|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the GPS 10-K filed Mar 27, 2009. 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
Table of Contents
We evaluate the probability that the Performance Shares will vest at the end of each reporting period. We record share-based compensation cost based on the grant-date fair value and the probability that the pre-determined financial target will be achieved. A summary of Stock Unit activity under the 2006 Plan for fiscal 2008 is as follows:
A summary of additional information about Stock Units is as follows:
The aggregate intrinsic value of unvested Stock Units at January 31, 2009 was $106 million with a weighted-average remaining contractual life of 1.95 years. At January 31, 2009, there was $50 million (before any related tax benefit) of unrecognized share-based compensation, adjusted for estimated forfeitures, related to unvested Stock Units that is expected to be recognized over a weighted-average period of 2.83 years. Total unrecognized share-based compensation may be adjusted for future changes in estimated forfeitures. These excerpts taken from the GPS 10-K filed Mar 28, 2008. 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. We evaluate the probability that the Performance Shares will vest at the end of each reporting period. We record share-based compensation cost based on the grant-date fair value and the probability that the pre-determined financial target will be achieved.
Gap Inc. Form 10-K 57
Table of Contents
A summary of Stock Unit activity under the 2006 Plan as of February 2, 2008 and changes during fiscal 2007 are presented below:
The weighted-average fair value of Stock Units granted during fiscal 2007, 2006, and 2005 was $17.63, $18.37, and $21.37 per share, respectively. The fair value of Stock Units that vested during fiscal 2007 and 2006 was $11 million and $10 million, respectively. No Stock Units vested in fiscal 2005. The aggregate intrinsic value of unvested Stock Units at February 2, 2008 was $12 million with a weighted-average remaining contractual life of 2.4 years. At February 2, 2008, there was $46 million (before any related tax benefit) of unrecognized share-based compensation, adjusted for estimated forfeitures, related to unvested Stock Units that is expected to be recognized over a weighted-average period of 3.4 years. Total unrecognized share-based compensation may be adjusted for future changes in estimated forfeitures. Compensation Cost for Stock Units 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 We evaluate the
Gap Inc. Form 10-KSIZE="1"> 57 Table of Contents
A summary of Stock Unit activity under the 2006 Plan
The weighted-average fair value of Stock Units granted during fiscal 2007, 2006, and 2005 was $17.63, $18.37, and $21.37 per
SIZE="2">Compensation Cost for Performance Units Under the 2006 Plan, some Stock Units are granted to certain employees only after the achievement of share-based compensation cost based on the probability that the performance metrics will be achieved, with an offsetting increase to current liabilities. We revalue the liability at the end of each reporting period and record an adjustment to share-based compensation as required, based on the probability that the performance metrics will be achieved. Upon achievement of the performance metrics, a Stock Unit is granted. At that time, the associated liability is reclassified to stockholders’ equity. Out of 6,048,873 Stock Unit grants in fiscal 2007, 119,102 Stock Units were granted for Performance Units outstanding in fiscal 2006. At February 2, 2008, the liability related to SIZE="2">Employee Stock Purchase Plan Prior to December 1, 2006, under our Employee Stock Purchase Plan (“ESPP”), eligible U.S. employees could
58 Gap Inc. Form 10-K Table of Contents
The fair value of the ESPP Option Feature was estimated using the Black-Scholes-Merton option-pricing model for fiscal 2006
The average discounted price of ESPP purchases in fiscal 2007 was $16.34 per share. The weighted-average fair value of ESPP | EXCERPTS ON THIS PAGE:
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
