Oracle 2015 Annual Report Download - page 78

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Table of Contents
We recognize that restricted stock-based awards and stock options dilute existing stockholders and have sought to control the number of stock-based awards
granted while providing competitive compensation packages. Consistent with these dual goals, our cumulative potential dilution since June 1, 2013 has been a
weighted-average annualized rate of 1.6% per year. The potential dilution percentage is calculated as the average annualized new restricted stock-based awards or
stock options granted and assumed, net of restricted stock-based awards and stock options forfeited by employees leaving the company, divided by the weighted-
average outstanding shares during the calculation period. This maximum potential dilution will only result if all restricted stock-based awards vest and stock
options are exercised. Of the outstanding stock options at May 31, 2016, which generally have a ten-year exercise period, 13.3% have exercise prices higher than
the market price of our common stock on such date. In recent years, our stock repurchase program has more than offset the dilutive effect of our stock-based
compensation program; however, we may reduce the level of our stock repurchases in the future, as we may use our available cash for acquisitions, to pay
dividends, to repay or repurchase indebtedness or for other purposes. At May 31, 2016, the maximum potential dilution from all outstanding restricted stock-based
awards and unexercised stock options, regardless of when granted and regardless of whether vested or unvested and including stock options where the strike price
is higher than the market price as of such date, was 10.3%.
The Compensation Committee of the Board of Directors reviews and approves the organization-wide stock-based award grants to selected employees, all stock-
based award grants to executive officers and any individual grant of stock-based awards in excess of 100,000 stock option equivalent shares. A separate Plan
Committee, which is an executive officer committee, approves individual stock-based award grants of up to 100,000 stock option equivalent shares to non-
executive officers and employees. Restricted stock-based award and stock option activity from June 1, 2013 through May 31, 2016 is summarized as follows
(shares in millions):
Restricted stock-based awards and stock options outstanding at May 31, 2013 448
Restricted stock-based awards and stock options granted 252
Restricted stock-based awards and stock options assumed 12
Restricted stock-based awards vested and stock options exercised (226)
Forfeitures, cancellations and other, net (59)
Restricted stock-based awards and stock options outstanding at May 31, 2016 427
Weighted-average annualized restricted stock-based awards and stock options granted and assumed, net of forfeitures and cancellations 68
Weighted-average annualized stock repurchases (249)
Shares outstanding at May 31, 2016 4,131
Basic weighted-average shares outstanding from June 1, 2013 through May 31, 2016 4,384
Restricted stock-based awards and stock options outstanding as a percent of shares outstanding at May 31, 2016 10.3%
Total restricted stock-based awards and in the money stock options outstanding (based on the closing price of our common stock on the last trading day
of fiscal 2016) as a percent of shares outstanding at May 31, 2016 9.1%
Weighted-average annualized restricted stock-based awards and stock options granted and assumed, net of forfeitures and cancellations and before
stock repurchases, as a percent of weighted-average shares outstanding from June 1, 2013 through May 31, 2016 1.6%
Weighted-average annualized restricted stock-based awards and stock options granted and assumed, net of forfeitures and cancellations and after stock
repurchases, as a percent of weighted-average shares outstanding from June 1, 2013 through May 31, 2016 -4.1%
Our Compensation Committee approves the annual organization-wide stock-based award grants to certain employees. These annual stock-based award grants are
generally made during the ten business day period following the second trading day after the announcement of our fiscal fourth quarter earnings report.
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