CVS 2000 Annual Report Download - page 32

Stock Incentive Plans
As of December 30, 2000, the Company had the
following stock incentive plans:
1997 Incentive Compensation Plan
The 1997 Incentive Compensation Plan (the “1997 ICP”) provides
for the granting of up to 23,382,245 shares of common stock in
the form of stock options, stock appreciation rights, restricted
shares, deferred shares and performance-based awards to
selected officers, employees and directors of the Company. All
grants under the 1997 ICP are awarded at fair market value on
the date of grant.The right to exercise or receive these awards
generally commences between one and five years from the date
of the grant and expires not more than ten years after the date
of the grant, provided that the holder continues to be employed
by the Company. As of December 30, 2000, there were 11,930,278
shares available for future grants under the 1997 ICP.
Restricted shares issued under the 1997 ICP may not exceed
3.6 million shares. In 2000, 1999 and 1998, 952,251, 59,908 and
155,400 shares of restricted stock were granted at a weighted
average grant date fair value of $30.58, $51.26 and $37.80,
respectively. Participants are entitled to vote and receive
dividends on their restricted shares, although they are subject
to certain transfer restrictions. Compensation costs, which are
recognized over the restricted period, totaled $5.9 million in
2000, $2.3 million in 1999 and $3.1 million in 1998.
The 1996 Directors Stock Plan
The 1996 Directors Stock Plan (the “1996 DSP”) provides for
the granting of up to 346,460 shares of common stock to the
Company’s nonemployee directors (the “Eligible Directors”).The
1996 DSP allows the Eligible Directors to elect to receive shares
of common stock in lieu of cash compensation. Eligible Directors
may also elect to defer compensation payable in common stock
until their service as a director concludes. As of December 30,
2000, there were 230,416 shares available for future grant under
the 1996 DSP.
Notes to Consolidated Financial Statements
30
CVS Corporation
5
Following is a summary of the stock option activity for the respective years:
2000 1999 1998
Weighted Average Weighted Average Weighted Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
Outstanding at beginning of year 12,964,600 $ 27.38 11,982,122 $ 23.31 16,070,146 $ 16.95
Granted(1) 6,964,015 33.84 2,175,342 48.02 3,119,410 37.16
Exercised (3,510,785) 19.55 (927,080) 18.87 (7,137,027) 15.01
Canceled (1,770,840) 37.37 (265,784) 37.65 (70,407) 26.48
Outstanding at end of year 14,646,990 31.11 12,964,600 27.38 11,982,122 23.31
Exercisable at end of year 4,048,842 $ 18.85 6,065,351 $ 17.92 6,127,402 $ 17.16
(1) During 2000, the Company granted 5.1 million stock options to substantially all full-time pharmacists and store managers.
Following is a summary of the stock options outstanding and exercisable as of December 30, 2000:
Options Outstanding Options Exercisable
Range of Number Weighted Average Weighted Average Number Weighted Average
Exercise Prices Outstanding Remaining Life Exercise Price Exercisable Exercise Price
Under $15 398,062 4.2 $ 11.84 386,920 $ 12.13
$15.01 to $20.00 2,631,166 3.9 16.65 2,631,166 16.65
20.01 to 25.00 1,355,267 5.5 22.80 710,526 22.60
25.01 to 40.00 8,586,392 8.6 34.43 304,831 36.44
40.01 to 51.56 1,676,103 7.7 48.13 15,399 42.52
Total 14,646,990 7.2 $ 31.11 4,048,842 $ 18.85