Note 16-Employee Stock and Savings Plans

 

Employee Stock Purchase Plan

 

We have an employee stock purchase plan for all eligible employees. Under the plan, shares of our common stock may be purchased at six-month intervals at 85% of the lower of the fair market value on the first or the last day of each six-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. During 2001, 2002, and 2003 employees purchased 11.4 million, 10.8 million shares and 15.2 million shares at average prices of $18.43, $25.26, and $22.56 per share. At June 30, 2003, 192.2 million shares were reserved for future issuance.

 

Savings Plan

 

We have a savings plan, which qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 25% of their pretax salary, but not more than statutory limits. We contribute fifty cents for each dollar a participant contributes, with a maximum contribution of 3% of a participant's earnings. Matching contributions were $63 million, $77 million, and $88 million in 2001, 2002, and 2003.

 

Stock Option and Stock Plans

 

We have a stock option plan for directors and a stock plan for officers, and employees, which provide for nonqualified and incentive stock options and in the case of the stock plan, stock awards. Options granted prior to 1995 generally vest over four and one-half years and expire ten years from the date of grant. Options granted between 1995 and 2001 generally vest over four and one-half years and expire seven years from the date of grant, while certain options vest either over four and one-half years or over seven and one-half years and expire ten years from the date of grant. Options granted during and after 2002 vest over four and one-half years and expire ten years from the date of grant. We have issued stock awards under the plan for officers and employees whereby employees earn actual shares of stock. In fiscal 2003, the company granted 4 million stock awards, which vest over five years.

At June 30, 2003, stock options for 774 million shares were vested and 866 million shares were available for future grants under the plans.

 

Stock options outstanding were as follows:

 

(In millions, except earnings per share)
			Price per Share
	Shares		Range		Weighted Average
Balance, June 30, 2000	1,664		$  0.28 - $59.57		$ 20.62
Granted	448		20.75 -   40.00		30.42
Exercised	(246)		0.30 -   42.91		5.57
Canceled	(70)		6.92 -   59.57		31.79
Balance, June 30, 2001	1,796		0.28 -   59.57		24.77
Granted	82		24.31 -   36.29		31.25
Exercised	(198)		0.51 -   34.91		6.41
Canceled	(76)		0.58 -   58.28		34.34
Balance, June 30, 2002	1,604		0.40 -   59.57		26.88
Granted	254		21.42 -   29.12		24.27
Exercised	(234)		0.51 -   28.22		6.89
Canceled	(75)		2.13 -   59.56		34.33
Balance, June 30, 2003	1,549		0.40 -   59.56		29.30

 

For various price ranges, weighted average characteristics of outstanding stock options at June 30, 2003 were as follows: