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Notes to Consolidated Financial Statements
Share-Based Awards Available for Grant A summary of share-based awards available for grant are as follows (in millions):
Share-Based Awards
Available for Grant
BALANCE AT JULY 29, 2006 464
Options granted and assumed (206)
Restricted stock, stock units, and other share-based awards granted and assumed (7)
Share-based awards canceled/forfeited 19
Additional shares reserved 24
BALANCE AT JULY 28, 2007 294
Options granted and assumed (159)
Restricted stock, stock units, and other share-based awards granted and assumed (11)
Share-based awards canceled/forfeited 27
Additional shares reserved 211
BALANCE AT JULY 26, 2008 362
Options granted and assumed (14)
Restricted stock, stock units, and other share-based awards granted and assumed (140)
Share-based awards canceled/forfeited 38
Additional shares reserved 7
BALANCE AT JULY 25, 2009 253
As reflected in the preceding table, for each share awarded as restricted stock or subject to a restricted stock unit award under the 2005
Plan subsequent to November 15, 2007, an equivalent of 2.5 shares is deducted from the available share-based award balance.
Valuation and Expense Information for Share-Based Awards Share-based compensation expense consists primarily of expenses for stock
options, stock purchase rights, restricted stock, and restricted stock units granted to employees. The following table summarizes employee
share-based compensation expense (in millions):
Years Ended July 25, 2009 July 26, 2008 July 28, 2007
Cost of sales—product $46 $40 $39
Cost of sales—service 128 108 104
Employee share-based compensation expense in cost of sales 174 148 143
Research and development 333 295 289
Sales and marketing 440 434 392
General and administrative 193 148 107
Employee share-based compensation expense in operating expenses 966 877 788
Total employee share-based compensation expense (1) $1,140 $1,025 $931
(1) Share-based compensation expense of $91 million, $87 million, and $34 million related to acquisitions and investments for fiscal 2009, 2008, and 2007, respectively, is
disclosed in Note 3 and is not included in the preceding table.
As of July 25, 2009, total compensation cost related to unvested share-based awards, including share-based compensation relating to
acquisitions and investments, not yet recognized was $3.2 billion, which is expected to be recognized over approximately 2.9 years on a
weighted-average basis. The income tax benefit for employee share-based compensation expense was $298 million, $330 million, and
$342 million for fiscal 2009, 2008, and 2007, respectively.
2009 Annual Report 69