Equity Plans

As of August 31, 2017, 101 million shares of our common stock were available for future awards under our equity plans.

Stock Options

Our stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Stock options issued after February 2014 expire eight years from the date of grant. Options issued prior to February 2014 expire six years from the date of grant. Option activity for 2017 is summarized as follows:



	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (In Years)	Aggregate Intrinsic Value
Outstanding as of September 1, 2016	42		$	16.37
Granted	8		19.61
Exercised	(14	)	10.17
Canceled or expired	(3	)	22.55
Outstanding as of August 31, 2017	33		19.32		4.4	$	438

Exercisable as of August 31, 2017	17		$	17.44	2.7	$	255
Unvested as of August 31, 2017	16		21.25		6.2	183

The total intrinsic value was $198 million, $52 million, and $229 million for options exercised in 2017, 2016, and 2015, respectively.

Stock options granted and assumptions used in the Black-Scholes option valuation model were as follows:



For the year ended	2017			2016			2015
Stock options granted	8			8			8
Weighted-average grant-date fair value per share	$	8.68		$	6.94		$	14.79
Average expected life in years	5.5			5.5			5.6
Weighted-average expected volatility	46		%	47		%	45		%
Weighted-average risk-free interest rate	1.8		%	1.7		%	1.7		%

Stock price volatility was based on an average of historical volatility and the implied volatility derived from traded options on our stock. The expected lives of options granted were based, in part, on historical experience and on the terms and conditions of the options. The risk-free interest rates utilized were based on the U.S. Treasury yield in effect at each grant date. No dividends were assumed in estimated option values.

Restricted Stock and Restricted Stock Units ("Restricted Stock Awards")

As of August 31, 2017, there were 19 million shares of Restricted Stock Awards outstanding, of which 3 million were performance-based or market-based. For service-based Restricted Stock Awards, restrictions generally lapse in one-fourth increments during each year of employment after the grant date. Vesting for performance-based awards is contingent upon the Company meeting a specified return on assets ("ROA"), as defined, over a three-year performance period and vesting for market-based Restricted Stock Awards is contingent upon the Company achieving total shareholder return ("TSR") relative to the companies included in the S&P 500 over a three-year performance period. At the end of the performance period, the number of actual shares to be awarded will vary between 0% and 200% of target amounts, depending upon the achievement level of the specified ROA or TSR. Restricted Stock Awards activity for 2017 is summarized as follows:



	Number of Shares		Weighted-Average Grant Date Fair Value Per Share
Outstanding as of September 1, 2016	18		$	20.24
Granted	8		18.77
Restrictions lapsed	(6	)	19.53
Canceled	(1	)	20.59
Outstanding as of August 31, 2017	19		19.78



For the year ended	2017		2016		2015
Restricted stock award shares granted	8		10		7
Weighted-average grant-date fair value per share	$	18.77	$	15.40	$	32.60
Aggregate vesting-date fair value of shares vested	$	115	$	71	$	155

Stock-based Compensation Expense



For the year ended	2017		2016		2015
Stock-based compensation expense by caption
Cost of goods sold	$	88	$	76	$	64
Selling, general, and administrative	75		66		61
Research and development	52		49		42
Other	—		—		1
	$	215	$	191	$	168

Stock-based compensation expense by type of award
Stock options	$	71	$	79	$	81
Restricted stock awards	144		112		87
	$	215	$	191	$	168

Stock-based compensation expense of $20 million and $18 million was capitalized and remained in inventory as of August 31, 2017 and September 1, 2016, respectively. As of August 31, 2017, $341 million of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2021, resulting in a weighted-average period of 1.2 years.