Oracle 2005 Annual Report Download - page 88

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2006
7. STOCK-BASED COMPENSATION PLANS
Stock Option Plans
In fiscal 2001, we adopted the 2000 Long-Term Equity Incentive Plan (the 2000 Plan), which replaced the 1991 Long-Term Equity Incentive Plan (the 1991
Plan) and provides for the issuance of non-qualified stock options and incentive stock options, as well as stock purchase rights, stock appreciation rights and
long-term performance awards to our eligible employees, officers, directors, who are also employees or consultants, independent consultants and advisers. In
fiscal 2005, the 2000 Plan was amended and restated to, among other things, eliminate the ability to reprice options without stockholder approval, to provide the
Board with the ability to grant restricted stock units, to permit us to deduct certain performance-based equity awards for tax purposes, to provide the Board with
the ability to issue transferable equity awards and to eliminate the ability to buyout employees’ options with cash or common stock. Under the terms of the 2000
Plan, options to purchase common stock generally are granted at not less than fair market value, become exercisable as established by the Board of Directors
(Board) (generally over four years), and generally expire ten years from the date of grant. Options granted under the 1991 Plan were granted on similar terms. If
options outstanding under the 1991 Plan are forfeited, repurchased, or otherwise terminate without the issuance of stock, the shares underlying such options will
also become available for future awards under the 2000 Plan. As of May 31, 2006, options to purchase 381.4 million shares of common stock were outstanding
under both plans, of which 267.8 million were vested. Approximately 394.6 million shares of common stock are available for future awards under the 2000 Plan.
To date, we have not issued any stock purchase rights, stock appreciation rights, restricted stock units or long-term performance awards under this plan.
In fiscal 1993, the Board adopted the 1993 Directors’ Stock Option Plan (the Original Directors’ Plan), which provided for the issuance of non-qualified stock
options to non-employee directors. In fiscal 2004, the Original Directors’ Plan was amended and restated to eliminate a term limit, eliminate the ability to reprice
options without stockholder approval, decrease the number of shares of common stock reserved for issuance under the Original Directors’ Plan, provide the
Board with the ability to make grants of restricted stock, restricted stock units or other stock-based awards instead of the automatic option grants and rename the
Original Directors’ Plan, the 1993 Directors’ Stock Plan (the Directors’ Plan). Under the terms of the Directors’ Plan, options to purchase 8.0 million shares of
common stock were reserved for issuance, are granted at not less than fair market value, become exercisable over four years, and expire ten years from the date
of grant. The Directors’ Plan provides for automatic, nondiscretionary grants of options to each non-employee director upon first becoming a director and
thereafter on an annual basis, as well as automatic nondiscretionary grants for chairing certain Board committees. The Board has the discretion to replace any
automatic option grant under the Directors’ Plan with awards of restricted stock, restricted stock units or other stock-based award. The number of shares subject
to any such stock award will be no more than the equivalent value of the options, as determined on any reasonable basis by the Board, which would otherwise
have been granted under the applicable automatic option grant. The Board will determine the particular terms of any such stock awards at the time of grant, but
the terms will be consistent with those of options, as described below, granted under the Directors’ Plan with respect to vesting or forfeiture schedules and
treatment on termination of status as a director. At May 31, 2006, options to purchase 4.0 million shares of common stock were outstanding under the 1993
Directors’ Plan, of which 3.2 million were vested. Approximately 2.7 million shares are available for future option awards under this plan; however, no more
than 1.8 million shares may be used for grants other than options.
In connection with certain of our acquisitions, principally PeopleSoft and Siebel, we assumed all of the outstanding stock options of the respective stock plans.
These options generally retain all of the rights, terms and conditions of the respective plans under which options were originally granted. As of May 31, 2006,
options to purchase 88.0 million shares of common stock were outstanding under these plans.
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Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