The Gap 2008 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2008 The Gap annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 94

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94

A summary of stock option activity under the 2006 Plan and 2002 Plan for fiscal 2008 is as follows:
Shares
Weighted-
Average
Exercise
Price
Balance at February 2, 2008 ......................................................... 40,226,298 $21.03
Granted ........................................................................... 4,346,868 $19.47
Exercised.......................................................................... (4,040,223) $15.35
Forfeited/Canceled/Expired ......................................................... (5,811,601) $22.88
Balance at January 31, 2009 ......................................................... 34,721,342 $21.18
A summary of additional information about stock options is as follows:
Fiscal Year
2008 2007 2006
Weighted-average fair value per share of stock options granted ......................... $5.99 $4.99 $5.07
Aggregate intrinsic value of stock options exercised (in millions) ........................ $19 $32 $87
Fair value of stock options vested (in millions) ......................................... $17 $30 $47
Information about stock options outstanding, vested or expected to vest, and exercisable at January 31, 2009, is
as follows:
Options Outstanding Options Exercisable
Range of Exercise Prices
Number of
Shares at
January 31, 2009
Weighted-
Average
Remaining
Contractual
Life (in Years)
Weighted-
Average
Exercise Price
Number of
Shares at
January 31, 2009
Weighted-
Average
Exercise Price
$ 2.85 - $16.01 ........................ 6,063,537 3.43 $13.65 5,963,537 $13.64
$16.17 - $18.26 ........................ 5,883,291 7.07 $17.27 2,609,806 $17.55
$18.29 - $19.68 ........................ 6,342,135 8.18 $19.36 962,215 $19.25
$19.70 - $21.55 ........................ 7,703,812 4.99 $21.22 7,360,585 $21.25
$21.60 - $30.66 ........................ 5,788,352 3.14 $23.92 5,788,352 $23.92
$31.48 - $47.50 ........................ 2,940,215 0.72 $42.93 2,940,215 $42.93
34,721,342 5.26 $21.18 25,624,710 $22.12
Vested or expected to vest at January 31,
2009 ................................ 29,756,612 4.71 $21.63
The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable at
January 31, 2009 was $0.5 million, $0.5 million, and $0.5 million, respectively. Options exercisable at January 31,
2009 had a weighted-average remaining contractual life of 4.09 years.
Compensation Cost for Stock Units
Under the 2006 Plan, units are granted to employees and members of the Board of Directors whereby one share of
common stock is issued for each unit as the unit vests (“Stock Units”). Vesting is based on continued service by the
employee and is immediate in the case of members of the Board of Directors. In some cases, vesting is subject to
the attainment of a pre-determined financial target (“Performance Shares”).
In accordance with SFAS 123(R), we recognize the estimated share-based compensation cost of Stock Units net of
estimated forfeitures. Prior to the adoption of SFAS 123(R), we recognized share-based compensation expense
related to Stock Units based on actual forfeitures. As such, we evaluated the need to record a cumulative effect
adjustment for estimated forfeitures upon the adoption of SFAS 123(R). Because the adjustment was not material,
it was recognized as a credit to operating expenses in the first quarter of fiscal 2006.
56 Gap Inc. Form 10-K