Banana Republic 2005 Annual Report Download - page 58

G A P I N C . F I N A N C I A L S 2 0 0 5
56 gap inc. 2005 annual report
Outstanding options at January 28, 2006 have expiration dates ranging from January 2006 to January 2016.
At January 28, 2006, we reserved 156,465,588 shares of our common stock, including 339,370 treasury shares, for the exercise of stock options.
There were 80,952,385, 80,007,291, and 94,246,540 shares available for granting of options at January 28, 2006, January 29, 2005, and January 31,
2004, respectively. Options for 57,346,127, 39,764,741, and 37,292,786 shares were exercisable as of January 28, 2006, January 29, 2005, and
January 31, 2004, respectively, and had a weighted-average exercise price of $21.27, $22.06, and $22.53, respectively, at those dates.
The following table summarizes additional information about stock options outstanding and exercisable at January 28, 2006:
Employee Stock Purchase Plan
We have an Employee Stock Purchase Plan under which eligible U.S. employees may purchase our common stock at 85 percent of the lower of the
closing price on the New York Stock Exchange on the first or last day of the six-month purchase period. Employees pay for their stock purchases
through payroll deductions at a rate equal to any whole percentage from 1 percent to 15 percent. There were 1,700,466, 1,422,059, and 1,626,393
shares issued under the plan during fiscal 2005, 2004 and 2003, respectively. All shares were issued from treasury stock. At January 28, 2006, there
were 6,901,958 shares reserved for future issuances.
During fiscal 2000, we established an Employee Stock Purchase Plan for employees in the United Kingdom. Under the plan, all eligible employees may
purchase our common stock at the lower of the closing price on the New York Stock Exchange on the first or last day of the six-month purchase
period. We provide a match of one share for every seven shares purchased. Employees pay for their stock purchases through payroll deductions from
£10 to £125 per month, not to exceed the lesser of either £750 per each six-month purchase period or 10 percent of gross annual base salary per tax
year. At January 28, 2006, £1 was equivalent to $1.77. There were 14,136, 16,597, and 23,371 shares issued under the plan during fiscal 2005, 2004
and 2003, respectively. All shares were issued from treasury stock. At January 28, 2006, there were 891,120 shares reserved for future issuances.
NOTE H: EMPLOYEE BENEFIT PLANS
We have a qualified defined contribution retirement plan, called GapShare, which is available to employees who meet certain age and service require-
ments. This plan permits employees to make contributions up to the maximum limits allowable under the Internal Revenue Code. Under the plan,
we match in cash all or a portion of employees’ contributions under a predetermined formula. Our contributions vest immediately. Our contributions
to the retirement plan in fiscal 2005, 2004 and 2003 were approximately $33 million, $31 million and $28 million, respectively.
A nonqualified Executive Deferred Compensation Plan (the “Plan”) established on January 1, 1999, allows eligible employees to defer compensation
up to a maximum amount. We do not match any employees’ contributions under this plan. As of January 28, 2006, the asset and liability relating to
the Plan was approximately $24 million and $30 million, respectively. The asset is classified in other assets and the liability is classified in lease incen-
tives and other liabilities in the Consolidated Balance Sheets. This plan was frozen for additional contributions effective December 31, 2005.
A nonqualified Supplemental Deferred Compensation Plan established on January 1, 2006, replaced the Plan and allows eligible employees and non-
employee members of the Board of Directors to defer compensation up to a maximum amount. We match in cash all or a portion of employees’ con-
tributions under a predetermined formula. We do not match non-employee members of the Board of Directors contributions under the current plan.
Options Outstanding Options Exercisable
Weighted-Average
Range of Number of Shares Remaining Contractual Weighted-Average Number of Shares Weighted-Average
Exercise Prices at January 28, 2006 Life (in years) Exercise Price at January 28, 2006 Exercise Price
$ 2.85 – $5.92 1,056,350 6.08 $ 5.72 1,056,350 $ 5.72
6.56 – 12.87 15,461,188 6.04 12.00 7,529,932 11.45
12.95 – 17.75 15,059,980 6.26 14.96 11,491,531 14.64
17.79 – 20.94 10,850,105 6.57 20.01 5,407,339 20.02
20.95 – 29.41 27,030,795 7.26 22.60 25,336,893 22.65
30.13 – 49.53 6,524,082 3.89 42.46 6,524,082 42.46
$ 2.85 – $49.53 75,982,500 6.41 $ 20.03 57,346,127 $ 21.27