American Eagle Outfitters 2004 Annual Report Download - page 68

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54
Part II
The following table summarizes information about stock options outstanding and exercisable at January 29, 2005:
Options Outstanding Options Exercisable
Range of
Exercise Prices
Number
Outstanding at
January 29,
2005
Weighted-
Average
Remaining
Contractual
Life (in years)
Weighted-
Average
Exercise Price
Number
Exercisable at
January 29, 2005
Weighted-
Average
Exercise Price
$0.57 to $7.03 4,041,342 7.47 $5.85 1,107,840 $7.03
$7.17 to $10.83 3,761,118 5.61 $9.78 1,632,946 $9.92
$10.85 to $13.15 3,288,246 6.54 $12.46 1,228,908 $12.04
$13.20 to $24.50 2,390,542 8.05 $16.97 730,180 $17.69
$0.57 to $24.50 13,481,248 7.12 $10.53 4,699,874 $11.69
Restricted Stock Grants
The Company issued restricted stock awards under the 1999 plan to compensate certain employees. Through January
29, 2005 a total of 7,974,612 shares of restricted stock had been granted, of which 2,136,826 shares have been
forfeited and 4,884,966 shares have vested. The Fiscal 2004 performance-based restricted stock award of 862,820
shares vested on March 8, 2005 and a time-based restricted stock award of 90,000 shares will vest over 3 years
beginning in May 2004.
For Fiscal 2004, Fiscal 2003 and Fiscal 2002, the Company recorded approximately $25.2 million, $1.3 million and
$1.4 million, respectively, in compensation expense related to stock options and restricted stock in connection with
the above Plans. The compensation expense related to stock options was recorded for non-employee grants in
accordance with APB No. 25.
14. Contingencies
Guarantees
In connection with the disposition of Bluenotes, the Company has provided guarantees related to two store leases
that were assigned to the Purchaser. These guarantees were provided to the applicable landlords and will remain in
effect until the leases expire in 2007 and 2015, respectively. The lease guarantees require the Company to make all
required payments under the lease agreements in the event of default by the Purchaser. The maximum potential
amount of future payments (undiscounted) that the Company could be required to make under the guarantees is
approximately $1.6 million as of January 29, 2005. In the event that the Company would be required to make any
such payments, it would pursue full reimbursement from YM, Inc., a related party of the Purchaser, in accordance
with the Bluenotes Asset Purchase Agreement.
In accordance with FASB Interpretation 45, Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others—an interpretation of FASB Statements No. 5, 57, and 107
and rescission of FASB Interpretation No. 34 (“FIN 45”), as the Company issued the guarantees at the time it
became secondarily liable under a new lease, no amounts have been accrued in the Company’s Consolidated
Financial Statements related to these guarantees. Additionally, Management believes that the likelihood of having to
perform under the guarantees is remote.