LabCorp 2008 Annual Report Download - page 49

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Notes to Consolidated Financial Statements
(Dollars and shares in millions, except per share data)
Laboratory Corporation of America
Laboratory Corporation of America® Holdings 2008 47
15) Stock Compensation Plans
Stock Incentive Plans
There are currently 23.8 million shares authorized for issuance under the 2008 Stock Incentive
Plan and the 2000 Stock Incentive Plan. Each of these plans was approved by shareholders. At
December 31, 2008, there were 7.8 million additional shares available for grant under the
Company’s stock option plans.
Stock Options
The following table summarizes grants of non-qualified options made by the Company to officers,
key employees, and non-employee directors under all plans. Stock options are generally granted
at an exercise price equal to or greater than the fair market price per share on the date of grant.
Also, for each grant, options vest ratably over a period of three years on the anniversaries of the
grant date, subject to their earlier expiration or termination.
Changes in options outstanding under the plans for the periods indicated were as follows:
Weighted-
Weighted- Average
Average Remaining Aggregate
Number of Exercise Price Contractual Intrinsic
Options per Option Term Value
Outstanding at December 31, 2007 4.7 $ 56.71
Granted 1.8 75.65
Exercised (1.2) 43.41
Cancelled (0.4) 75.68
Outstanding at December 31, 2008 4.9 $ 65.59 7.6 $ 31.7
Vested and expected to vest
at December 31, 2008 4.7 $ 65.06 7.5 $ 31.7
Exercisable at December 31, 2008 2.1 $ 53.06 6.0 $ 29.8
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic
value (the difference between the Company’s closing stock price on the last trading day of
2008 and the exercise price, multiplied by the number of in-the-money options) that would
have been received by the option holders had all option holders exercised their options on
December 31, 2008. The amount of intrinsic value will change based on the fair market value
of the Company’s stock.
Cash received by the Company from option exercises, the actual tax benefit realized for
the tax deductions and the aggregate intrinsic value of options exercised from option exercises
under all share-based payment arrangements during the years ended December 31, 2008,
2007, and 2006 were as follows:
2008 2007 2006
Cash received by the Company $ 53.6 $ 67.4 $ 72.9
Tax benefits realized $ 14.3 $ 25.7 $ 19.0
Aggregate intrinsic value $ 35.5 $ 63.6 $ 48.0