility for future option grants. The risk-free rate is derived in same manner as prior to the separation transaction. The Company uses historical data to estimate forfeitures.

The weighted average grant-date fair value and assumptions used to determine fair value of stock options granted for each of the three years ended January 30, 2015 were as follows:

	Year Ended
	January 30, 2015			January 31, 2014 (Grants After Spin)			January 31, 2014 (Grants Before Spin)			January 31, 2013
Weighted average grant-date fair value	$	6.15		$	9.04		$	9.48		$	6.76		**
Expected term (in years)	4.7			4.8			5.0			5.0
Expected volatility	25.1		%	29.5		%	30.0		%	24.5		%
Risk-free interest rate	1.6		%	1.4		%	1.4		%	1.0		%
Dividend yield	2.9		%	2.4		%	2.8		%	3.7		%

** Adjusted for additional awards granted for the $4.00 Special Dividend

Stock option activity for each of the periods presented was as follows:

	Shares of stock under stock options		Weighted average exercise  price		Weighted average remaining contractual term	Aggregate intrinsic value
	(in millions)				(in years)	(in millions)
Outstanding at January 31, 2012	5.2		$	71.60	2.5	$	—
Options granted	1.3		52.79
Options forfeited or expired	(1.6	)	70.17
Options exercised	—		—			—
Outstanding at January 31, 2013	4.9		67.24		3.0	—
Options granted	1.4		54.86
Special dividend adjustments	0.4
Options forfeited or expired	(1.3	)	71.80
Spin-off Adjustment	(1.9	)	57.85
Outstanding at September 27, 2013 (before spin)	3.5		$	59.25	3.9	$	24

Outstanding at September 28, 2013 (after spin)	4.9		**	$	40.20	**	3.9	$	24
Options granted	0.2			45.16
Options forfeited or expired	(0.4	)		39.43
Options exercised	(0.2	)		43.10				1
Outstanding at January 31, 2014	4.5			$	40.32		3.8	$	25
Options granted	0.7			37.25
Options forfeited or expired	(1.5	)		43.90
Options exercised	(0.1	)		34.89				1
Outstanding at January 30, 2015	3.6			$	38.50		4.0	$	14
Exercisable at January 30, 2015	1.5			$	40.90		2.4	$	4
Vested and expected to vest in the future as of January 30, 2015	3.5			$	38.57		3.9	$	13

**Adjustedfor Conversion Ratio of 1.4523

As of January 30, 2015, there was $5 million of unrecognized compensation cost, net of estimated forfeitures, related to stock options, which is expected to be recognized over a weighted-average period of 1.5 years. The tax benefits realized from exercises of stock options for the three years ending January 30, 2015 were immaterial. The fair value of stock exchanged upon exercises of stock options was $1 million for the year ended January 31, 2014.

Vesting Stock Awards.Compensation expense is measured at the grant date fair value and generally recognized over the vesting period of four years, or seven years for certain stock awards granted under the Stock Compensation Plans based upon required service conditions and in some cases performance conditions.

Vesting stock award activity for each of the periods presented was as follows:

	Shares of stock under stock awards		Weighted average grant- date fair value
	(in millions)
Unvested at January 31, 2012	3.0		$	70.00
Awards granted	1.7		52.48
Awards forfeited	(0.4	)	62.84
Awards vested	(1.2	)	71.28
Unvested at January 31, 2013	3.1		60.78
Awards granted	2.1		53.51
Awards forfeited	(0.4	)	58.28
Awards vested	(0.9	)	64.76
Spin-off Adjustment	(1.5	)	57.04
Unvested at September 27, 2013 (before spin)	2.4		$	59.98

Unvested stock awards at September 28, 2013 (after spin)	3.5		**	$	41.54	**
Awards granted	0.4		*	45.41		*
Awards forfeited	(0.2	)		39.75
Unvested stock awards at January 31, 2014	3.7			$	39.58
Awards granted	0.8			37.06
Awards forfeited	(0.5	)		39.05
Awards vested	(1.0	)		41.08
Unvested stock awards at January 30, 2015	3.0			$	38.51

* Includes Modified Performance-Based Awards

** Adjusted for Conversion Ratio of 1.4523

As of January 30, 2015, there was $45 million of unrecognized compensation cost, net of estimated forfeitures, related to vesting stock awards, which is expected to be recognized over a weighted average period of 1.6 years. The fair value of vesting stock awards that vested in fiscal 2015, 2014, and 2013 was $34 million, $49 million, and $66 million, respectively.

Performance-Based Stock Awards.The Company grants performance-based stock awards to certain officers and key employees of the Company under the 2006 Equity Incentive Plan. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. The performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the spin-off with the target shares prorated for the completed period earned. For all of the remaining target shares in the original award, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period and reflected in the vesting stock awards table above.

There were no performance-based stock awards granted in fiscal 2014 and the outstanding awards represent the awards whose performance conditions were completed in the last fiscal quarter prior to the spin-off and continue to vest over the original service period of the award. For the fiscal 2015 awards granted, one-third of the target number of shares of stock granted under the awards will be allocated to each fiscal year over the three-year performance period and the actual number of shares to be issued with respect to each fiscal year will be based upon the achievement of that fiscal year’s performance criteria.

Performance-based stock award activity for each of the periods presented was as follows:

	Expected number of shares of stock to be issued under performance-based stock awards			Weighted average grant- date fair value
	(in millions)
Unvested at January 31, 2013	0.3			$	52.96
Awards canceled	(0.2	)	*	53.11		*
Unvested at January 31, 2014	0.1		**	$	36.65	**
Awards granted	0.1			37.64
Awards vested	(0.1	)		36.69
Unvested at January 30, 2015	0.1			$	37.70

* Includes Modified Performance-Based Stock Awards

**Adjusted for Conversion Ratio of 1.4523

The weighted average grant date fair value for performance-based stock during fiscal 2015 was $36.88 and $52.52 during fiscal 2013. There were no grants for performance-based stock awards during fiscal 2014.

As of January 30, 2015, there was $1.0 million of unrecognized compensation cost, net of estimated forfeitures, related to performance-based stock awards granted under the 2006 Equity Incentive Plan, which is expected to be recognized over a weighted average period of 2.0 years. The fair value of performance-based stock awards that vested in fiscal 2015 and fiscal 2014 was $2.3 million and $1.5 million, respectively. There were no vesting events for performance-based stock awards during fiscal 2013.