XML 28 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation Plans
 12 Months Ended
Aug. 28, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation Plans
Note 7—Stock-Based Compensation Plans
The Company grants stock-based compensation to employees and non-employee directors. Beginning in 2009, RSU grants to all executive officers have been performance-based. Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company. RSUs held by employees and non-employee directors are subject to quarterly vesting upon certain terminations of employment or service. Employees who attain certain years of service with the Company receive shares under accelerated vesting provisions on the annual vesting date rather than upon retirement. The Seventh Restated 2002 Stock Incentive Plan (Seventh Plan), amended in the second quarter of fiscal 2015, is the Company’s only stock-based compensation plan with shares available for grant at the end of 2016. Each share issued in respect of stock awards is counted as 1.75 shares toward the limit of shares made available under the Seventh Plan. The Seventh Plan authorized the issuance of 23,500,000 shares (13,429,000 RSUs) of common stock for future grants in addition to the shares authorized under the previous plan. The Company issues new shares of common stock upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares equal to the minimum statutory withholding taxes.
As required by the Company's Seventh Plan, in conjunction with the special cash dividend discussed in Note 6, adjustments were made to awards outstanding on the dividend record date to preserve their value following the dividend, as follows: (i) the number of shares subject to outstanding RSUs was increased; and (ii) the exercise prices of outstanding stock options were reduced and the number of shares subject to such options was increased. Approximately 410,000 stock options were adjusted, and approximately 8,956,000 RSUs were adjusted. These adjustments did not result in additional stock-based compensation expense, as the fair value of the outstanding awards did not change. As further required by the Seventh Plan, the maximum number of shares issuable under the Seventh Plan was proportionally adjusted, which resulted in an additional 750,000 RSU shares available to be granted.
Summary of Restricted Stock Unit Activity
RSUs granted to employees and to non-employee directors generally vest over five years and three years, respectively. Additionally, the terms of the RSUs, including performance-based awards, provide for accelerated vesting for employees and non-employee directors who have attained 25 or more years and five or more years of service with the Company, respectively, and provide for vesting upon certain terminations of employment or service. Recipients are not entitled to vote or receive dividends on non-vested and undelivered shares. At the end of 2016, 15,068,000 shares were available to be granted as RSUs under the Seventh Plan.
The following awards were outstanding at the end of 2016:
•
7,878,000 time-based RSUs that vest upon continued employment over specified periods of time;
•
448,000 performance-based RSUs, of which 236,000 were granted to executive officers subject to the certification of the attainment of specified performance targets for 2016. This certification occurred in September 2016, at which time a portion vested as a result of the long service of all executive officers. The remaining awards vest upon continued employment over specified periods of time.
The following table summarizes RSU transactions during 2016:
 
Number of
Units
(in 000’s)
 
Weighted-Average
Grant Date Fair
Value
Outstanding at the end of 2015
9,233

 
$
99.72

Granted
3,521

 
153.46

Vested and delivered
(4,147
)
 
102.43

Forfeited
(281
)
 
115.69

Outstanding at the end of 2016
8,326

 
$
120.56


The weighted-average grant date fair value of RSUs granted was $153.46, $125.68, and $113.64 in 2016, 2015, and 2014, respectively. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2016 was $690 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2016 were approximately 2,602,000 RSUs vested but not yet delivered.
Summary of Stock-Based Compensation
The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans:
 
2016
 
2015
 
2014
Stock-based compensation expense before income taxes
$
459

 
$
394

 
$
327

Less recognized income tax benefit
(150
)
 
(131
)
 
(109
)
Stock-based compensation expense, net of income taxes
$
309

 
$
263

 
$
218