Share-Based Compensation

In June 2015, the Company’s stockholders approved an amendment to the 2011 Stock Incentive Plan (Plan). The approved amendment increased the number of shares authorized for issuance under the Plan by 70 million and removed certain limits in the Plan. The Company’s outstanding share-based awards consist mainly of non-qualified stock options, SARs and restricted shares. As of December 31, 2015, the Company had 85 million shares available for future grants of share-based awards under the Plan. As of December 31, 2015, there were also 12 million shares of common stock available for issuance under the ESPP.

Stock Options and SARs

Stock option and SAR activity for the year ended December 31, 2015 is summarized in the table below:



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in millions)				(in years)	(in millions)
Outstanding at beginning of period	33		$	53
Granted	9		110
Exercised	(7	)	53
Forfeited	(1	)	80
Outstanding at end of period	34		68		6.0	$	1,666
Exercisable at end of period	16		47		3.4	1,133
Vested and expected to vest, end of period	33		67		5.9	1,646

Restricted Shares

Restricted share activity for the year ended December 31, 2015 is summarized in the table below:



(shares in millions)	Shares		Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	9		$	61
Granted	3		110
Vested	(5	)	62
Nonvested at end of period	7		82

Other Share-Based Compensation Data



(in millions, except per share amounts)	For the Years Ended December 31,
(in millions, except per share amounts)	2015		2014		2013
Stock Options and SARs
Weighted-average grant date fair value of shares granted, per share	$	22	$	22	$	19
Total intrinsic value of stock options and SARs exercised	482		526		592
Restricted Shares
Weighted-average grant date fair value of shares granted, per share	110		71		58
Total fair value of restricted shares vested	$	460	$	437	$	31
Employee Stock Purchase Plan
Number of shares purchased	2		2		3
Share-Based Compensation Items
Share-based compensation expense, before tax	$	406	$	364	$	331
Share-based compensation expense, net of tax effects	348		314		239
Income tax benefit realized from share-based award exercises	247		231		206



(in millions, except years)	December 31, 2015
Unrecognized compensation expense related to share awards	$	469
Weighted-average years to recognize compensation expense	1.3

Share-Based Compensation Recognition and Estimates

The principal assumptions the Company used in calculating grant-date fair value for stock options and SARs were as follows:



	For the Years Ended December 31,
	2015	2014	2013
Risk-free interest rate	1.6% - 1.7%	1.7% - 1.8%	1.0% - 1.6%
Expected volatility	22.3% - 24.1%	24.1% - 39.6%	41.0% - 43.0%
Expected dividend yield	1.4% - 1.7%	1.6% - 1.9%	1.4% - 1.6%
Forfeiture rate	5.0%	5.0%	5.0%
Expected life in years	5.5 - 6.1	5.4	5.3

Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock and the implied volatility from exchange-traded options on the Company’s common stock. Expected dividend yields are based on the per share cash dividend paid by the Company. The Company uses historical data to estimate option and SAR exercises and forfeitures within the valuation model. The expected lives of options and SARs granted represents the period of time that the awards granted are expected to be outstanding based on historical exercise patterns.

Other Employee Benefit Plans

The Company also offers a 401(k) plan for its employees. Compensation expense related to this plan was not material for 2015, 2014 and 2013.

In addition, the Company maintains non-qualified, unfunded deferred compensation plans, which allow certain members of senior management and executives to defer portions of their salary or bonus and receive certain Company contributions on such deferrals, subject to plan limitations. The deferrals are recorded within long-term investments with an approximately equal amount in other liabilities in the Consolidated Balance Sheets. The total deferrals are distributable based upon termination of employment or other periods, as elected under each plan and were $553 million and $496 million as of December 31, 2015 and 2014, respectively.