McKesson 2006 Annual Report Download - page 90

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
In 2005, the Board renewed the common stock rights plan. Under the renewal of the plan, effective October 22, 2004, the Board declared a
dividend distribution of one right (a “Right”) for each outstanding share of Company common stock. Each Right entitles the holder to purchase,
upon the occurrence of certain triggering events, a unit consisting of one one-hundredth of a share of Series A Junior Participating Preferred
Stock. Triggering events include, without limitation, the acquisition by another entity of 15% or more of the Company’s common stock without
the prior approval of the Board. The Rights have certain anti-takeover effects that will cause substantial dilution to the ownership interest of a
person or group that attempts to acquire the Company on terms not approved by the Board. The new Rights will expire in 2014, unless the date
is extended or the Rights are redeemed or exchanged earlier by the Board.
In 2005, our stockholders approved a new stock plan (the “2005 Stock Plan”) which allows for the grant of options, restricted stock,
restricted stock units, stock appreciation rights, performances shares and other share-based awards to employees, officers and directors of the
Company. The 2005 Stock Plan replaced several other plans (the “Legacy Plans”) and the remaining 11 million shares available for issuance
under the Legacy Plans were cancelled, although awards under those plans remain outstanding. Under the 2005 Stock Plan, 13 million new
shares were authorized for issuance, and as of March 31, 2006, 8 million shares remain available for grant. As a result of acquisitions, we also
have 14 other option plans under which no further awards have been made since the date of acquisition.
The following is a summary of options outstanding at March 31, 2006:
Expiration dates range from April 2006 to June 2015.
The following is a summary of changes in the options for the stock option plans:
85
Options Outstanding Options Exercisable
Number of Weighted- Number of
Options Average Weighted- Options
Outstanding At Remaining Average Exercisable at Weighted-
Ran
g
e of Exercise Year End Contractual Exercise Year End Avera
g
e
Prices (In millions) Life (Years) Price (In millions) Exercise Price
$13.68 - $27.35 2 4 $21.35 2 $21.05
$27.36 - $41.02 28 5 33.16 27 33.18
$41.03 - $54.70 6 5 45.94 6 45.91
$54.71 - $68.37 1 2 58.15 1 58.15
$68.38 - $82.04 8 3 72.89 8 72.89
$82.05 - $95.72 1 2 90.74 1 90.74
46 543.38 45 43.53
2006 2005 2004
Weighted- Weighted-
Average Average Weighted-
(In millions, except Exercise Exercise Average
p
er share amounts) Shares Price Shares Price Shares Exercise Price
Outstanding at beginning of year 59 $40.37 65 $40.76 64 $40.36
Granted 5 44.93 6 34.67 7 33.77
Exercised (17) 31.15 (7)25.42 (3)19.92
Canceled (1) 69.40 (5) 59.57 (3) 35.68
Outstanding at end of year 46 43.38 59 40.37 65 40.77