Banana Republic 2010 Annual Report Download - page 65

In February 2008, our Board of Directors authorized $1 billion for share repurchases, which was fully utilized by the
end of fiscal 2009. In November 2009, the Board of Directors authorized an additional $500 million for share
repurchases, which was fully utilized by the end of March 2010. In connection with these authorizations, we
entered into purchase agreements with individual members of the Fisher family (related party transactions). The
Fisher family shares were purchased at the same weighted-average market price that we paid for share
repurchases in the open market. During fiscal 2010, 2009, and 2008, approximately 0.5 million, 1.9 million, and
7.2 million shares, respectively, were repurchased for $10 million, $40 million, and $117 million, respectively, from
the Fisher family subject to these agreements.
In February 2010, we announced that the Board of Directors authorized $1 billion for share repurchases, which was
fully utilized by the end of August 2010. In August 2010, we announced that the Board of Directors authorized an
additional $750 million for share repurchases, of which $711 million was utilized through January 29, 2011. In February
2011, we announced that the Board of Directors authorized an additional $2 billion for share repurchases. We have not
entered into purchase agreements with members of the Fisher family in connection with these authorizations.
All of the share repurchases were paid for as of January 29, 2011. As of January 30, 2010, all of the share repurchases
were paid for except $3 million that was payable to Fisher family members.
Note 8. Share-Based Compensation
Share-based compensation expense recognized in the Consolidated Statements of Income, primarily in operating
expenses, is as follows:
Fiscal Year
($ in millions) 2010 2009 2008
Stockunits............................................................................ $59 $51 $39
Stockoptions ......................................................................... 14 9 12
Employeestockpurchaseplan .......................................................... 444
Share-based compensation expense ..................................................... 77 64 55
Less:Incometaxbenefit................................................................ (31) (25) (21)
Share-based compensation expense, net of tax ........................................... $46 $39 $34
No material share-based compensation expense was capitalized in fiscal 2010, 2009, and 2008.
Other than the stock option modification noted below, there were no other material modifications made to our
outstanding stock options and other stock awards in fiscal 2010, 2009, and 2008.
General Description of Stock Option and Other Stock Award Plans
The 1996 Stock Option and Award Plan (the “1996 Plan”) was established on March 26, 1996 and amended and
restated on January 28, 2003. The 1996 Plan was further amended and restated on January 24, 2006 and renamed
the 2006 Long-Term Incentive Plan (the “2006 Plan”). The 2006 Plan was further amended and restated on
August 20, 2008. Under the 2006 Plan, nonqualified stock options and other stock awards are granted to officers,
directors, eligible employees, and consultants at exercise prices or with initial values equal to the fair market value
of the Company’s common stock at the date of grant or as determined by the Compensation and Management
Development Committee of the Board of Directors (the “Committee”). There were 123,341,342 shares authorized for
issuance under the 1996 Plan.
The 2002 Stock Option Plan (the “2002 Plan”) was established on January 1, 1999. On May 9, 2006, the 2002 Plan
was discontinued, and only those awards then outstanding continue to be subject to the terms of the 2002 Plan
under which they were granted. The 2002 Plan empowered the Committee to award nonqualified stock options to
non-officer employees. There were 78,500,000 shares authorized for issuance under the 2002 Plan. Upon
discontinuation of the 2002 Plan, 40,225,653 shares were rolled over to the 2006 Plan. As a number of outstanding
awards from the 2002 Plan have since expired or been forfeited, as of January 29, 2011, there were 13,188,507 shares
available under the 2002 Plan.
58 Gap Inc. Form 10-K