Crucial 2014 Annual Report Download - page 87

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85
Equity Plans
As of August 28, 2014, we had an aggregate of 161 million shares of common stock reserved for the issuance of stock
options and restricted stock awards, of which 62 million shares were subject to outstanding awards and 99 million shares were
available for future awards. Awards are subject to terms and conditions as determined by our Board of Directors.
Stock Options
Our stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year
from the date of grant. Stock options issued after February 2014 generally expire eight years from the date of grant. Options
issued from October 2004 to February 2014 generally expire six years from the date of grant.
Option activity for 2014 is summarized as follows:
Number of
Shares
Weighted-
Average
Exercise Price
Per Share
Weighted-
Average
Remaining
Contractual
Life
(In Years) Aggregate
Intrinsic Value
Outstanding at August 29, 2013 71 $ 7.41
Granted 12 22.61
Exercised (32) 8.27
Cancelled or expired (3) 9.27
Outstanding at August 28, 2014 48 10.57 3.8 $ 1,078
Exercisable at August 28, 2014 14 $ 6.88 2.4 $ 362
Expected to vest after August 28, 2014 33 11.92 4.3 692
The weighted-average grant-date fair value per share was $9.64, $3.34 and $3.18 for options granted during 2014, 2013
and 2012, respectively. The total intrinsic value was $421 million, $103 million, and $6 million for options exercised during
2014, 2013 and 2012, respectively.
The fair values of option awards were estimated at each grant date using the Black-Scholes option valuation model. The
Black-Scholes model requires the input of assumptions, including the expected stock-price volatility and estimated option
life. The expected volatilities utilized were based on implied volatilities from traded options on our stock and on historical
volatility. The expected lives of options granted were based, in part, on historical experience and on the terms and conditions
of the options. The risk-free interest rates utilized were based on the U.S. Treasury yield in effect at each grant date. No
dividends were assumed in estimated option values. Assumptions used in the Black-Scholes model are presented below:
For the year ended 2014 2013 2012
Average expected life in years 4.9 5.1 5.1
Weighted-average expected volatility 48% 59% 66%
Weighted-average risk-free interest rate 1.6% 0.7% 0.9%