Oracle 2010 Annual Report Download - page 195

EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
(USD $)
12 Months Ended
05/31/2011
EMPLOYEE BENEFIT PLANS 14. EMPLOYEE BENEFIT PLANS
Stock-based Compensation Plans
Stock Option Plans
In fiscal 2001, we adopted the 2000 Long-Term Equity Incentive Plan, which 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, and directors who are also employees or consultants, independent consultants and
advisers. During the second quarter of fiscal 2011, our stockholders, upon the recommendation of our Board of Directors,
approved the adoption of the Amended and Restated 2000 Long-Term Equity Incentive Plan (the 2000 Plan). Upon approval,
the termination date of the 2000 Plan was extended by ten years and the number of authorized shares of stock that may be
issued under the 2000 Plan was increased by 388,313,015 shares. 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
(generally 25% annually over four years under our current practice), and generally expire no more than ten years from the
date of grant. As of May 31, 2011, options to purchase 327 million shares of common stock were outstanding under the 2000
Plan, of which 140 million were vested. As of May 31, 2011, approximately 499 million shares of common stock were
available for future awards under the 2000 Plan. To date, we have not issued any stock purchase rights, stock appreciation
rights, restricted stock-based awards or long-term performance awards under the 2000 Plan.
In fiscal 1993, the Board adopted the 1993 Directors’ Stock Option Plan (the Directors’ Plan), which provides for the issuance
of non-qualified stock options to non-employee directors. The Director’s Plan has from time to time been amended and
restated, most recently in fiscal 2010. Under the terms of the Directors’ Plan, options to purchase 8 million shares of common
stock were reserved for issuance, options are granted at not less than fair market value, become exercisable over four years,
and expire no more than ten years from the date of grant. The Directors’ Plan provides for automatic 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 awards. 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 granted under the Directors’ Plan with respect to vesting or forfeiture schedules and treatment on termination of status
as a director. At May 31, 2011, options to purchase approximately 3 million shares of common stock were outstanding under
the 1993 Directors’ Plan, of which approximately 2 million were vested. As of May 31, 2011, approximately 2 million shares
are available for future option awards under this plan of which a lesser portion than the total may be used for grants other than
options.
In connection with certain of our acquisitions, including Sun and others, we assumed all of the outstanding stock options and
other stock awards of each acquiree’s respective stock plans. These stock options and other stock awards generally retain all
of the rights, terms and conditions of the respective plans under which they were originally granted. As of May 31, 2011,
options to purchase 24 million shares of common stock and 2 million shares of restricted stock were outstanding under these
plans.
The following table summarizes stock option activity for our last three fiscal years ended May 31, 2011:
Options Outstanding
(in millions, except exercise price) Shares Under
Option
Weighted
Average
Exercise Price
Balance, May 31, 2008 378 $ 16.37
Granted 69 $ 20.53
Assumed 1 $ 6.54
Exercised (76 ) $ 9.31
Canceled (13 ) $ 25.14
Balance, May 31, 2009 359 $ 18.32
Granted 72 $ 21.23
Assumed 23 $ 55.77
Exercised (60 ) $ 14.03
Canceled (42 ) $ 43.93
Balance, May 31, 2010 352 $ 18.84
Granted 110 $ 22.58
Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