Visa 2015 Annual Report Download - page 125

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
(3) Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include
incremental common stock equivalents, as calculated under the treasury stock method. The
computation includes 6 million, 7 million and 8 million common stock equivalents for fiscal 2015,
2014 and 2013, respectively, because their effect would have been dilutive. The computation
excludes 2 million of common stock equivalents for fiscal 2015, 2014 and 2013 because their effect
would have been anti-dilutive.
(4) The outstanding number of shares of class B and C common stock were not impacted by the stock
split as these stockholders received an adjustment to their respective conversion ratios instead of
stock dividends. See Note 14—Stockholders’ Equity. Weighted-average basic and diluted shares
outstanding for class B and C common stock are calculated based on the common shares
outstanding of each respective class rather than on an as-converted basis.
(5) Participating securities are unvested share-based payment awards that contain non-forfeitable rights
to dividends or dividend equivalents, such as the Company’s restricted stock awards, restricted stock
units and earned performance-based shares.
Note 16—Share-based Compensation
2007 Equity Incentive Compensation Plan
The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the
compensation committee of the board of directors to grant non-qualified stock options (“options”),
restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based shares to its
employees and non-employee directors, for up to 236 million shares of class A common stock. Shares
available for award may be either authorized and unissued or previously issued shares subsequently
acquired by the Company. The EIP will continue to be in effect until all of the common stock available
under the EIP is delivered and all restrictions on those shares have lapsed, unless the EIP is
terminated earlier by the Company’s board of directors. No awards may be granted under the plan on
or after 10 years from its effective date.
Share-based compensation cost is recorded net of estimated forfeitures on a straight-line basis for
awards with service conditions only, and on a graded-vesting basis for awards with service,
performance and market conditions. The Company’s estimated forfeiture rate is based on an
evaluation of historical, actual and trended forfeiture data. For fiscal 2015, 2014 and 2013, the
Company recorded share-based compensation cost of $184 million, $172 million and $179 million,
respectively, in personnel on its consolidated statements of operations. The related tax benefits were
$54 million, $51 million and $53 million for fiscal 2015, 2014 and 2013, respectively. The amount of
capitalized share-based compensation cost was immaterial during fiscal 2015, 2014 and 2013.
All per share amounts and number of shares outstanding presented below reflect the four-for-one
stock split that was effected in the second quarter of fiscal 2015. See Note 14—Stockholders’ Equity.
Options
Options issued under the EIP expire 10 years from the date of grant and primarily vest ratably over
3 years from the date of grant, subject to earlier vesting in full under certain conditions.
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