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Stock Plans | 12 Months Ended
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Dec. 31, 2015
Stock Plans | Note 11. Stock Plans On May 21, 2014, our shareholders approved the Amended and Restated 2005 Performance Incentive Plan (the “2005 Plan”). Under the amended plan, we make grants to non-employee directors under the 2005 Plan, and we no longer make any grants under the Amended and Restated 2006 Stock Compensation Plan for Non-Employee Directors (the “2006 Directors Plan”). We also increased the number of shares available for issuance under the 2005 Plan by 75.7 million, which includes the shares remaining available for issuance under the 2006 Directors Plan as of March 14, 2014. Under the 2005 Plan, we are authorized to issue a maximum of 243.7 million shares of our Common Stock. We may not make any grants under the 2005 Plan after May 21, 2024. As of December 31, 2015, there were 81.8 million shares available to be granted under the 2005 Plan. In connection with the Spin-Off and divestiture of Kraft Foods Group, under the provisions of our existing plans, employee stock option and restricted stock and deferred stock unit grants were adjusted to preserve the fair value of the awards immediately before and after the Spin-Off. As such, we did not record any incremental compensation expense related to the conversion of the awards. In connection with the stock awards held by our respective employees at the time of the Spin-Off, we collected a $55 million cash net settlement for the awards from Kraft Foods Group in March 2013. Stock Options: Stock options (including stock appreciation rights) are granted at an exercise price equal to the market value of the underlying stock on the grant date, generally become exercisable in three annual installments beginning on the first anniversary of the grant date and have a maximum term of ten years. We account for our employee stock options under the fair value method of accounting using a Black-Scholes methodology to measure stock option expense at the date of grant. The fair value of the stock options at the date of grant is amortized to expense over the vesting period. We recorded compensation expense related to stock options held by our employees of $50 million in 2015, $47 million in 2014 and $39 million in 2013 in our results from continuing operations. The deferred tax benefit recorded related to this compensation expense was $13 million in 2015, $12 million in 2014 and $11 million in 2013. The unamortized compensation expense related to our employee stock options was $62 million at December 31, 2015 and is expected to be recognized over a weighted-average period of 1 year. Our weighted-average Black-Scholes fair value assumptions were:
|  | Risk-Free Interest Rate |  |  | Expected Life |  |  | Expected Volatility |  |  | Expected Dividend Yield |  |  | Fair Value at Grant Date |
2015 |  |  | 1.70% |  |  |  | 6 years |  |  |  | 18.51% |  |  |  | 1.61% |  |  | $ | 6.12 |
2014 |  |  | 1.87% |  |  |  | 6 years |  |  |  | 21.48% |  |  |  | 1.64% |  |  | $ | 6.60 |
2013 |  |  | 1.15% |  |  |  | 6 years |  |  |  | 20.36% |  |  |  | 1.94% |  |  | $ | 4.31 |
The risk-free interest rate represents the constant maturity U.S. government treasuries rate with a remaining term equal to the expected life of the options. The expected life is the period over which our employees are expected to hold their options. Volatility reflects historical movements in our stock price for a period commensurate with the expected life of the options. The dividend yield reflects the dividend yield in place at the time of the historical grants. Stock option activity is reflected below:
|  |  |  |  | Weighted- |  |  |  |  |  |
|  |  |  |  | Average |  |  | Average |  |  |
|  | Shares Subject |  |  | Exercise or Grant Price |  |  | Remaining Contractual |  | Aggregate Intrinsic |
|  | to Option |  |  | Per Share |  |  | Term |  | Value |
Balance at January 1, 2013 |  |  | 52,753,039 |  |  | $ | 20.45 |  |  |  |  | $ | 264 million |
Annual grant to eligible employees |  |  | 11,644,280 |  |  |  | 27.05 |  |  |  |  |  |  |
Additional options issued |  |  | 762,512 |  |  |  | 29.69 |  |  |  |  |  |  |
Total options granted |  |  | 12,406,792 |  |  |  | 27.21 |  |  |  |  |  |  |
Options exercised (1) |  |  | (7,185,616 | ) |  |  | 19.41 |  |  |  |  | $ | 79 million |
Options cancelled |  |  | (2,190,776 | ) |  |  | 23.86 |  |  |  |  |  |  |
Balance at December 31, 2013 |  |  | 55,783,439 |  |  |  | 21.96 |  |  |  |  | $ | 744 million |
Annual grant to eligible employees |  |  | 9,919,810 |  |  |  | 34.17 |  |  |  |  |  |  |
Additional options issued |  |  | 500,250 |  |  |  | 33.65 |  |  |  |  |  |  |
Total options granted |  |  | 10,420,060 |  |  |  | 34.14 |  |  |  |  |  |  |
Options exercised (1) |  |  | (8,076,550 | ) |  |  | 20.85 |  |  |  |  | $ | 125 million |
Options cancelled |  |  | (1,695,398 | ) |  |  | 27.65 |  |  |  |  |  |  |
Balance at December 31, 2014 |  |  | 56,431,551 |  |  |  | 24.19 |  |  |  |  | $ | 685 million |
Annual grant to eligible employees |  |  | 8,899,530 |  |  |  | 36.94 |  |  |  |  |  |  |
Additional options issued |  |  | 901,340 |  |  |  | 35.84 |  |  |  |  |  |  |
Total options granted |  |  | 9,800,870 |  |  |  | 36.84 |  |  |  |  |  |  |
Options exercised (1) |  |  | (6,444,515 | ) |  |  | 22.94 |  |  |  |  | $ | 108 million |
Options cancelled |  |  | (2,753,798 | ) |  |  | 32.35 |  |  |  |  |  |  |
Balance at December 31, 2015 |  |  | 57,034,108 |  |  |  | 26.12 |  |  | 6 years |  | $ | 229 million |
Exercisable at December 31, 2015 |  |  | 38,658,921 |  |  |  | 22.33 |  |  | 5 years |  | $ | 870 million |
| (1) | Cash received from options exercised was $148 million in 2015, $168 million in 2014 and $139 million in 2013. The actual tax benefit realized for the tax deductions from the option exercises totaled $58 million in 2015, $29 million in 2014 and $14 million in 2013.
Restricted Stock, Deferred Stock Units and Performance Share Units: We may grant shares of restricted stock or deferred stock units to eligible employees, giving them, in most instances, all of the rights of shareholders, except that they may not sell, assign, pledge or otherwise encumber the shares and our deferred stock units do not have voting rights until vested. Shares of restricted stock and deferred stock units are subject to forfeiture if certain employment conditions are not met. Restricted stock and deferred stock units generally vest on the third anniversary of the grant date. Beginning in 2016, we will only grant deferred stock units and no longer grant restricted stock. Performance share units granted under our 2005 Plan vest based on varying performance, market and service conditions. The unvested performance share units have no voting rights and do not pay dividends. Dividend equivalents accumulated over the vesting period are paid only after the performance share units vest. The fair value of the restricted stock, deferred stock units and performance share units at the date of grant is amortized to earnings over the restriction period. We recorded compensation expense related to restricted stock, deferred stock units and performance share units of $86 million in 2015, $94 million in 2014 and $94 million in 2013 in our results from continuing operations. The deferred tax benefit recorded related to this compensation expense was $24 million in 2015, $26 million in 2014 and $28 million in 2013. The unamortized compensation expense related to our restricted stock, deferred stock units and performance share units was $138 million at December 31, 2015 and is expected to be recognized over a weighted-average period of 2 years. Our restricted stock, deferred stock unit and performance share unit activity is reflected below:
|  |  |  |  |  |  | Weighted-Average |  |  | Weighted-Average |
|  | Number |  |  |  |  | Fair Value |  |  | Aggregate |
|  | of Shares |  |  | Grant Date |  | Per Share |  |  | Fair Value |
Balance at January 1, 2013 |  |  | 12,815,911 |  |  |  |  | $ | 21.55 |  |  |  |  |
Annual grant to eligible employees: |  |  |  |  |  | Feb. 20, 2013 |  |  |  |  |  |  |  |
Performance share units |  |  | 1,542,600 |  |  |  |  |  | 26.24 |  |  |  |  |
Restricted stock |  |  | 949,030 |  |  |  |  |  | 27.05 |  |  |  |  |
Deferred stock units |  |  | 1,386,750 |  |  |  |  |  | 27.05 |  |  |  |  |
Additional shares granted (1) |  |  | 1,353,057 |  |  | Various |  |  | 22.47 |  |  |  |  |
Total shares granted |  |  | 5,231,437 |  |  |  |  |  | 25.63 |  |  | $ | 134 million |
Vested |  |  | (5,350,073 | ) |  |  |  |  | 18.82 |  |  | $ | 101 million |
Forfeited |  |  | (1,048,688 | ) |  |  |  |  | 23.23 |  |  |  |  |
Balance at December 31, 2013 |  |  | 11,648,587 |  |  |  |  |  | 24.48 |  |  |  |  |
Annual grant to eligible employees: |  |  |  |  |  | Feb. 19, 2014 |  |  |  |  |  |  |  |
Performance share units |  |  | 1,143,620 |  |  |  |  |  | 34.97 |  |  |  |  |
Restricted stock |  |  | 750,410 |  |  |  |  |  | 34.17 |  |  |  |  |
Deferred stock units |  |  | 1,240,820 |  |  |  |  |  | 34.17 |  |  |  |  |
Additional shares granted (1) |  |  | 935,463 |  |  | Various |  |  | 33.15 |  |  |  |  |
Total shares granted |  |  | 4,070,313 |  |  |  |  |  | 34.16 |  |  | $ | 139 million |
Vested |  |  | (4,380,452 | ) |  |  |  |  | 22.98 |  |  | $ | 101 million |
Forfeited |  |  | (755,808 | ) |  |  |  |  | 28.14 |  |  |  |  |
Balance at December 31, 2014 |  |  | 10,582,640 |  |  |  |  |  | 28.56 |  |  |  |  |
Annual grant to eligible employees: |  |  |  |  |  | Feb. 18, 2015 |  |  |  |  |  |  |  |
Performance share units |  |  | 1,598,290 |  |  |  |  |  | 36.94 |  |  |  |  |
Restricted stock |  |  | 386,910 |  |  |  |  |  | 36.94 |  |  |  |  |
Deferred stock units |  |  | 866,640 |  |  |  |  |  | 36.94 |  |  |  |  |
Additional shares granted (1) |  |  | 1,087,322 |  |  | Various |  |  | 39.35 |  |  |  |  |
Total shares granted |  |  | 3,939,162 |  |  |  |  |  | 37.61 |  |  | $ | 148 million |
Vested |  |  | (3,905,745 | ) |  |  |  |  | 37.83 |  |  | $ | 148 million |
Forfeited |  |  | (1,197,841 | ) |  |  |  |  | 32.51 |  |  |  |  |
Balance at December 31, 2015 |  |  | 9,418,216 |  |  |  |  |  | 28.00 |  |  |  |  |
| (1) | Includes performance share units, restricted stock and deferred stock units.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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