Mondelez 2014 Annual Report Download - page 96

Table of Contents
Note 12. Stock Plans
On May 21, 2014, our shareholders approved the Amended and Restated 2005 Performance Incentive Plan (the “2005 Plan”).
Under the amended plan, we now make grants to non-employee directors under the 2005 Plan, and we will no longer make any
grants under the Amended and Restated 2006 Stock Compensation Plan for Non-Employee Directors (the “2006 Directors Plan”).
We also increased the number of shares available for issuance under the 2005 Plan by 75.7 million, which includes the shares
remaining available for issuance under the 2006 Directors Plan as of March 14, 2014. Under the 2005 Plan, we are now authorized
to issue a maximum of 243.7 million shares of our Common Stock. We may not make any grants under the 2005 Plan after May 21,
2024. As of December 31, 2014, there were 90.6 million shares available to be granted under the 2005 Plan.
In connection with the Spin-Off and divestiture of Kraft Foods Group, under the provisions of our existing plans, employee stock
option and restricted and deferred stock awards were adjusted to preserve the fair value of the awards immediately before and after
the Spin-Off. As such, we did not record any incremental compensation expense related to the conversion of the awards. In
connection with the stock awards held by our respective employees at the time of the Spin-Off, we collected a $55 million cash net
settlement for the awards from Kraft Foods Group in March 2013.
Stock Options:
Stock options (including stock appreciation rights) are granted at an exercise price equal to the market value of the underlying stock
on the grant date, generally become exercisable in three annual installments beginning on the first anniversary of the grant date
and have a maximum term of ten years.
We account for our employee stock options under the fair value method of accounting using a Black-Scholes methodology to
measure stock option expense at the date of grant. The fair value of the stock options at the date of grant is amortized to expense
over the vesting period. We recorded compensation expense related to stock options held by our employees of $47 million in 2014,
$39 million in 2013 and $39 million in 2012 in our results from continuing operations. The deferred tax benefit recorded related to
this compensation expense was $12 million in 2014, $11 million in 2013 and $11 million in 2012. The unamortized compensation
expense related to our employee stock options was $67 million at December 31, 2014 and is expected to be recognized over a
weighted
-average period of 2 years.
Our weighted-average Black-Scholes fair value assumptions were:
The risk-free interest rate represents the constant maturity U.S. government treasuries rate with a remaining term equal to the
expected life of the options. The expected life is the period over which our employees are expected to hold their options. Volatility
reflects historical movements in our stock price for a period commensurate with the expected life of the options. The dividend yield
reflects the dividend yield in place at the time of the historical grants and reflects a lower expected dividend yield for Mondelēz
International for grants made following the Spin-Off of Kraft Foods Group.
93
Risk
-
Free
Interest Rate
Expected Life
Expected
Volatility
Expected
Dividend Yield
Fair Value
at Grant Date
2014
1.87%
6 years
21.48%
1.64%
$
6.60
2013
1.15%
6 years
20.36%
1.94%
$
4.31
2012
1.16%
6 years
20.13%
3.08%
$
4.78