McKesson 2008 Annual Report Download - page 23

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McKESSON CORPORATION
16
The following table sets forth information as of March 31, 2008 with respect to the plans under which the
Company’ s common stock is authorized for issuance:
Plan Category
(In millions, except per share amounts)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
the first column )
Equity compensation plans approved by
security holders(1) 16.5 $ 55.25 21.4(2)
Equity compensation plans not approved by
security holders(3),(4) 9.5 36.11 -
(1) Includes shares available for purchase under the 2000 Employee Stock Purchase Plan (“ESPP”). Also includes options
outstanding under the 1994 Stock Option and Restricted Stock Plan, which expired October 2004, the 2005 Stock Plan, and
the 1997 Non-Employee Directors’ Equity Compensation and Deferral Plan, which was replaced by the 2005 Stock Plan,
following its approval by the stockholders on July 27, 2005.
(2) Includes 5,565,419 shares available for purchase under the ESPP and 15,857,925 shares available for grant under the 2005
Stock Plan as of March 31, 2008.
(3) Includes options that remain outstanding under the terminated broad-based 1999 Stock Option and Restricted Stock Plan,
the 1998 Canadian Stock Incentive Plan, and two stock option plans, all of which were replaced by the 2005 Stock Plan
following its approval by the stockholders on July 27, 2005.
(4) As a result of acquisitions, the Company currently has five assumed option plans under which options are exercisable for
360,242 shares of Company common stock. No further awards will be made under any of the assumed plans and
information regarding the assumed options is not included in the table above.
The following are descriptions of equity plans that have been approved by the Company’ s stockholders. The
plans are administered by the Compensation Committee of the Board of Directors, except for the portion of the 2005
Stock Plan related to Non-Employee Directors, which is administered by the Committee on Directors and Corporate
Governance.
2005 Stock Plan: The 2005 Stock Plan was adopted by the Board of Directors on May 25, 2005 and approved
by the Company’ s stockholders on July 27, 2005. The 2005 Stock Plan initially provided for the grant of up to 13
million shares in the form of nonqualified stock options, incentive stock options, stock appreciation rights, restricted
stock awards, restricted stock unit awards, performance shares and other share-based awards. The 2005 Stock Plan
was subsequently amended by the Board of Directors on May 23, 2007 to increase the common stock reserved for
issuance by 15 million shares, which was approved by stockholders on July 25, 2007. For any one share of common
stock issued in connection with a stock-settled stock appreciation right, restricted stock award, restricted stock unit
award, performance share or other share-based award, two shares shall be deducted from the shares available for
future grants. Shares of common stock not issued or delivered as a result of the net exercise of a stock appreciation
right or option, shares used to pay the withholding taxes related to a stock award, or shares repurchased on the open
market with proceeds from the exercise of options shall not be returned to the reserve of shares available for
issuance under the 2005 Stock Plan.
Options are granted at not less than fair market value and have a term of seven years. Options generally
become exercisable in four equal annual installments beginning one year after the grant date, or after four years from
the date of grant. The award or vesting of restricted stock, restricted stock units (“RSUs”) or performance based
RSUs may be conditioned upon the attainment of one or more performance objectives. Vesting of such awards is
generally a three year cliff.
Non-employee directors receive an annual grant of up to 5,000 RSUs, which vest immediately; however,
payment of any shares is delayed until the director is no longer performing services for the Company. The 2005
Stock Plan replaced the 1997 Non-Employee Directors Equity Compensation and Deferral Plan.
2000 Employee Stock Purchase Plan (the “ESPP”): The ESPP is intended to qualify as an “employee stock
purchase plan” within the meaning of Section 423 of the Internal Revenue Code. In March 2002, the Board
amended the ESPP to allow for participation in the plan by employees of certain of the Company’ s international and
certain other subsidiaries. As to those employees, the ESPP does not so qualify under Section 423 of the Internal
Revenue Code. Currently, 16.1 million shares have been approved by stockholders for issuance under the ESPP.