Saks Fifth Avenue 2008 Annual Report Download - page 86

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
paid on May 1, 2006 to shareholders of record as of April 14, 2006. The remaining portion of the dividend
payable will be paid prospectively as, and to the extent, awards of restricted stock vest.
As a result of the May 1, 2006 $4.00 per common share dividend payment, the Human Resources and
Compensation Committee of the Company’s Board of Directors exercised its discretion under anti-dilution
provisions of the Company’s long-term incentive plan to adjust the exercise price and number of stock options to
reflect the change in the share price on the May 2, 2006 ex-dividend date. In accordance with the provisions of
SFAS No. 123R, the discretionary nature of the anti-dilution provisions resulted in a modification of the options.
Accordingly, the measurement of the fair value of the options before and after the ex-dividend date was required
resulting in a pre-tax non-cash charge of $19,600.
The effect of this anti-dilution adjustment is presented below:
As of the ex-dividend date
Prior to
Adjustment
After
Adjustment
Options outstanding .................................... 7,148 8,845
Options exercisable ..................................... 6,870 8,501
Weighted average exercise price:
Options outstanding ................................ $16.58 $13.40
Options exercisable ................................. $16.82 $13.59
On December 8, 2005, the Company announced that in anticipation of the closing of the NDSG transaction,
its Board of Directors had approved a 35,000 share increase in its common share repurchase authorization,
bringing the total number of authorized shares to 70,025. During 2008, 2007 and 2006, the Company repurchased
2,949, 1,722, and 450 shares for an aggregate amount of $34,899, $27,464, and $6,531, respectively. There were
32,709 shares available for repurchase under the share repurchase program at January 31, 2009.
Each outstanding share of the Company’s common stock has one preferred stock purchase right attached.
The rights generally become exercisable ten days after an outside party acquires, or makes an offer for, 20% or
more of the common stock. Each right entitles its holder to purchase 1/100 share of Series C Junior Preferred
Stock for $50 once the rights become exercisable. The rights expire in November 2018. Once exercisable, if the
Company is involved in a merger or other business combination or an outside party acquires 20% or more of the
common stock, each right will be modified to entitle its holder (other than the acquirer) to purchase common
stock of the acquiring company or, in certain circumstances, common stock having a market value of twice the
exercise price of the right.
NOTE 10 — EMPLOYEE STOCK PLANS
The Company maintains an equity incentive plan for the granting of options, stock appreciation rights,
performance shares, restricted stock and other forms of equity awards to employees and directors. At January 31,
2009 and February 2, 2008, the Company had available for grant 16,061 and 16,549 shares of common stock,
respectively. Options granted generally vest over a four-year period after grant and have an exercise term of
seven to ten years from the grant date. Restricted stock and performance shares generally vest one to three years
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