Cisco 2015 Annual Report Download - page 121

The following table summarizes significant ranges of outstanding and exercisable stock options as of July 25, 2015 (in millions,
except years and share prices):
STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE
Range of Exercise Prices
Number
Outstanding
Weighted-
Average
Remaining
Contractual
Life
(in Years)
Weighted-
Average
Exercise
Price per
Share
Aggregate
Intrinsic
Value
Number
Exercisable
Weighted-
Average
Exercise
Price per
Share
Aggregate
Intrinsic
Value
$ 0.01 – 20.00 ........... 4 5.0 $ 4.96 $ 97 3 $ 6.15 $ 63
$ 20.01 – 25.00 ........... 19 0.3 23.03 101 19 23.03 101
$ 25.01 – 30.00 ........... 14 1.0 26.83 24 14 26.82 24
$ 30.01 – 35.00 ........... 66 1.1 32.16 — 66 32.16 —
Total .................... 103 1.1 $ 28.68 $ 222 102 $ 29.02 $ 188
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the Company’s closing
stock price of $28.40 as of July 24, 2015, that would have been received by the option holders had those option holders exercised
their stock options as of that date. The total number of in-the-money stock options exercisable as of July 25, 2015 was 34 million.
As of July 26, 2014 , 183 million outstanding stock options were exercisable and the weighted-average exercise price was $26.50.
(g) Valuation of Employee Share-Based Awards
Time-based restricted stock units and PRSUs that are based on the Company’s financial performance metrics or non-financial
operating goals are valued using the market value of the Company’s common stock on the date of grant, discounted for the
present value of expected dividends. On the date of grant, the Company estimated the fair value of the total shareholder return
(TSR) component of the PRSUs using a Monte Carlo simulation model. The assumptions for the valuation of time-based RSUs
and PRSUs are summarized as follows:
RESTRICTED STOCK UNITS
Years Ended July 25, 2015 July 26, 2014 July 27, 2013
Number of shares granted (in millions) ............................... 55 56 64
Grant date fair value per share ....................................... $ 25.30 $ 20.61 $ 18.39
Weighted-average assumptions/inputs:
Expected dividend yield ........................................... 2.9% 3.1% 3.0%
Range of risk-free interest rates .................................... 0.0% – 1.8% 0.0% – 1.7% 0.0% –1.1%
PERFORMANCE RESTRICTED STOCK UNITS
Years Ended July 25, 2015 July 26, 2014 July 27, 2013
Number of shares granted (in millions) ............................... 11 74
Grant date fair value per share ....................................... $ 24.85 $ 21.90 $ 19.73
Weighted-average assumptions/inputs:
Expected dividend yield ........................................... 3.0% 3.0% 2.9%
Range of risk-free interest rates .................................... 0.0% – 1.8% 0.0% – 1.7% 0.1% – 0.7%
Range of expected volatilities for index ............................ 14.3% –70.0% 14.2% –70.5% 18.3% – 78.3%
The PRSUs granted during fiscal 2015, 2014, and 2013 are contingent on the achievement of the Company’s financial
performance metrics, its comparative market-based returns, or the achievement of financial and non-financial operating goals. For
the awards based on financial performance metrics or comparative market-based returns, generally 50% of the PRSUs are earned
based on the average of annual operating cash flow and earnings per share goals established at the beginning of each fiscal year
over a three-year performance period. Generally, the remaining 50% of the PRSUs are earned based on the Company’s TSR
measured against the benchmark TSR of a peer group over the same period. Each PRSU recipient could vest in 0% to 150% of
the target shares granted contingent on the achievement of the Company’s financial performance metrics or its comparative
market-based returns, and 0% to 100% of the target shares granted contingent on the achievement of non-financial operating
goals.
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