Supercuts 2008 Annual Report Download - page 108

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. SHAREHOLDERS' EQUITY
Net Income Per Share:
The Company's basic earnings per share is calculated as net income divided by weighted average common shares outstanding, excluding
unvested outstanding RSAs and RSUs. The Company's dilutive earnings per share is calculated as net income divided by weighted average
common shares and common share equivalents outstanding, which includes shares issuable under the Company's stock option plan and long-
term incentive plan, shares issuable under contingent stock agreements, and dilutive securities. Stock-based awards with exercise prices greater
than the average market value of the Company's common stock are excluded from the computation of diluted earnings per share.
The following table sets forth a reconciliation of shares used in the computation of basic and diluted earnings per share:
The following table sets forth the awards which are excluded from the various earnings per share calculations:
(1)
2008
2007
2006
(Shares in thousands)
Weighted average shares for basic earnings per share
43,157
44,723
45,168
Effect of dilutive securities:
Dilutive effect of stock
-
based compensation
430
844
1,076
Contingent shares issuable under contingent stock agreements
—
56
156
Weighted average shares for diluted earnings per share
43,587
45,623
46,400
2008
2007
2006
(Shares in thousands)
Basic earnings per share:
RSAs(1)
308
259
193
RSUs(1)
215
215
—
523
474
193
Diluted earnings per share:
Stock options(2)
517
492
436
SARs(2)
416
405
96
RSAs(2)
183
—
—
RSUs(2)
215
—
—
1,331
897
532
Awards were not vested
(2)
Awards were anti
-
dilutive
Stock-based Compensation Award Plans:
In May of 2004, the Company's Board of Directors approved the 2004 Long Term Incentive Plan (2004 Plan). The 2004 Plan received
shareholder approval at the annual shareholders' meeting held on October 28, 2004. The 2004 Plan provides for the granting of stock options,
equity-based stock appreciation rights (SARs) and restricted stock, as well as cash-based performance grants, to employees
106