EXHIBIT (99)
FINANCIAL STATEMENTS
Genesco Employee Stock Purchase Plan
As of January 31, 2004 and February 1, 2003 and Each of the Three Fiscal Years
in the Period Ended January 31, 2004 with Report of Independent Auditors
GENESCO INC.
EMPLOYEE STOCK PURCHASE PLAN
Audited Financial Statements
January 31, 2004 and February 1, 2003
CONTENTS
Report of Independent Auditors.................................... 1
Financial Statements
Statements of Financial Condition................................. 2
Statements of Income and Changes in Plan Equity................... 3
Notes to Financial Statements..................................... 4
Report of Independent Auditors
To the Participants and Administrator
of the Genesco Employee Stock Purchase Plan
We have audited the accompanying statements of financial condition of the
Genesco Employee Stock Purchase Plan as of January 31, 2004 and February 1, 2003
and the related statements of income and changes in plan equity for each of the
three fiscal years in the period ended January 31, 2004. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Genesco Employee Stock
Purchase Plan at January 31, 2004 and February 1, 2003, and the changes in
income and plan equity for each of the three fiscal years in the period ended
January 31, 2004, in conformity with accounting principles generally accepted in
the United States.
/s/ Ernst & Young LLP
Nashville, Tennessee
March 17, 2004
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
JANUARY 31, FEBRUARY 1,
2004 2003
---- ----
ASSETS
Due from Genesco Inc. $148,351 $159,532
-------- --------
TOTAL ASSETS $148,351 $159,532
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LIABILITIES AND PLAN EQUITY
Plan equity $148,351 $159,532
-------- --------
TOTAL LIABILITIES AND PLAN EQUITY $148,351 $159,532
======== ========
See accompanying notes.
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Statements of Income and Changes in Plan Equity
FOR THE YEAR ENDED
------------------------------------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
2004 2003 2002
---- ---- ----
Employee contributions $ 398,174 $ 565,659 $ 641,442
Options exercised (359,180) (582,699) (579,593)
Distributions to withdrawn participants (50,175) (60,653) (40,100)
---------- ---------- ----------
Net increase(decrease) in plan equity (11,181) (77,693) 21,749
Plan equity at beginning of year 159,532 237,225 215,476
---------- ---------- ----------
PLAN EQUITY AT END OF YEAR $ 148,351 $ 159,532 $ 237,225
========== ========== ==========
See accompanying notes.
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The records of the Genesco Employee Stock Purchase Plan (the "Plan") are
prepared on the accrual basis of accounting.
ADMINISTRATIVE EXPENSES
All expenses incurred in administration of the Plan are paid by Genesco Inc.
(the "Company") and are excluded from these financial statements.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of Plan assets and liabilities
and disclosure of any contingent assets and liabilities at the date of the
financial statements and the reported amounts of changes in Plan equity during
the period. Actual results could differ from those estimates and the differences
could be material.
NOTE 2
THE PLAN
BACKGROUND AND SUMMARY
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
The Plan became effective October 1, 1995 to advance the interests of the
Company and its shareholders by attracting and retaining qualified employees and
by encouraging them to identify with shareholder interests through the
acquisition of shares of the Company's common stock.
ELIGIBILITY
Effective October 1, 2002, each employee whose total annual base salary is less
than $90,000 and whose customary employment is greater that 20 hours per week
and greater than five months per year is eligible to participate in the Plan if
the employee has been employed by the Company for at least six months prior to
the grant date. The Plan excludes statutory insiders and five percent
shareholders. Prior to October 1, 2002, the total annual base salary was limited
to $100,000.
CONTRIBUTIONS
Contributions to the Plan are solely from participating employees of the Company
who, through after-tax payroll deductions, may use their contributions to
purchase common stock of the Company at the end of a one-year option period. The
maximum number of shares available to any participant is the lesser of 2,000 a
year or that number of shares equal to $10,000 divided by the closing market
price of the common stock on the grant date or the exercise date. The maximum
contribution is the lesser of $8,500 a year or 15% of the participant's base pay
as of October 1. The minimum contribution is $250 per participant per year.
Shares will be purchased September 30 of the year following the October 1 grant
date with the initial grant date being October 1, 1995.
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements (Continued)
NOTE 2
THE PLAN, CONTINUED
An option enables the participant to purchase shares of the Company's common
stock at the lesser of 85% of the market value on the grant date or the exercise
date. Options are to be granted each year through and including October 1, 2004,
unless the board of directors, at its discretion, determines in advance that no
options are to be granted. The cumulative number of shares which may be
purchased under the Plan is 1,000,000. The options granted and rights thereto
may not be sold, assigned, pledged or otherwise transferred.
PARTICIPANT ACCOUNTS
Periodically throughout the year, each participant is provided with statements
reflecting the value of his or her account. Participant contributions are held
by the Company, which has an unsecured obligation to the Plan.
