Quest Diagnostics 2015 Annual Report Download - page 113

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)
F- 38
December 31, 2015. This amount changes based on the fair market value of the Company's common stock. Total intrinsic
value of options exercised in 2015, 2014 and 2013 was $21 million, $13 million and $32 million, respectively.
As of December 31, 2015, there was $15 million of unrecognized stock-based compensation cost related to nonvested
stock options which is expected to be recognized over a weighted average period of 1.9 years.
The following summarizes the activity relative to stock awards, including restricted stock awards, restricted stock
units and performance share units, for 2015, 2014 and 2013:
2015 2014 2013
Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value
Shares outstanding, beginning of year 1.9 $ 55.50 1.9 $ 57.08 2.0 $ 56.77
Shares granted 0.6 71.17 0.7 52.72 0.8 56.79
Shares vested (0.3) 55.74 (0.3) 57.14 (0.5) 56.25
Shares forfeited and canceled (0.5) 58.18 (0.4) 56.44 (0.4) 55.91
Shares outstanding, end of year 1.7 $ 59.92 1.9 $ 55.50 1.9 $ 57.08
As of December 31, 2015, there was $29 million of unrecognized stock-based compensation cost related to nonvested
stock awards, which is expected to be recognized over a weighted average period of 1.9 years. Total fair value of shares vested
was $20 million, $17 million and $28 million for the years ended December 31, 2015, 2014 and 2013, respectively. The
amount of unrecognized stock-based compensation cost is subject to change based on changes, if any, to management's best
estimates of the achievement of the performance goals specified in such awards and the resulting number of shares that will be
earned at the end of the performance periods.
For the years ended December 31, 2015, 2014 and 2013, stock-based compensation expense totaled $52 million, $51
million and $28 million, respectively. Income tax benefits related to stock-based compensation expense totaled $20 million,
$20 million and $11 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Employee Stock Purchase Plan
Under the Company's Employee Stock Purchase Plan (“ESPP”), substantially all employees can elect to have up to
10% of their annual wages withheld to purchase Quest Diagnostics common stock. The purchase price of the stock is 85% of
the market price of the Company's common stock on the last business day of each calendar month. Under the ESPP, the
maximum number of shares of Quest Diagnostics common stock which may be purchased by eligible employees is 5 million.
Approximately 349 thousand, 392 thousand and 404 thousand shares of common stock were purchased by eligible employees
in 2015, 2014 and 2013, respectively.
Defined Contribution Plans
The Company maintains qualified defined contribution plans covering substantially all of its employees. The
maximum Company matching contribution is 5% of eligible employee compensation. The Company's expense for
contributions to its defined contribution plans aggregated $77 million, $73 million and $71 million for 2015, 2014 and 2013,
respectively.
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K