Note 9 – Benefit Plans

Stock Plans

The Company had 377.3 million shares reserved for future issuance under its stock plans as of March 26, 2016. RSUs granted generally vest over four years, based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a one-for-one basis. Each share issued with respect to RSUs granted under the Company’s stock plans reduces the number of shares available for grant under the plan by two shares. RSUs cancelled and shares withheld to satisfy tax withholding obligations increase the number of shares available for grant under the plans utilizing a factor of two times the number of RSUs cancelled or shares withheld. Stock options count against the number of shares available for grant on a one-for-one basis.

Rule 10b5-1 Trading Plans

During the three months ended March 26, 2016, Section 16 officers Timothy D. Cook, Angela Ahrendts, Luca Maestri, Daniel Riccio, Philip Schiller and Jeffrey Williams had equity trading plans in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act. An equity trading plan is a written document that pre-establishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including shares acquired pursuant to the Company’s employee and director equity plans.

Restricted Stock Units

A summary of the Company’s RSU activity and related information for the six months ended March 26, 2016 is as follows:

 

		Number of RSUs (in thousands)				Weighted-Average Grant Date Fair Value Per Share				Aggregate Intrinsic Value (in millions)
Balance at September 26, 2015			101,467			$	85.77
RSUs granted			43,513			$	110.57
RSUs vested			(22,353	)		$	78.86
RSUs cancelled			(2,413	)		$	93.43
Balance at March 26, 2016			120,214			$	95.80			$	12,703

RSUs that vested during the three- and six-month periods ended March 26, 2016 had fair values of $450 million and $2.5 billion, respectively, as of the vesting date. RSUs that vested during the three- and six-month periods ended March 28, 2015 had fair values of $317 million and $2.0 billion, respectively, as of the vesting date.

Stock Options

The Company had 1.1 million stock options outstanding as of March 26, 2016, with a weighted-average exercise price per share of $15.48 and weighted-average remaining contractual term of 3.7 years, substantially all of which are exercisable. The aggregate intrinsic value of the stock options outstanding as of March 26, 2016 was $100 million, which represents the value of the Company’s closing stock price on the last trading day of the period in excess of the weighted-average exercise price multiplied by the number of options outstanding.

 

Share-Based Compensation

The following table shows a summary of the share-based compensation expense included in the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 26, 2016 and March 28, 2015 (in millions):

 

		Three Months Ended								Six Months Ended
		March 26, 2016				March 28, 2015				March 26, 2016				March 28, 2015
Cost of sales		$	191			$	142			$	395			$	282
Research and development			468				384				934				758
Selling, general and administrative			389				401				797				775
Total share-based compensation expense		$	1,048			$	927			$	2,126			$	1,815

The income tax benefit related to share-based compensation expense was $347 million and $760 million for the three- and six-month periods ended March 26, 2016, respectively, and was $311 million and $662 million for the three- and six-month periods ended March 28, 2015, respectively. As of March 26, 2016, the total unrecognized compensation cost related to outstanding stock options, RSUs and restricted stock was $9.1 billion, which the Company expects to recognize over a weighted-average period of 2.9 years.