At the exercise date, the Company issues stock that is transferred to a
brokerage firm and distributed according to the number of options exercised by
each participant.
VESTING
Participants are 100% vested in the value of their account and may withdraw from
the Plan at any time except during the period September 15 through September 30
which is the time that preparations are made for the issuance of the stock each
year.
If a participant is terminated for any reason other than retirement, disability
or death, the participant's involvement in the Plan and any unexercised options
automatically terminate, and the participant will receive the account balance in
cash.
TERMINATION OF THE PLAN
The Company reserves the right to terminate the Plan at any time. In the event
of Plan termination, the balance of each participant's account shall be paid in
cash as soon as is reasonably practical.
PLAN ADMINISTRATOR
The Plan is to be administered by the compensation committee of the board of
directors or another designee of the board of directors.
INCOME TAX STATUS
The Plan is intended to qualify as an Employee Stock Purchase Plan within the
meaning of Section 423 of the Internal Revenue Code of 1986 ("the Code"), as
amended. Issuance of shares under this Plan are not intended to result in
taxable income to participants in the Plan based on provisions of the Code.
Accordingly, no income will result for federal income tax purposes when an
option is granted or exercised; however, income may result upon disposition of
the stock. Management believes that the Plan is operating in compliance with the
Code and, therefore, no provision for income taxes has been reflected in the
accompanying financial statements.
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements (Continued)
NOTE 3
OPTIONS TO PURCHASE COMPANY STOCK
OPTION PERIOD
--------------------------------------
10/01/03 10/01/02 10/01/01
TO TO TO
OPTIONS TO PURCHASE COMPANY STOCK TOTAL 09/30/04 09/30/03 09/30/02
- --------------------------------- ----- -------- -------- --------
Estimated options granted - October 1, 2001 56,314 -0- -0- 56,314
Additional options granted at exercise date -0- -0- -0- -0-
Options exercised -0- -0- -0- -0-
Options withdrawn (4,223) -0- -0- (4,223)
------ ------ ------ ------
Options outstanding, February 2, 2002 52,091 -0- -0- 52,091
------ ------ ------ ------
Estimated options granted - October 1, 2002 42,024 -0- 42,024 -0-
Additional options granted at exercise date 6,504 -0- -0- 6,504
Options exercised (49,676) -0- -0- (49,676)
Options withdrawn (11,392) -0- (2,473) (8,919)
------ ------ ------ ------
Options outstanding, February 1, 2003 39,551 -0- 39,551 -0-
------ ------ ------ ------
Estimated options granted - October 1, 2003 29,543 29,543 -0- -0-
Additional options granted at exercise date 553 -0- 553 -0-
Options exercised (32,505) -0- (32,505) -0-
Options withdrawn (8,876) (1,277) (7,599) -0-
------ ------ ------ ------
Options outstanding, January 31, 2004 28,266 28,266 -0- -0-
====== ====== ====== ======
The cumulative options exercised as of January 31, 2004 are 606,984.
OPTION PERIOD
---------------------------------------
10/01/03 10/01/02 10/01/01
TO TO TO
09/30/04 09/30/03 09/30/02
-------- -------- --------
85% of fair market value of stock at date of grant $14.30 $11.05 $13.39
Date of grant 10/1/03 10/1/02 10/1/01
85% of fair market value of stock at date of exercise NA $13.65 $11.73
Exercise date 9/30/04 9/30/03 9/30/02
At the beginning of each option period, the Company estimates the number of
options to be granted based on participant contributions and the current stock
price. At the end of the option period, the Company grants options to each plan
participant. In the event plan contributions, withdrawals or the stock price are
different than originally estimated, additional or fewer options may be granted
at the end of the option period (exercise date).
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GENESCO EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements (Continued)
NOTE 3
OPTIONS TO PURCHASE COMPANY STOCK, CONTINUED
OPTION PERIOD
---------------------------------------
10/01/03 10/01/02 10/01/01
TO TO TO
NUMBER OF PARTICIPANTS TOTAL 09/30/04 09/30/03 09/30/02
- ---------------------- ----- -------- -------- --------
Enrollment - October 1, 2001 425 -0- -0- 425
Exercised options -0- -0- -0- -0-
Withdrawn (22) -0- -0- (22)
---- --- ---- ---
Active, February 2, 2002 403 -0- -0- 403
---- --- ---- ---
Enrollment - October 1, 2002 357 -0- 357 -0-
Exercised options (316) -0- -0- (316)
Withdrawn (107) -0- (20) (87)
---- --- ---- ---
Active, February 1, 2003 337 -0- 337 -0-
---- --- ---- ---
Enrollment - October 1, 2003 310 310 -0- -0-
Exercised options (268) -0- (268) -0-
Withdrawn (82) (13) (69) -0-
---- --- ---- ---
Active, January 31, 2004 297 297 -0- -0-
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