Urban Outfitters 2009 Annual Report Download - page 75

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URBAN OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Performance Shares
On April 28, 2008, the Company granted two awards of 30,184 Performance Stock Units
(“PSU’s”). These PSU’s are subject to a vesting period of two years for the first grant (“Grant A”), and
three years for the second grant (“Grant B”). Each PSU grant is subject to various performance criteria.
If any of these criteria are not met, the grants are forfeited. Each PSU is equal to one share of common
stock with a total award value not to exceed 30% appreciation. Grant A had a grant date fair value of
$21.55 per share and Grant B had a grant date fair value of $19.47 per share, with both grants having a
total grant date fair value of $1,238. The grant date fair value was calculated using a Lattice Binomial
Model. In accordance with FAS 123R, there was no compensation expense recognized in the
Company’s Consolidated Statements of Income during the year ended January 31, 2009 because
vesting was deemed highly improbable due to the unlikely achievement of the performance criteria
governing the grant. The performance criteria achievement is re-measured at each reporting period,
and if it is deemed likely that the performance targets will be achieved, any unrecognized
compensation expense will be recognized prospectively as of the end of the then current reporting.
10. Net Income Per Common Share
The following is a reconciliation of the weighted average shares outstanding used for the
computation of basic and diluted net income per common share:
Fiscal Year Ended January 31,
2009 2008 2007
Basic weighted average shares outstanding ............ 166,793,062 165,305,207 164,679,786
Effect of dilutive options and restricted stock .......... 4,067,543 4,335,378 3,972,219
Diluted weighted average shares outstanding .......... 170,860,605 169,640,585 168,652,005
For the fiscal years ended January 31, 2009, 2008 and 2007, options to purchase 3,351,338 shares
ranging in price from $16.58 to $37.51, options to purchase 4,063,875 shares ranging in price from
$22.11 to $31.11 and options to purchase 4,763,375 shares ranging in price from $15.48 to $31.11,
were excluded from the calculation of diluted net income per common share for the respective fiscal
years because the effect was anti-dilutive.
F-27