By and  on June 13, 2007

At its annual shareholders meeting on Tuesday in New York, the board of American Eagle Outfitters Inc. voted to raise the cash dividend payment as a signal of "our continuing confidence in the strong growth prospects and future financial performance."

The dividend will rise by 33 percent to an annual rate of 40 cents a share, from 30 cents a share. A quarterly cash dividend of 10 cents a share was declared, which is payable on July 13 to stockholders of record at the close of business on July 2.

"We will continue to seek to enhance shareholder value through dividends and share repurchases, along with strategies to maximize the potential of our brands and pursue new growth concepts," said Jim O'Donnell, American Eagle's chief executive officer.

The company is revising a proposal to increase the number of shares of common stock it would be authorized to issue. The retailer had planned to ask shareholders at the meeting to approve an increase from 250 million shares to 750 million, but said it is now seeking the right to issue up to 600 million shares.

Other business at the meeting included the nomination of Cary McMillan to AE's board and the election of three incumbent board members. Upon election, McMillan, ceo of True Partners Consulting and formerly executive vice president of Sara Lee Corp., will take the seat of retiring board member Larry M. Wolf, who has served as a director since May 2003.

During the meeting, which began at 11 a.m. at the Lowes Regency Hotel on Park Avenue, a number of members of UNITE HERE questioned O'Donnell about alleged employee rights violations at AE's Canadian distributor, National Logistics Services. The organization also distributed a letter to shareholders outlining conditions at the warehouse.

O'Donnell responded that he takes the company's code of conduct for vendors and contractors seriously.

UNITE HERE held a rally at 12:30 p.m. in front of AE's store on Union Square. Between 100 and 200 people gathered to denounce NLS' strong-arm tactics, which UNITE HERE alleges it used to discourage employees from joining the union. Organizers asked consumers to sign cards pledging to boycott AE until it enforces its code of conduct. It also is collecting signatures online at its new Web site, A UNITE HERE member was dressed in a vulture costume at the rally.

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