STOCK PLANS

3 Months Ended

Aug. 28, 2016

(10) Stock Plans

We have various stock-based compensation programs under which awards, including stock options, restricted stock, restricted stock units, and performance awards, may be granted to employees and non-employee directors. These programs and related accounting are described in Note 11 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 29, 2016.

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings was as follows:

		Quarter Ended
In Millions		Aug. 28, 2016		Aug. 30, 2015
Compensation expense related to stock-based payments	$	39.0	$	32.9

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings includes amounts recognized in restructuring, impairment, and other exit costs in fiscal 2016.

As of August 28, 2016, unrecognized compensation expense related to non-vested stock options, restricted stock units, and performance award units was $151.4 million. This expense will be recognized over 25 months, on average.

Net cash proceeds from the exercise of stock options less shares used for withholding taxes and the intrinsic value of options exercised were as follows:

		Quarter Ended
In Millions		Aug. 28, 2016		Aug. 30, 2015
Net cash proceeds	$	63.6	$	47.7
Intrinsic value of options exercised	$	114.3	$	82.2

We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and dividend yield. We estimate our future stock price volatility using the historical volatility over the expected term of the option, excluding time periods of volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We also have considered, but did not use, implied volatility in our estimate, because trading activity in options on our stock, especially those with tenors of greater than 6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting the other valuation assumptions is explained in Note 11 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 29, 2016.

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as follows:


	Quarter Ended
	Aug. 28, 2016		Aug. 30, 2015
Estimated fair values of stock options granted	$8.80		$7.24
Assumptions:
Risk-free interest rate	1.7	%	2.4	%
Expected term	8.5 years		8.5 years
Expected volatility	17.8	%	17.6	%
Dividend yield	2.9	%	3.2	%

Information on stock option activity follows:

	Options Outstanding (Thousands)		Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (Millions)
Balance as of May 29, 2016	32,401.6	$	37.09
Granted	2,446.0		66.52
Exercised	(2,847.6)		30.29
Forfeited or expired	(29.0)		54.44
Outstanding as of Aug. 28, 2016	31,971.0	$	39.93	4.78	$	989.0
Exercisable as of Aug. 28, 2016	22,897.1	$	33.56	3.37	$	854.3

Information on restricted stock and performance share unit activity follows:

	Equity Classified			Liability Classified
	Share-Settled Units (Thousands)		Weighted-Average Grant-Date Fair Value	Share-Settled Units (Thousands)		Weighted-Average Grant-Date Fair Value
Non-vested as of May 29, 2016	5,100.4	$	48.60	211.4	$	48.37
Granted	1,242.5		67.44	49.5		66.94
Vested	(1,254.8)		38.72	(87.6)		38.64
Forfeited	(94.4)		53.75	(2.8)		55.96
Exercisable as of Aug. 28, 2016	4,993.7	$	55.67	170.5	$	56.04

The total grant date fair value of restricted stock unit awards that vested during the period follows:

	Quarter Ended
In Millions	Aug. 28, 2016	Aug. 30, 2015
Total grant-date fair value	$52.4	$79.8