American Eagle Outfitters 2009 Annual Report Download - page 61

The components of accumulated other comprehensive income (loss) were as follows:
January 30,
2010
January 31,
2009
For the Years Ended
(In thousands)
Net unrealized (loss) gain on available-for-sale securities, net of tax(1).... $(6,401) $(21,847)
Foreign currency translation adjustment ........................... 23,239 7,458
Accumulated other comprehensive (loss) income .................... $16,838 $(14,389)
(1) Amounts are shown net of tax of $3.9 million and $13.4 million for Fiscal 2009 and Fiscal 2008, respectively.
11. Share-Based Payments
At January 30, 2010, the Company had awards outstanding under three share-based compensation plans,
which are described below.
The Company accounts for share-based compensation under the provisions of ASC 718, Compensation —
Stock Compensation (“ASC 718”), which requires the Company to measure and recognize compensation expense
for all share-based payments at fair value. Total share-based compensation expense included in the Consolidated
Statements of Operations for Fiscal 2009, Fiscal 2008 and Fiscal 2007 was $36.9 million ($22.8 million, net of tax),
$20.3 million ($12.5 million, net of tax) and $33.7 million ($20.7 million, net of tax), respectively.
ASC 718 requires recognition of compensation cost under a non-substantive vesting period approach.
Accordingly, the Company recognizes compensation expense over the period from the grant date to the date
retirement eligibility is achieved, if that is expected to occur during the nominal vesting period. Additionally, for
awards granted to retirement eligible employees, the full compensation cost of an award must be recognized
immediately upon grant.
Share-based compensation plans
1994 Stock Option Plan
On February 10, 1994, the Company’s Board adopted the American Eagle Outfitters, Inc. 1994 Stock Option
Plan (the “1994 Plan”). The 1994 Plan provided for the grant of 12.2 million incentive or non-qualified options to
purchase common stock. The 1994 Plan was subsequently amended to increase the shares available for grant to
24.3 million shares. Additionally, the amendment provided that the maximum number of options that may be
granted to any individual may not exceed 8.1 million shares. The options granted under the 1994 Plan were
approved by the Compensation Committee of the Board, primarily vest over five years, and expire 10 years from the
date of grant. The 1994 Plan terminated on January 2, 2004 with all rights of the optionees and all unexpired options
continuing in force and operation after the termination.
1999 Stock Incentive Plan
The 1999 Stock Option Plan (the “1999 Plan”) was approved by the stockholders on June 8, 1999. The 1999
Plan authorized 18.0 million shares for issuance in the form of stock options, stock appreciation rights (“SAR”),
restricted stock awards, performance units or performance shares. The 1999 Plan was subsequently amended to
increase the shares available for grant to 33.0 million. Additionally, the 1999 Plan provided that the maximum
number of shares awarded to any individual may not exceed 9.0 million shares. The 1999 Plan allowed the
Compensation Committee to determine which employees and consultants received awards and the terms and
conditions of these awards. The 1999 Plan provided for a grant of 1,875 stock options quarterly (not to be adjusted
for stock splits) to each director who is not an officer or employee of the Company starting in August 2003. The
Company ceased making these quarterly stock option grants in June 2005. Under this plan, 33.2 million non-
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AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)