The Gap 2009 Annual Report Download - page 73

authorized $1 billion for additional share repurchases, which was fully utilized by the end of fiscal 2009. In November
2009, the Board of Directors authorized an additional $500 million share repurchase program, of which $255 million
was utilized through January 30, 2010. This authorization was fully utilized in March 2010. In connection with the
fiscal 2007, 2008, and 2009 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. The purchase agreements were terminable upon
15 business days notice by the Company or individual Fisher family members. During fiscal 2009, 2008, and 2007,
approximately 2 million, 7 million, and 13 million shares, respectively, were repurchased for $40 million, $117 million,
and $249 million, respectively, from the Fisher family subject to these agreements.
All of the share repurchases were paid for as of January 30, 2010 except $3 million that was payable to Fisher family
members. As of January 31, 2009, all except $40 million of total share repurchases were paid for, of which
$21 million was payable to Fisher family members.
In February 2010, we announced that our Board of Directors authorized $1 billion for additional share repurchases.
We have not entered into purchase agreements with members of the Fisher family in connection with this
authorization.
Note 10. Share-Based Compensation
Total share-based compensation expense recognized in the Consolidated Statements of Income, primarily in
operating expenses, is as follows:
Fiscal Year
($ in millions) 2009 2008 2007
Stockunits ..................................................................... $51 $39 $34
Stockoptions ................................................................... 91214
Employeestockpurchaseplan ................................................... 444
Share-based compensation expense .............................................. 64 55 52
Less:Incometaxbenefit ......................................................... (25) (21) (20)
Share-based compensation expense, net of tax .................................... $39 $34 $32
No material share-based compensation expense was capitalized in fiscal 2009, 2008, and 2007.
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 2009, 2008, and 2007.
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”).
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.
As of January 30, 2010, we had 115,567,431 shares of our common stock available for future issuance for our stock
option and other stock award plans. Stock options generally expire 10 years from the grant date, three months
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