Target 2009 Annual Report Download - page 66

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24. Share Repurchase
In November 2007, our Board of Directors approved a share repurchase program totaling $10 billion that
replaced a prior program. In November 2008, we announced that, in light of our business outlook, we were
temporarily suspending our open-market share repurchase program. In January 2010, we resumed
open-market purchases of shares under this program.
Share repurchases for the last three years, repurchased primarily through open market transactions,
were as follows:
Share Repurchases Total Number of Average Price
(millions, except per share data) Shares Purchased Paid per Share Total Investment
2007 – Under a prior program 19.7 $60.72 $1,197
2007 – Under the 2007 program 26.5 54.64 1,445
2008 67.2 50.49 3,395
2009 9.9 48.54 479
Total 123.3 $52.85 $6,516
Of the shares reacquired and included above, a portion was delivered upon settlement of prepaid forward
contracts. The prepaid forward contracts settled in 2009 had a total cash investment of $56 million and an
aggregate market value of $60 million at their respective settlement dates. The prepaid forward contracts
settled in 2008 had a total cash investment of $249 million and an aggregate market value of $251 million at
their respective settlement dates. The prepaid forward contracts settled in 2007 had a total cash investment of
$165 million and an aggregate market value of $215 million at their respective settlement dates. These
contracts are among the investment vehicles used to reduce our economic exposure related to our
nonqualified deferred compensation plans. The details of our positions in prepaid forward contracts have
been provided in Note 26.
Our share repurchases during 2008 included 30 million shares that were acquired through the exercise of
call options.
Call Option Repurchase Details Number of (amounts per share)
Options Exercise Total Cost
Series Exercised Date Premium (a) Strike Price Total (millions)
Series I 10,000,000 April 2008 $ 11.04 $40.32 $51.36 $ 514
Series II 10,000,000 May 2008 10.87 39.31 50.18 502
Series III 10,000,000 June 2008 11.20 39.40 50.60 506
Total 30,000,000 $11.04 $39.68 $50.71 $1,522
(a) Paid in January 2008.
25. Share-Based Compensation
We maintain a long-term incentive plan for key team members and nonemployee members of our Board
of Directors. Our long-term incentive plan allows us to grant equity-based compensation awards, including
stock options, stock appreciation rights, performance share unit awards, restricted stock unit awards,
restricted stock awards or a combination of awards.
A majority of granted awards are nonqualified stock options that vest annually in equal amounts over a
four-year period and expire no later than 10 years after the grant date. Options granted to the nonemployee
members of our Board of Directors become exercisable after one year and have a 10-year term.
We have issued performance share unit awards annually since January 2003. These awards represent
shares potentially issuable in the future; historically, awards have been issued based upon the attainment of
compound annual growth rates in revenue and EPS over a three year performance period. Beginning with the
March 2009 grant, issuance is based upon the attainment of compound annual EPS growth rate and domestic
market share change relative to a retail peer group over a three-year performance period.
We regularly issue restricted stock units with three-year cliff vesting to select team members. We also
regularly issue restricted stock units to our Board of Directors. The number of unissued common shares
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PART II