2. Basic and Diluted Earnings Per Share

Accounting Standards Codification 260, Earnings Per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to certain employees under our restricted stock agreements, grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, we are required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.

Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted. The application of the two-class method did not have a material impact on the earnings per share calculation for fiscal 2014.

During fiscal 2016 and 2015, all shares of outstanding options were included in the computation of diluted earnings per share. During fiscal 2014, options to purchase 0.04 million shares were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive. During fiscal 2016 and 2015, restricted stock awards of 0.6 million shares and 0.5 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:


	Year Ended April 30,
	2016		2015		2014
	(in thousands, except per share data)
Net income attributable to Korn/Ferry International	$	30,913	$	88,357	$	72,691
Less: distributed and undistributed earnings to nonvested restricted stockholders		280		860		—

Basic net earnings attributable to common stockholders		30,633		87,497		72,691
Add: undistributed earnings to nonvested restricted stockholders		82		815		—
Less: reallocation of undistributed earnings to nonvested restricted stockholders		81		804		—

Diluted net earnings attributable to common stockholders	$	30,634	$	87,508	$	72,691

Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding		52,372		49,052		48,162
Effect of dilutive securities:
Restricted stock		487		605		789
Stock options		50		105		194
ESPP		20		4		—

Diluted weighted-average number of common shares outstanding		52,929		49,766		49,145

Net earnings per common share:
Basic earnings per share	$	0.58	$	1.78	$	1.51

Diluted earnings per share	$	0.58	$	1.76	$	1.48