LabCorp 2009 Annual Report Download - page 56

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54 LABORATORY CORPORATION OF AMERICA
As of December 31, 2009 and 2008, $60.3 and $70.2,
respectively, is the approximate amount of unrecognized
income tax benefits that, if recognized, would favorably affect
the effective income tax rate in any future periods.
The Company has substantially concluded all U.S. federal
income tax matters for years through 2005. Substantially all
material state and local, and foreign income tax matters have
been concluded through 2004 and 2001, respectively.
The Company’s 2006 U.S. federal income tax return is currently
under examination by the Internal Revenue Service. In addition,
the Company has various state income tax examinations ongoing
throughout the year. Management believes adequate provisions
have been recorded related to all open tax years.
The Company provided for taxes on undistributed earnings
of foreign subsidiaries.
14. 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 share-
holders. At December 31, 2009, there were 5.8 million addi-
tional 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 expira-
tion or termination.
Changes in options outstanding under the plans for the
periods indicated were as follows:
Weighted- Weighted-
Average Average
Exercise Remaining Aggregate
Number of Price Contractual Intrinsic
Options per Option Term Value
Outstanding at December 31, 2008 4.9 $ 65.59
Granted 2.1 60.27
Exercised (0.3) 47.00
Cancelled (0.4) 68.71
Outstanding at December 31, 2009 6.3 $ 64.52 7.4 $ 72.7
Vested and expected to vest
at December 31, 2009 6.1 $ 64.49 7.4 $ 69.8
Exercisable at December 31, 2009 3.0 $ 61.57 6.0 $ 44.4
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 2009
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,
2009. 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 aggre-
gate intrinsic value of options exercised from option exercises
under all share-based payment arrangements during the years
ended December 31, 2009, 2008 and 2007 were as follows:
2009 2008 2007
Cash received by the Company $ 14.3 $ 53.6 $ 67.4
Tax benefits realized $ 2.7 $ 14.3 $ 25.7
Aggregate intrinsic value $ 7.0 $ 35.5 $ 63.6
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements