HIBBETT SPORTING GOODS, INC.
2005 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
June 30, 2006 and 2005
On September 13, 1996, the Board of Directors of Hibbett Sporting Goods, Inc. (the Company) approved the adoption of Hibbett Sporting Goods, Inc. Employee Stock Purchase Plan. The Hibbett Sporting Goods, Inc. Employee Stock Purchase Plan was replaced with the 2005 Employee Stock Purchase Plan (the Plan) through a vote of the Company’s stockholders at the Annual Meeting on May 31, 2005. Effective July 1, 2005, any unused shares from the Plan were rolled into the 2005 Employee Stock Purchase Plan. The following description of the Plan is provided for general information only. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.
The Plan provides employees of the Company an opportunity to purchase shares of common stock of the Company. The Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is therefore not subject to Federal and state income taxes. The Plan is not subject to the Employee Retirement Income Security Act of 1974.
Participants of the Plan may purchase shares of the Company’s common stock through payroll deductions during the plan year. Payroll deductions may be from a minimum of 1% up to a maximum of 10% of the participant’s eligible pay each period. On the first day of each calendar quarter, a participant is deemed to have been granted an option to purchase a maximum number of shares of common stock of the Company as defined in the Plan.
The Company establishes a withholding account for each participant and all payroll deductions made for a participant are credited to his or her account under the Plan. Amounts are held in these accounts and, on a quarterly basis, the options are exercised at a price equal to the lower of 85% of the fair value of the common stock on the first day of the calendar quarter or 85% of the fair value of the common stock on the last day of the calendar quarter.
The Plan is administered by a committee appointed by the Board of Directors consisting of not less than two Board members.
2. | PARTICIPANT AND PLAN TERMINATIONS |
Although it has not expressed any intent to do so, the Company has the right under the Plan to alter, suspend, amend or terminate the Plan. In the event of plan termination, the participant’s rights to acquire stock continues until the end of the current option period, at which time the balance of a participant’s withholding account would be returned to the participant and no further contributions would be accepted. Subject to the right of the Board of Directors to terminate the Plan prior thereto, the Plan will terminate and there will be no further offerings upon the earlier of: (1) the issuance of 379,688 shares of common stock reserved for employee purchase as defined in the Plan Agreement, or (2) the end of the fortieth quarterly offering.
The accompanying financial statements have been prepared on the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan’s management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates.
As of June 30, 2006 and 2005, the Plan was obligated to purchase 3,864 and 2,721 shares of the Company’s common stock for participants of the Plan, respectively. The fair value of the Company’s common stock on June 30, 2006, and April 1, 2006, was $23.90 and $32.99 per share, respectively, and on June 30, 2005 and April 1, 2005, was $37.84 and $29.95 per share, respectively. All common stock acquired in connection with the Plan is distributed directly to participants.
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All expenses of the Plan are paid by the Company on behalf of the Plan. The Company is not required to, and does not, pay interest on amounts held in withholding accounts for participants of the Plan. Participants are not taxed upon receipt or exercise of options. Participants are taxed upon disposition of shares purchased under the Plan.
On August 18, 2005, the Company’s Board of Directors declared a 3-for-2 stock split on the Company’s Common Stock to holders of record on September 9, 2005, effective September 27, 2005. The effect of the stock split increases the number of shares available for offering under the Plan from 253,125 to 379,688.
INDEX TO EXHIBITS
Exhibit Number | |
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4.1 | Hibbett Sporting Goods, Inc. Employee Stock Purchase Plan (incorporated by reference to exhibit filed in Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-07023), filed with the Securities and Exchange Commission September 16, 1996). |
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4.2 | Summary Plan Description of Hibbett Sporting Goods, Inc. Employee Stock Purchase Plan (incorporated by reference to exhibit filed in Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-07023), filed with the Securities and Exchange Commission September 16, 1996). |
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4.3 | Hibbett Sporting Goods, Inc. 2005 Employee Stock Purchase Plan (incorporated by reference to exhibit filed in the Company’s Registration Statement on Form S-8 (Registration No. 333-126316), filed with the Securities and Exchange Commission June 30, 2005). |
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23 | Consent of Independent Registered Public Accounting Firm* |
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* Filed herewith
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EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Hibbett Sporting Goods, Inc.:
We consent to the incorporation by reference in the registration statement No. 333-126316 on Form S-8 of Hibbett Sporting Goods, Inc. of our report dated September 18, 2006, with respect to the statements of net assets available for benefits of Hibbett Sporting Goods, Inc. 2005 Employee Stock Purchase Plan as of June 30, 2006 and 2005, and the related statements of changes in net assets for the years then ended which report appears in the June 30, 2006 Form 11-K of Hibbett Sporting Goods, Inc. 2005 Employee Stock Purchase Plan.
Birmingham, Alabama | /s/ KPMG LLP |
September 25, 2006
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