Stock-Based Compensation

6 Months Ended

Dec. 28, 2014

6. Stock-based Compensation

Equity Incentive Plans

At December 28, 2014, 20.8 million shares were available for grant under the Company’s equity incentive plans. The Company’s restricted awards generally vest annually over a period of five years (20% a year) based upon continued employment with the Company. Options vest over a five-year period (generally 10% every six months) based upon continued employment. Options expire seven years after the date of the grant. The Company's last stock option grant to an employee was in January 2009.

The Company has an Employee Stock Purchase Plan (“ESPP”) that permits eligible employees to purchase common stock through payroll deductions at 85% of the fair market value of the common stock at the end of each six-month offering period. The offering periods generally commence on approximately May 1 and November 1 of each year. At December 28, 2014, 0.6 million shares were available for issuance under the ESPP.

Accounting for Stock-Based Compensation

Compensation cost for restricted stock awards is based on the fair market value of the Company’s stock on the date of grant. Compensation cost for stock options is calculated on the date of grant using the fair value of stock options as determined using the Black-Scholes valuation model. The Company amortizes the compensation cost straight-line over the vesting period, which is generally five years. The Black-Scholes valuation model requires the Company to estimate key assumptions such as expected option term, stock price volatility and forfeiture rates to determine the fair value of a stock option. The estimate of these key assumptions is based on historical information and judgment regarding market factors and trends.

As of December 28, 2014, there was approximately $176.2 million of total unrecognized stock-based compensation cost related to share-based payments granted under the Company’s stock-based compensation plans that will be recognized over a period of approximately 5 years. Future grants will add to this total, whereas quarterly amortization and the vesting of the existing grants will reduce this total.

The Company issues new shares of common stock upon exercise of stock options. For the six months ended December 28, 2014, options for approximately 440.0 thousand shares were exercised for a gain to the optionee (aggregate intrinsic value) of $8.9 million determined as of the dates of the option exercises.

Stock Options

The following table summarizes stock option activity and related information under all stock option plans during the period indicated:




		Weighted
		Average
	Stock Options	Exercise
	Outstanding	Price
Outstanding options, June 29, 2014	1,810,099	$	23.05
Granted	—		—
Forfeited and expired	—		—
Exercised	(440,010)		24.03
Outstanding options, December 28, 2014	1,370,089	$	22.74
Options vested and exercisable at:
December 28, 2014	1,369,589	$	22.74

Restricted Stock

The following table summarizes the Company’s restricted stock and restricted stock unit activity under all equity award plans during the period indicated:



		Weighted-
	Restricted Awards	Average Grant-
	Outstanding	Date Fair Value
Non-vested at June 29, 2014	6,117,087	$	36.46
Granted	938,310		42.55
Vested	(922,954)		32.56
Forfeited	(68,006)		35.85
Non-vested at December 28, 2014	6,064,437	$	37.98

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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