Cisco 2004 Annual Report Download - page 56

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Basic and diluted shares outstanding for the year ended July 31, 2004 were 6.8 billion shares and 7.1 billion shares, respectively.
Diluted shares outstanding include the dilutive impact of in-the-money options, which is calculated based on the average share price
for each fiscal period using the treasury stock method. Under the treasury stock method, the tax-effected proceeds that would be
hypothetically received from the exercise of all in-the-money options are assumed to be used to repurchase shares. In fiscal 2004, the
dilutive impact of in-the-money employee stock options was approximately 209 million shares or 3.1% of the basic shares outstanding
based on Cisco’s average share price of $22.39.
The following table summarizes the options granted to the Named Executive Officers during the periods indicated. The Named
Executive Officers represent the Company’s Chief Executive Officer and the four other most highly paid executive officers whose salary
and bonus for the fiscal year ended July 31, 2004 and July 26, 2003 were in excess of $100,000.
Years Ended July 31, 2004 July 26, 2003
Options granted to the Named Executive Officers 2 million 6 million
Options granted to the Named Executive Officers as a % of net options granted 1.6% 4.2%
Options granted to the Named Executive Officers as a % of outstanding shares 0.03% 0.09%
Cumulative options held by Named Executive Officers as a % of total options outstanding 4.0% 4.6%
General Option Information A summary of option activity follows (in millions, except per-share amounts). The Company has, in connection
with the acquisitions of various companies, assumed the stock option plans of the acquired companies or issued replacement options.
OPTIONS OUTSTANDING
Weighted-
Options Average
Available Number Exercise Price
for Grant Outstanding per Share
BALANCE AT JULY 28, 2001 522 1,060 $ 29.41
Granted and assumed (282) 282 17.72
Exercised — (54) 6.99
Canceled 82 (82) 36.94
Additional shares reserved 342 ——
BALANCE AT JULY 27, 2002 664 1,206 27.17
Granted and assumed (199) 199 12.01
Exercised — (45) 7.14
Canceled 57 (57) 33.03
Additional shares reserved 4——
BALANCE AT JULY 26, 2003 526 1,303 25.29
Granted and assumed (195) 195 20.00
Exercised — (96) 10.03
Canceled 52 (52) 32.33
Additional shares reserved 7 — —
BALANCE AT JULY 31, 2004 390 1,350 $ 25.34
2004 ANNUAL REPORT 59