Dick's Sporting Goods 2010 Annual Report Download - page 82

On March 16, 2010, the Company granted 672,336 shares of restricted stock as a special one-time award in support of the
Company’s long-term strategic initiatives. These grants vest, in whole or in part, at the end of a three year period upon the
successful achievement of pre-established performance criteria.
Employee Stock Purchase Plan — The Company has an employee stock purchase plan, which provides that eligible employees may
purchase shares of the Company’s common stock. There are two offering periods in a fiscal year, one ending on June 30 and the
other on December 31, or as otherwise determined by the Company’s compensation committee. The employee’s purchase price is
85% of the lesser of the fair market value of the stock on the first business day or the last business day of the semi-annual
offering period. Employees may purchase shares having a fair market value of up to $25,000 for all purchases ending within the
same calendar year. The total number of shares issuable under the plan is 4,620,000. The Company issued 99,999 shares under
the plan during fiscal 2009. The Company suspended the ESPP in March 2009, such that its employees were not permitted to
purchase shares under the plan subsequent to the period ended June 30, 2009. The fiscal 2009 shares were issued at an average
price of $11.99.
Common Stock, Class B Common Stock and Preferred Stock — During fiscal 2004, the Company filed an amendment to its
Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our common stock, par value
$0.01 per share, from 100,000,000 to 200,000,000 and Class B common stock, par value $0.01 per share, from 20,000,000 to
40,000,000. In addition, the Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to
5,000,000 shares of preferred stock.
Holders of common stock generally have rights identical to holders of Class B common stock, except that holders of common
stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. A related party
and relatives of the related party hold all of the Class B common stock. These shares can only be held by members of this group
and are not publicly tradable. Each share of Class B common stock can be converted into one share of common stock at the
holder’s option at any time.
10. Income Taxes
The components of the provision for income taxes are as follows (in thousands):
2010 2009 2008
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,931 $65,424 $ 86,091
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,498 13,242 13,501
97,429 78,666 99,592
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,910 8,202 (42,105)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (905) 949 (3,801)
18,005 9,151 (45,906)
Total provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $115,434 $87,817 $ 53,686
The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the
following periods:
2010 2009 2008
Federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%
State tax, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8% 4.7% 3.7%
Non-deductible compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 20.2%
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 328.2%
Other permanent items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.4)% 1.3%
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.8% 39.3% 388.4%
62 Dick’s Sporting Goods, Inc. ¬2010 Annual Report
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)