American Eagle Outfitters 2014 Annual Report Download - page 59

Table of Contents
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
shares of stock and restricted stock units plus any unused carryover limit from the previous year. The 2005 Plan allows the Compensation
Committee of the Board to determine which employees receive awards and the terms and conditions of the awards that are mandatory under the
2005 Plan. The 2005 Plan provides for grants to directors who are not officers or employees of the Company, which are not to exceed 20,000
shares per year (not to be adjusted for stock splits). Through January 31, 2015, 17.1 million non-qualified stock options, 10.4 million shares of
restricted stock and 0.4 million shares of common stock had been granted under the 2005 Plan to employees and directors (without considering
cancellations to date of awards for 13.1 million shares). Approximately 95% of the options granted under the 2005 Plan vest over three years,
4% vest over one year and 1% vest over five years. Options were granted for ten and seven year terms. Approximately 62% of the restricted
stock awards are performance-based and are earned if the Company meets established performance goals. The remaining 38% of the restricted
stock awards are time-based and vest over three years. The 2005 Plan terminated on May 29, 2014 with all rights of the awardees and all
unexpired awards 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-qualified stock options and 6.7 million shares of restricted stock were granted to employees and certain non-employees
(without considering cancellations to date of awards for 9.7 million shares). Approximately 33% of the options granted were to vest over eight
years after the date of grant but were accelerated as the Company met annual performance goals. Approximately 34% of the options granted
under the 1999 Plan vest over three years, 23% vest over five years and the remaining grants vest over one year. All options expire after 10
years. Performance
-based restricted stock was earned if the Company met established performance goals. The 1999 Plan terminated on
June 15, 2005 with all rights of the awardees and all unexpired awards continuing in force and operation after the termination.
Stock Option Grants
The Company grants both time-based and performance-based stock options under the 2005 Plan. Time-based stock option awards vest
over the requisite service period of the award or to an employee’s eligible retirement date, if earlier. Performance-based stock option awards
vest over three years and are earned if the Company meets pre-established performance goals during each year.
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