NOTE 11    STOCKHOLDERS' EQUITY

Shares of common stock outstanding are as follows:

As discussed in Note 13 - Employee Stock and Savings Plans, 344.6 million options were transferred to JPMorgan Chase Bank (JPMorgan) under the stock option transfer program. The options transferred to JPMorgan were amended and restated upon transfer to contain terms and conditions typical of equity option transactions entered into between sophisticated financial counterparties at arm's length using standard terms and definitions for equity derivatives. As of June 30, 2004, the options have strike prices ranging from $33.03 to $101.25 per share and have expiration dates between December 2005 and December 2006.

Our board of directors has approved a program to repurchase shares of our common stock to reduce the dilutive effect of our stock option and stock purchase plans. A total of 618 million shares have been repurchased on open market transactions over the last three fiscal years for approximately $16.2 billion. We repurchased 256 million shares for $6.9 billion, 238 million shares for $5.9 billion, and 124 million shares for $3.4 billion in fiscal 2002, 2003, and 2004, respectively. Additionally, in 2002, we acquired 10.2 million of our shares as a result of a structured stock repurchase transaction entered into in 2001, which gave us the right to acquire such shares in exchange for an up-front net payment of $264 million. In any period, cash used in financing activities related to common stock repurchased may differ from the comparable change in Stockholders' Equity, reflecting timing differences between the recognition of share repurchase transactions and their settlement for cash.

On January 16 and September 12, 2003, our board of directors declared annual dividends on our common stock of $0.08 and $0.16 per share, respectively. The dividends were paid on March 7 and November 7, 2003, respectively, to shareholders of record at the close of business on February 21, and October 17, 2003.