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Stock-Based Compensation and Benefit Plans | 12 Months Ended
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Apr. 01, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation and Benefit Plans | Stock-Based Compensation and Benefit Plans Stock incentive plans The purpose of our stock incentive plans is to attract, retain and motivate eligible persons whose present and potential contributions are important to our success by offering them an opportunity to participate in our future performance through equity awards. We have one primary stock incentive plan: the 2013 Equity Incentive Plan (the 2013 Plan), under which incentive stock options may be granted only to employees (including officers and directors who are also employees), and other awards may be granted to employees, officers, directors, consultants, independent contractors, and advisors. As amended, our stockholders have approved and reserved 82 million shares of common stock for issuance under the 2013 Plan. As of April 1, 2022, 11 million shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting. In connection with the acquisitions of various companies, we have assumed the equity awards granted under stock incentive plans of the acquired companies or issued equity awards in replacement thereof. No new awards will be granted under our acquired stock plans. RSUs
(In millions, except per share and year data) | Number of Shares |  | Weighted- Average Grant Date Fair Value
Outstanding as of April 2, 2021 | 5 |  |  | $ | 20.62 |
Granted | 4 |  |  | $ | 22.53 |
Vested | (2) |  |  | $ | 20.89 |
Forfeited | (1) |  |  | $ | 21.07 |
Outstanding as of April 1, 2022 | 6 |  |  | $ | 21.80 |
RSUs generally vest over a three-year period. The weighted-average grant date fair value per share of RSUs granted during fiscal 2022, 2021 and 2020 was $22.53, $20.70, and $19.65, respectively. The total fair value of RSUs released in fiscal 2022, 2021 and 2020 was $57 million, $86 million, and $300 million, respectively, which represents the market value of our common stock on the date the RSUs were released. PRUs
(In millions, except per share and year data) | Number of Shares |  | Weighted- Average Grant Date Fair Value
Outstanding and unvested as of April 2, 2021 | 1 |  |  | $ | 27.50 |
Granted | 3 |  |  | $ | 28.68 |
Forfeited | (1) |  |  | $ | 28.40 |
Unvested at April 1, 2022 | 3 |  |  | $ | 28.50 |
Vested and unreleased as of April 1, 2022 | — |  |  |
Outstanding as of April 1, 2022 | 3 |  |  |
The total fair value of PRUs released in fiscal 2022, 2021 and 2020 was $0 million, $43 million, and $39 million, respectively, which represents the market value of our common stock on the date the PRUs were released. We have granted PRUs to certain of our executives. Typically, these PRUs have a three-year vest period. PRUs granted in fiscal 2022 and 2021 contain a combination of our company’s performance and market conditions whereas our fiscal 2020 PRUs only contain market conditions. The performance conditions are based on the achievement of specified one-year non-GAAP financial metrics. The market conditions are based on the achievement of our relative total shareholder return over a two- and three-year period. Typically, 0% to 200% of target shares are eligible to be earned based on the achievement of the performance and market conditions. Valuation of PRUs The fair value of each PRU that does not contain a market condition is equal to the market value of our common stock on the date of grant. The fair value of each PRU that contains a market condition is estimated using the Monte Carlo simulation model. The valuation and the underlying weighted-average assumptions for PRUs are summarized below:
| Year Ended
| April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Expected term | 3.9 years |  | 2.7 years |  | 1.9 years
Expected volatility | 37.6 | % |  | 42.5 | % |  | 38.1 | %
Risk-free interest rate | 1.0 | % |  | 0.2 | % |  | 1.7 | %
Expected dividend yield | — | % |  | — | % |  | 1.7 | %
Weighted-average grant date fair value of PRUs | $ | 28.68 |  | $ | 26.39 |  | $ | 21.69
Stock options
(In millions, except per share and year data) | Number of Shares |  | Weighted-Average Exercise Price |  | Weighted- Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding as of April 1, 2021 (1) | — |  |  | $ | 5.22 |  |  |  |  |
Granted | — |  |  | $ | — |  |  |  |  |
Exercised (1) | — |  |  | $ | 4.73 |  |  |  |  |
Canceled | — |  |  | $ | — |  |  |  |  |
Forfeited and expired (1) | — |  |  | $ | 7.01 |  |  |  |  |
Outstanding as of April 1, 2022 (1) | — |  |  | $ | 5.51 |  |  |  |  |
Exercisable as of April 1, 2022 (1) | — |  |  | $ | 5.51 |  |  | 3.8 |  | $ | 4 |
