This excerpt taken from the ORCL 8-K filed Mar 2, 2006.
During 2002 the Company issued 200,000 shares of restricted stock to certain of its employees for nominal consideration. The Company recorded deferred compensation of $1.4 million related to this issuance of restricted stock, which is being expensed on a straight-line basis over the five-year vesting period.
On January 31, 2005, the Nominating and Corporate Governance Committee of the Companys Board of Directors approved 2005 compensation for its non-employee directors such that each non-employee director would receive compensation equivalent to the fair value of a stock option to purchase 20,000 shares of the Companys common stock (based on the Black-Scholes option valuation model and the fair market value of the Companys common stock on the date of grant) to be allocated as follows: 50% in cash and 50% in shares of restricted stock that vest in full on January 31, 2006. Accordingly, in the first quarter of 2005 the Company awarded each of its non-employee directors compensation of $32,500 in cash and 3,750 shares of restricted stock (an aggregate of 22,500 shares for all six non-employee directors at that time) that will vest in full on January 31, 2006 in consideration for their service as a director in 2005. The Company recorded deferred compensation of $0.2 million related to this issuance of restricted stock, which is being expensed on a straight-line basis over the one-year vesting period.
In the event an employee or member of the Companys Board of Directors who has been awarded restricted stock discontinues service prior to the expiration of the vesting period, the Company may repurchase any unvested shares of the restricted stock at the lower of (i) the original purchase price of the restricted stock or (ii) the fair value of the Companys common stock. The Companys right to repurchase the shares lapses over the vesting period of the restricted stock. As of December 31, 2004 and 2005, a total of 71,000 and 80,000 shares, respectively, of the Companys restricted common stock remain subject to repurchase by the Company. There were no repurchases of restricted stock during 2004 or 2005.