HIBBETT SPORTS, INC.
2005 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
June 30, 2007, 2006 and 2005
The following description of the Hibbett Sports, Inc. 2005 Employee Stock Purchase Plan is provided for general information only. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.
On September 13, 1996, the Board of Directors of Hibbett Sports, Inc. (the “Company”) approved the adoption of Hibbett Sporting Goods, Inc. Employee Stock Purchase Plan (the “1996 Plan”). The 1996 Plan was replaced with the 2005 Hibbett Sports, Inc. Employee Stock Purchase Plan (the “2005 Plan”) through a vote of the Company’s stockholders at the Annual Meeting on May 31, 2005. Effective July 1, 2005, any unissued shares and unused contributions from the 1996 Plan were rolled into the 2005 Plan. On February 9, 2007, the Company changed its name from Hibbett Sporting Goods, Inc. to Hibbett Sports, Inc., and the 2005 Plan changed its name from the Hibbett Sporting Goods, Inc. 2005 Employee Stock Purchase Plan to the Hibbett Sports, Inc., 2005 Employee Stock Purchase Plan.
The 2005 Plan provides employees of the Company an opportunity to purchase shares of common stock of the Company. The 2005 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 2005 Plan is not subject to the Employee Retirement Income Security Act of 1974.
Participants of the 2005 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 2005 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 2005 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 2005 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 2005 Plan to alter, suspend, amend or terminate the 2005 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 2005 Plan prior thereto, the 2005 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 2005 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
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of America requires the 2005 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, 2007, 2006 and 2005, the 2005 Plan was obligated to purchase 3,921, 3,864 and 2,271 shares of the Company’s common stock for participants of the 2005 Plan, respectively. The fair value of the Company’s common stock on June 30, 2007, and April 1, 2007, was $27.38 and $28.59 per share, respectively, 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, respectively. All common stock acquired in connection with the 2005 Plan is distributed directly to participants.
All expenses of the 2005 Plan are paid by the Company on behalf of the 2005 Plan. The Company is not required to, and does not, pay interest on amounts held in withholding accounts for participants of the 2005 Plan. Participants are not taxed upon receipt or exercise of options. Participants are taxed upon disposition of shares purchased under the 2005 Plan.
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 Sports, 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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