(1) The number of shares is less than 1 million. The total intrinsic value of options exercised during fiscal 2022, 2021 and 2020 was $3 million, $18 million, and $171 million, respectively. The fair value of options granted in fiscal 2020 was $4.76 per share. No options were granted in fiscal 2022 and 2021. ESPP Under our 2008 Employee Stock Purchase Plan, employees may annually contribute up to 10% of their gross compensation, subject to certain limitations, to purchase shares of our common stock at a discounted price. Eligible employees are offered shares through a 12-month offering period, which consists of two consecutive 6-month purchase periods, at 85% of the lower of either the fair market value on the purchase date or the fair market value at the beginning of the offering period. As of April 1, 2022, 38 million shares have been issued under this plan, and 32 million shares remained available for future issuance. The following table summarizes activity related to the purchase rights issued under the ESPP:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Shares issued under the ESPP | 1 |  |  | 1 |  |  | 2 |
Proceeds from issuance of shares | $ | 13 |  |  | $ | 14 |  |  | $ | 39 |
The fair value of each stock purchase right under our ESPP is estimated using the Black-Scholes option pricing model. The weighted-average grant date fair value related to rights to acquire shares of common stock under our ESPP in fiscal 2022, 2021 and 2020 was $6.77 per share, $5.65 per share, and $5.17 per share, respectively. Dividend equivalent rights (DERs) Our RSUs and PRUs contain dividend equivalent rights (DER) that entitles the recipient of an award to receive cash dividend payments when the associated award is released. The amount of DER equals to the cumulated dividends on the issued number of common stock that would have been payable since the date the associated award was granted. As of April 1, 2022 and April 2, 2021, current dividends payable related to DER was $11 million and $12 million, respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $2 million and $10 million, respectively, recorded as part of Other long-term liabilities. Stock-based award modifications In connection with the Broadcom sale, during fiscal 2021 and 2020, we entered into severance and retention arrangements with certain executives. Pursuant to these agreements, these executives were entitled to receive vesting of 50% of their unvested equity, subject to a service condition, and the remaining unvested equity will be earned at levels of 0% to 150%, subject to market and service conditions. In addition, we entered into severance and retention arrangements with certain other employees in connection with restructuring activities and the Broadcom sale, which accelerated either a portion or all of the vesting of their stock-based awards. All award modifications related to the Broadcom sale were fully expensed by fiscal 2021. The following table summarizes the stock-based compensation expense recognized as a result of these modifications:
|  |  | Year Ended
(In millions) |  |  | April 2, 2021 |  | April 3, 2020
Sales and marketing |  |  | $ | 2 |  |  | $ | 6 |
Research and development |  |  | 9 |  |  | — |
General and administrative |  |  | 8 |  |  | 20 |
Restructuring and other costs |  |  | 10 |  |  | 20 |
Discontinued operations |  |  | 1 |  |  | 99 |
Total stock-based compensation |  |  | $ | 30 |  |  | $ | 145 |
Stock-based compensation expense Total stock-based compensation expense and the related income tax benefit recognized for all of our equity incentive plans in our Consolidated Statements of Operations were as follows:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Cost of revenues | $ | 2 |  |  | $ | 1 |  |  | $ | 2 |
Sales and marketing | 19 |  |  | 18 |  |  | 29 |
Research and development | 19 |  |  | 26 |  |  | 30 |
General and administrative | 30 |  |  | 26 |  |  | 58 |
Restructuring and other costs | — |  |  | 10 |  |  | 20 |
Other income (expense), net | — |  |  | (1) |  |  | 1 |
Total stock-based compensation from continuing operations | 70 |  |  | 80 |  |  | 140 |
Discontinued operations | — |  |  | 1 |  |  | 172 |
Total stock-based compensation expense | $ | 70 |  |  | $ | 81 |  |  | $ | 312 |
Income tax benefit for stock-based compensation expense | $ | (11) |  |  | $ | (18) |  |  | $ | (55) |
As of April 1, 2022, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $160 million, which will be recognized over an estimated weighted-average amortization period of 2.2 years. Other employee benefit plans 401(k) plan We maintain a salary deferral 401(k) plan for all of our U.S. employees. This plan allows employees to contribute their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Code. We match the first 3.5% of a participant’s eligible compensation up to $6,000 in a calendar year. Our employer matching contributions to the 401(k) plan were as follows, including contributions to employees of our discontinued operations:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
401(k) matching contributions | $ | 3 |  |  | $ | 3 |  |  | $ | 16 |

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