Banana Republic 2008 Annual Report Download - page 66

Note 9. Common Stock
Common and Preferred Stock
The Board of Directors is authorized to issue 60 million shares of Class B common stock, which is convertible into
shares of common stock on a share-for-share basis. Transfer of the shares is restricted. In addition, the holders of
the Class B common stock have six votes per share on most matters and are entitled to a lower cash dividend. No
Class B shares have been issued as of January 31, 2009.
The Board of Directors is authorized to issue 30 million shares of one or more series of preferred stock, par value of
$0.05 per share, and to establish at the time of issuance the issue price, dividend rate, redemption price, liquidation
value, conversion features, and such other terms and conditions of each series (including voting rights) as the
Board of Directors deems appropriate, without further action on the part of the stockholders. No preferred shares
have been issued as of January 31, 2009.
Share Repurchases
Share repurchases are as follows:
Fiscal Year
($ and S hares in millions except average per S hare C ost) 2008 2007 2006
Number of shares repurchased ................................................... 46 89 58
Totalcost ...................................................................... $ 745 $1,700 $1,050
Average per share cost including commissions ..................................... $16.36 $19.05 $17.97
In fiscal 2006, the Board of Directors authorized share repurchases of $1.3 billion, which were fully utilized in fiscal
2006 and 2007. In August 2007, the Board of Directors authorized $1.5 billion for share repurchases which was fully
utilized in fiscal 2007. In February 2008, the Board of Directors authorized $1 billion for additional share
repurchases, of which $745 million was utilized through January 31, 2009. In connection with the fiscal 2007 and
2008 authorizations, we also entered into purchase agreements with individual members of the Fisher family. The
Fisher family shares are purchased (related party transactions) at the same weighted average market price that we
pay for share repurchases in the open market. The purchase agreements may be terminated upon 15 business days
notice by the Company or individual Fisher family members. During fiscal 2008 and 2007, approximately 7 million
and 13 million shares, respectively, were repurchased for $117 million and $249 million, respectively, from the Fisher
family subject to these agreements. In total, we expect that approximately $158 million, or 16%, of the $1 billion
share repurchase authorization will be purchased from the Fisher family under these agreements.
All except $40 million of total share repurchases were paid for as of January 31, 2009. Of the $40 million accrual,
$21 million was payable to Fisher family members as of January 31, 2009.
Note 10. Share-Based Compensation
Total share-based compensation expense recognized in the Consolidated Statements of Earnings, primarily in
operating expenses, is as follows:
Fiscal Year
($ in millions) 2008 2007 2006
Stockoptions ................................................................... $12 $14 $29
Stockunits ..................................................................... 39 34 13
Employeestockpurchaseplan ................................................... 446
Share-based compensation expense .............................................. 55 52 48
Less:Incometaxbenefit ......................................................... (21) (20) (21)
Share-based compensation expense recognized in net earnings, net of tax ........... $34 $32 $27
No share-based compensation expense was capitalized in fiscal 2008, 2007, and 2006.
54 Gap Inc. Form 10-K