American Eagle Outfitters 2005 Annual Report Download - page 78

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PAGE 54 AMERICAN EAGLE OUTFITTERS
A summary of the Company’s stock option activity under all plans follows:
For the Years Ended
January 28, 2006 (1) January 29, 2005 (1) January 31, 2004 (1)
Options
Weighted-
Average
Exercise Price Options
Weighted-
Average
Exercise Price Options
Weighted-
Average
Exercise Price
Outstanding - beginning of year 13,481,248 $10.53 20,050,190 $9.28 16,211,712 $9.92
Granted (Exercise price equal to
fair value)
781,365 $26.57 1,581,250 $15.63 5,257,560 $7.18
Exercised (2) (4,883,113) $9.87 (7,105,752) $8.10 (397,656) $2.86
Cancelled (374,590) $12.08 (1,044,440) $10.74 (1,021,426) $11.05
Outstanding - end of year 9,004,910 $12.22 13,481,248 $10.53 20,050,190 $9.28
Exercisable - end of year 4,680,459 $10.90 4,699,874 $11.69 9,222,422 $8.73
Weighted-average fair value of
options granted during the year
(Black-Scholes method)
$10.52 $6.34 $3.74
(1) As of January 28, 2006, the Company had 8,094,203 shares available for stock option grants. As of January 29,
2005 and January 31, 2004, the Company had 1,396,482 shares and 2,939,962 shares available for the grant of stock
options (as well as restricted stock and all other awards allowed under the 1999 Plan), respectively.
(2) Options exercised during Fiscal 2005 ranged in price from $0.57 to $20.52 with an average of $9.87.
The following table summarizes information about stock options outstanding and exercisable at January 28, 2006:
Options Outstanding Options Exercisable
Range of
Exercise Prices
Number
Outstanding at
January 28,
2006
Weighted-Average
Remaining
Contractual
Life (in years)
Weighted-Average
Exercise Price
Number
Exercisable at
January 28,
2006
Weighted-Average
Exercise Price
$0.97 to $7.03 2,213,421 6.69 $6.49 718,853 $5.49
$7.17 to $10.83 2,594,122 4.49 $9.91 2,284,506 $10.16
$10.85 to $13.15 1,892,736 5.72 $12.42 1,087,220 $12.14
$13.20 to $32.81 2,304,631 7.13 $20.14 589,880 $18.08
$0.97 to $32.81 9,004,910 6.34 $12.22 4,680,459 $10.90
Restricted Stock Grants
The Company issued restricted stock awards under the above Plans to compensate certain employees. Through January
28, 2006, a total of 9,078,868 shares of restricted stock had been granted, of which 2,541,058 have been cancelled and
5,777,786 shares have vested. Included in the aforementioned shares of restricted stock that have vested is one-third of
a 90,000 share time-based restricted stock award, which vested in May 2005. The remaining 60,000 shares of this time-
based restricted stock award will vest over two years. The Fiscal 2005 performance-based restricted stock award of
700,024 shares vested on February 28, 2006.
For Fiscal 2005, Fiscal 2004 and Fiscal 2003, the Company recorded approximately $19.6 million, $25.2 million and
$1.3 million, respectively, in compensation expense related to stock options, restricted stock and stock awards 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.