Abercrombie &Fitch ments to Shahid & Company, Inc. for expense incurred while per- forming these services.  not that the full amount of the net deferred tax assets will be realized in the future.  On January 1, 2002, A&F loaned the amount of $4,953,833 to its Chairman, a major shareholder of A&F, pursuant to the terms of a replacement promissory note, which provided that such amount was due and payable on December 31, 2002. The outstanding principal under the note did not bear interest as the net sales threshold, per the terms of the note, was met. This note was paid in full by the Chairman on December 31, 2002. This note constituted a replacement of, and substitute for, sev- eral promissory notes dating from November 17, 1999 through May 18, 2001. 8. LONG-TERM DEBT The Company entered into a $250 mil- lion syndicated unsecured credit agreement (the “New Credit Agreement”) on November 14, 2002 to replace both a $150 mil- lion syndicated unsecured credit agreement (the “Old Credit Agreement”) and a separate $75 million facility for the issuance of trade letters of credit. The primary purposes of the New Credit Agreement are for trade and stand-by letters of credit and working capital. The New Credit Agreement is due to expire on November 14, 2005. The New Credit Agreement has several bor- rowing options, including interest rates that are based on the agent bank’s “Alternate Base Rate,” or a LIBO Rate. Facility fees payable under the New Credit Agreement are based on the Company’s ratio (the “leverage ratio”) of the sum of total debt plus 800% of forward minimum rent commitments to EBITDAR for the trailing four-fiscal-quarter period and currently accrues at .225% of the committed amounts per annum. The New Credit Agreement contains limitations on indebtedness, liens, sale- leaseback transactions, significant corporate changes including mergers and acquisitions with third parties, investments, restricted payments (including dividends and stock repurchases), hedging transactions and transactions with affiliates. The New Credit Agreement also contains financial covenants requiring a mini- mum ratio of EBITDAR for the trailing four-fiscal-quarter period to the sum of interest expense and minimum rent for such period, as well as a maximum leverage ratio. Letters of credit totaling approximately $41.8 million were outstanding under the New Credit Agreement at February 1, 2003. Letters of credit totaling approximately $49.9 million were outstanding under the $75 million facility for the issuance of trade letters of credit at February 2, 2002. No borrowings were outstanding under the New Credit Agreement at February 1, 2003 or under the Old Credit Agreement at February 2, 2002. 10. STOCK OPTIONS AND RESTRICTED SHARES Under A&F’s stock plans, associates and non-associate directors may be granted up to a total of 21.4 million restricted shares and options to pur- chase A&F’s common stock at the market price on the date of grant. In 2002, associates of the Company were granted options covering approximately 3.5 million shares, with vesting periods from four to five years. Options covering a total of 44,000 shares were granted to non-associate directors in 2002, all of which vest over four years. All options have a maximum term of ten years. Options Outstanding at February 1, 2003 Options Outstanding Options Exercisable Weighted– Average Weighted– Weighted– Range of Remaining Average Average Exercise Number Contractual Exercise Number Exercisable Prices Outstanding Life Price Exercisable Price $8-$23 4,304,000 5.2 $12.98 2,575,000 $12.01 $23-$38 6,596,000 7.7 $26.40 1,713,000 $26.29 $38-$52 5,159,000 6.5 $43.54 268,000 $41.19 $8-$52 16,059,000 6.6 $28.31 4,556,000 $19.10 A summary of option activity for 2002, 2001 and 2000 follows: 9. RELATED PARTY TRANSACTIONS Shahid & Company, Inc. has provided advertising and design services for the Company since 1995. Sam N. Shahid Jr., who serves on A&F’s Board of Directors, has been President and Creative Director of Shahid & Company, Inc. since 1993. Fees paid to Shahid & Company, Inc. for services provided during fiscal years 2002, 2001 and 2000 were approximately $1.9 million, $1.8 million and $1.7 million, respectively. These amounts do not include reimburse- Number of Weighted–Average 2002 Shares Option Price Outstanding at beginning of year 12,961,000 $28.65 Granted 3,583,000 26.53 Exercised (93,000) 16.44 Canceled (392,000) 26.31 Outstanding at end of year 16,059,000 $28.31 Options exercisable at year-end 4,556,000 $19.10 23