The Gap 2011 Annual Report Download - page 75

In February 2008 and November 2009, the Board of Directors authorized a total of $1.5 billion for share
repurchases, which was fully utilized by the end of March 2010. In connection with these 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. During fiscal 2010 and 2009, approximately 0.5 million and 1.9 million shares,
respectively, were repurchased for $10 million and $40 million, respectively, from the Fisher family subject to these
agreements.
Between February 2010 and November 2011, we announced that the Board of Directors authorized a total of $4.25
billion for share repurchases, of which $443 million under the November 2011 authorization was remaining as of
January 28, 2012. In February 2012, we announced that the Board of Directors approved a new $1 billion share
repurchase authorization that replaced the November 2011 authorization and cancelled the remaining $441 million
under the November 2011 authorization as of February 23, 2012. We have not entered into purchase agreements
with members of the Fisher family in connection with these authorizations.
All except $4 million of total share repurchases in the table above were paid for as of January 28, 2012. All of the
share repurchases were paid for as of January 29, 2011.
Note 9. Share-Based Compensation
Share-based compensation expense is as follows:
Fiscal Year
($ in millions) 2011 2010 2009
Stockunits............................................................................ $39 $59 $51
Stockoptions ......................................................................... 15 14 9
Employeestockpurchaseplan .......................................................... 444
Share-based compensation expense ..................................................... 58 77 64
Less:Incometaxbenefit................................................................ (23) (31) (25)
Share-based compensation expense, net of tax ........................................... $35 $46 $39
No material share-based compensation expense was capitalized in fiscal 2011, 2010, or 2009.
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 2011, 2010, or 2009.
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 amended and restated on August 20,
2008. The 2006 Plan was further amended and restated on May 17, 2011 and renamed the 2011 Long-Term Incentive
Plan (the “2011 Plan”). Under the 2011 Plan, nonqualified stock options and other stock awards are granted to
officers, directors, eligible employees, and consultants at exercise prices or 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. The 2002 Plan empowered the
Committee to award nonqualified stock options to non-officer employees. On May 9, 2006, the 2002 Plan was
discontinued, and those awards then outstanding continued to be subject to the terms of the 2002 Plan under
which they were granted. Pursuant to the 2011 Plan, any shares (not to exceed 28,019,786 shares) that otherwise
would have been returned to the 2002 Plan after May 9, 2006 on account of expiration, cancellation, or forfeiture
of awards granted are available for grant under the 2011 Plan.
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