Visa 2014 Annual Report Download - page 127

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2014
The following table summarizes the Company’s option activity for fiscal 2014:
Options
Weighted-
Average
Exercise Price
Per Share
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2013 ............... 3,917,206 $ 72.21
Granted .................................. 435,025 $ 201.37
Forfeited ................................. (116,261) $ 150.56
Exercised ................................. (1,323,544) $ 68.45
Outstanding at September 30, 2014 ........... 2,912,426 $ 90.08 5.4 $359
Options exercisable at September 30, 2014 ..... 2,181,759 $ 63.03 4.3 $328
Options exercisable and expected to vest at
September 30, 2014(2) ...................... 2,832,053 $ 87.79 5.3 $356
(1) Calculated using the closing stock price on the last trading day of fiscal 2014 of $213.37, less the
option exercise price, multiplied by the number of instruments.
(2) Applies a forfeiture rate to unvested options outstanding at September 30, 2014 to estimate the
number expected to vest in the future.
For the options exercised during fiscal 2014, 2013 and 2012, the total intrinsic value was $187
million, $176 million and $247 million, respectively, and the tax benefit realized was $65 million, $59
million and $86 million, respectively. As of September 30, 2014, there was $17 million of total
unrecognized compensation cost related to unvested options, which is expected to be recognized over
a weighted-average period of approximately 1.4 years.
Restricted Stock Awards and Restricted Stock Units
RSAs and RSUs issued under the EIP primarily vest ratably over 3 years from the date of grant,
subject to earlier vesting in full under certain conditions.
Upon vesting, the RSAs are settled in class A common stock on a one-for-one basis. During the
vesting period, RSA award recipients are eligible to receive dividends and participate in the same
voting rights as those granted to the holders of the underlying class A common stock. Upon vesting,
RSUs can be settled in class A common stock on a one-for-one basis or in cash, or a combination
thereof, at the Company’s option. The Company does not currently intend to settle any RSUs in cash.
During the vesting period, RSU award recipients are eligible to receive dividend equivalents, but do not
participate in the voting rights granted to the holders of the underlying class A common stock.
The fair value and compensation cost before estimated forfeitures for RSAs and RSUs is
calculated using the closing price of class A common stock on the date of grant. The weighted-average
grant-date fair value of RSAs granted during fiscal 2014, 2013 and 2012 was $199.91, $147.18 and
$96.39, respectively. The weighted-average grant-date fair value of RSUs granted during fiscal 2014,
2013 and 2012 was $197.76, $146.18 and $96.97, respectively. The total grant-date fair value of RSAs
and RSUs vested during fiscal 2014, 2013 and 2012 was $126 million, $98 million and $81 million,
respectively.
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