McKesson 2014 Annual Report Download - page 118

McKESSON CORPORATION
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2013 Stock Plan: The 2013 Stock Plan was adopted by the Board of Directors on May 22, 2013 and approved by the Company’s
stockholders on July 31, 2013. The 2013 Stock Plan permits the grant of awards in the form of stock options, stock appreciation
rights, restricted stock (“RS”), restricted stock units (“RSUs”), performance-based restricted stock units (“PeRSUs”), performance
shares and other share-based awards. The number of shares reserved for issuance under the 2013 Stock Plan equals the sum of
(i) 30,000,000 shares, (ii) the number of shares reserved but unissued under the 2005 Stock Plan as of the effective date of the
2013 Stock Plan, and (iii) the number of shares that become available for reuse under the 2005 Stock Plan following the effective
date of the 2013 Stock Plan. For any one share of common stock issued in connection with an RS, RSU, PeRSU, performance
share or other full share award, three and one-half (3.5) 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 option, including in respect of the payment of
applicable taxes, 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 2013 Stock Plan. Shares withheld to satisfy tax obligations relating to the vesting
of a full-share award shall be returned to the reserve of shares available for issuance under the 2013 Stock Plan.
Stock options are granted at no less than fair market value and those options granted under the 2013 Stock Plan generally
have a contractual term of seven years. Options generally become exercisable in four equal annual installments beginning one
year after the grant date. The vesting of RS or RSUs is determined by the Compensation Committee at the time of grant. RS and
RSUs generally vest over four years. PeRSUs vest three years following the end of the performance period.
Non-employee directors may be granted an award on the date of each annual meeting of the stockholders for up to 5,000
RSUs, as determined by the Board. Such non-employee director award is fully vested on the date of the grant.
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 permits the granting of up to 42.5 million shares in the form of stock options,
RS, RSUs, PeRSUs, performance shares and other share-based awards. For any one share of common stock issued in connection
with an RS, RSU, performance share or other full-share 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 option, shares withheld to satisfy
tax obligations relating to the vesting of a full-share 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.
Following the effectiveness of the 2013 Stock Plan, no further shares were made subject to award under the 2005 Stock Plan.
Shares reserved but unissued under the 2005 Stock Plan as of the effective date of the 2013 Stock Plan, and shares that become
available for reuse under the 2005 Stock Plan following the effectiveness of the 2013 Stock Plan, will be available for awards
under the 2013 Stock Plan.
Stock options are granted at no less than fair market value and those options granted under the 2005 Stock Plan generally
have a contractual term of seven years. Prior to 2005, stock options typically had a contractual term of 10 years. Options generally
become exercisable in four equal annual installments beginning one year after the grant date. The vesting of RS or RSUs is
determined by the Compensation Committee at the time of grant. RS and RSUs generally vest over four years. PeRSUs vest
three years following the end of the performance period.
Non-employee directors may be granted an award on the date of each annual meeting of the stockholders for up to 5,000
RSUs, as determined by the Board. Such non-employee director award is fully vested on the date of the grant.
1997 Non-Employee Directors’ Equity Compensation and Deferral Plan: The 1997 Non-Employee Directors’ Equity
Compensation and Deferral Plan was approved by the Company’s stockholders on July 30, 1997; however, stockholder approval
of the 2005 Stock Plan on July 27, 2005 had the effect of terminating the 1997 Non-Employee Directors’ Equity Compensation
and Deferral Plan such that no new awards would be granted under 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 other subsidiaries. As to those employees,
the ESPP does not qualify under Section 423 of the Internal Revenue Code. Currently, 21.1 million shares have been approved
by stockholders for issuance under the ESPP.
The ESPP is implemented through a continuous series of three-month purchase periods (“Purchase Periods”) during which
contributions can be made toward the purchase of common stock under the plan.