CVS 2003 Annual Report Download - page 41

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Following is a summary of the stock option activity for the respective years:
2003 2002 2001
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
Shares in thousands SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
Outstanding at beginning of year 23,390 $ 36.42 17,627 $ 39.48 14,647 $ 31.11
Granted 6,401 25.21 8,022 29.89 5,381 59.55
Exercised (707) 20.26 (517) 18.31 (1,084) 23.13
Canceled (2,005) 35.84 (1,742) 41.66 (1,317) 43.14
Outstanding at end of year 27,079 34.22 23,390 36.42 17,627 39.48
Exercisable at end of year 14,870 $ 35.53 8,048 $ 30.21 4,609 $ 25.09
Following is a summary of the stock options outstanding and exercisable as of January 3, 2004:
Shares in thousands OPTIONS OUTSTANDING OPTIONS EXERCISABLE
NUMBER WEIGHTED AVERAGE WEIGHTED AVERAGE NUMBER WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES OUTSTANDING REMAINING LIFE EXERCISE PRICE EXERCISABLE EXERCISE PRICE
$ 1.81 to $ 15.00 248 1.9 $ 13.23 248 $ 13.23
15.01 to 25.00 2,330 2.3 18.93 2,290 18.83
25.01 to 30.00 12,752 8.3 27.69 3,569 29.87
30.01 to 35.00 3,434 6.2 31.90 2,480 31.91
35.01 to 50.00 4,335 4.6 40.64 4,224 40.67
50.01 to 61.23 3,980 6.9 60.44 2,059 60.42
To tal 27,079 6.7 $ 34.22 14,870 $ 35.53
year of approximately $17.5 million. Estimated future
benefit payments for the defined benefit plans and other
postretirement benefit plans, respectively, are $14.8 million
and $1.1 million in 2004, $15.2 and $1.1 million in 2005,
$15.9 million and $1.1 million in 2006, $16.7 and $1.1
million in 2007, $17.7 and $1.1 million in 2008, and $105.9
million and $4.7 million in aggregate for the following five
years. The Company recorded a minimum pension liability
of $59.4 million as of January 3, 2004, and $71.9 million
as of December 28, 2002, as required by SFAS No. 87. A
minimum pension liability is required when the accumulated
benefit obligation exceeds the combined fair value of the
underlying plan assets and accrued pension costs. The
minimum pension liability adjustment is reflected in other
long-term liabilities, long-term deferred income taxes
and accumulated other comprehensive loss, included in
shareholders’ equity, in the consolidated balance sheet.
7—STOCK INCENTIVE PLANS
The 1997 Incentive Compensation Plan provides for the
granting of up to 42.9 million shares of common stock
in the form of stock options and other awards to selected
officers and employees of the Company. All grants under
the plan are awarded at fair market value on the date of
grant. Generally, options become exercisable over a four-
year period from the grant date and expire ten years after
the date of grant. As of January 3, 2004, there were
16.7 million shares available for future grants. The 1997
Incentive Compensation Plan allows for up to 3.6 million
restricted shares to be issued. The Company granted
213,000, 26,000 and 76,000 shares of restricted stock
with a weighted average per share grant date fair value
of $25.26, $31.20 and $59.98, in 2003, 2002 and 2001,
respectively. The fair value of the restricted shares is
expensed over the period during which the restrictions
lapse. Compensation costs for restricted shares totaled
$3.6 million in 2003, $4.3 million in 2002 and
$5.4 million in 2001.
The 1996 Directors Stock Plan provides for the granting of
up to 346,000 shares of common stock to the Company’s
nonemployee directors. The plan allows the nonemployee
directors to elect to receive shares of common stock or
stock options in lieu of cash compensation. As of
January 3, 2004, there were 46,000 shares available
for future grants under the plan.
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