American Eagle Outfitters 2009 Annual Report Download - page 63

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A summary of the Company’s stock option activity under all plans for Fiscal 2009 follows:
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
For the Year Ended January 30, 2010
(In Years) (In thousands)
Outstanding — January 31, 2009 .......... 14,496,734 $15.25
Granted............................. 3,402,609 $11.34
Exercised(1) ......................... 1,463,897 $ 7.08
Cancelled ........................... 1,530,504 $16.70
Outstanding — January 30, 2010 .......... 14,904,942 $15.01 3.8 $60,091
Vested and expected to vest — January 30,
2010 ............................. 14,546,241 $14.99 3.8 $58,809
Exercisable — January 30, 2010 .......... 5,031,264 $ 7.13 2.1 $44,063
(1) Options exercised during Fiscal 2009 ranged in price from $4.68 to $13.46.
The weighted-average grant date fair value of stock options granted during Fiscal 2009, Fiscal 2008 and Fiscal
2007 was $3.86, $7.16 and $10.64, respectively. The aggregate intrinsic value of options exercised during Fiscal
2009, Fiscal 2008 and Fiscal 2007 was $11.7 million, $3.9 million and $22.5 million, respectively. Cash received
from the exercise of stock options and the actual tax benefit realized from stock option exercises were $7.6 million
and $8.0 million, respectively, for Fiscal 2009. Cash received from the exercise of stock options and the actual tax
benefit realized from stock option exercises were $3.8 million and $1.1 million, respectively, for Fiscal 2008. Cash
received from the exercise of stock options and the actual tax benefit realized from stock option exercises were
$13.2 million and $7.3 million, respectively, for Fiscal 2007.
The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model
with the following weighted-average assumptions:
Black-Scholes Option Valuation Assumptions
January 30,
2010
January 31,
2009
February 2,
2008
For the Years Ended
Risk-free interest rates(1) ........................... 1.7% 2.5% 4.5%
Dividend yield . . . ................................ 3.4% 1.7% 0.9%
Volatility factors of the expected market price of the
Company’s common stock(2) ...................... 56.9% 44.4% 39.2%
Weighted-average expected term(3) .................... 4.1years 4.3 years 4.4 years
(1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life
of our stock options.
(2) Based on a combination of historical volatility of the Company’s common stock and implied volatility.
(3) Represents the period of time options are expected to be outstanding. The weighted average expected option
term for the years ended January 30, 2010 and January 31, 2009 were determined based on historical
experience. The weighted average expected option terms for the year ended February 2, 2008 was determined
using a combination of the “simplified method” for plain vanilla options as allowed by ASC 718, and past
behavior. The “simplified method” calculates the expected term as the average of the vesting term and original
contractual term of the options.
62
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)