Hibbett Sports 2007 Annual Report Download - page 51

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NOTE 3. STOCK-BASED COMPENSATION
At February 3, 2007, the Company had four stock-based compensation plans:
(a) The 2005 Equity Incentive Plan (“Incentive Plan”) provides that the Board of Directors may grant equity
awards to certain employees of the Company at its discretion. The Incentive Plan authorizes grants of
equity awards of up to 1,233,159 authorized, but unissued shares of common stock which includes
483,159 shares carried forward from the original 1996 Stock Option Plan (“1996 Plan”), as amended,
plus an additional 750,000 shares approved for issuance effective July 1, 2005. At February 3, 2007,
there were 1,028,907 shares available for grant under the Incentive Plan.
(b) The 2005 Employee Stock Purchase Plan (“ESPP”) allows for qualified employees to participate in the
purchase of up to 204,794 shares of our common stock at a price equal to 85% of the lower of the
closing price at the beginning or end of each quarterly stock purchase period. At February 3, 2007,
there were 177,628 shares available for purchase under the ESPP.
(c) The 2005 Director Deferred Compensation Plan (“Deferred Plan”) allows non-employee directors an
election to defer all or a portion of their fees into stock units, stock options or cash. The Deferred Plan
authorizes grants of stock up to 112,500 authorized, but unissued shares of common stock. At
February 3, 2007, there were 110,777 shares available for grant under the Deferred Plan.
(d) The 2006 Non-Employee Director Equity Plan (“DEP”) provides for grants of equity awards to non-
employee directors. The DEP authorizes grants of equity awards of up to 672,975 authorized, but
unissued shares of common stock which includes 172,975 shares carried forward from the original
Stock Plan for Outside Directors (“Director Plan”), plus an additional 500,000 shares approved for
issuance effective June 1, 2006. At February 3, 2007, there were 665,525 shares available for grant
under the DEP.
Prior to January 29, 2006, we accounted for our stock-based compensation plans under the recognition and
measurement principles of APB No. 25, and related interpretations. Under APB No. 25, no compensation cost for
stock options was reflected in net earnings, as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the date of grant. In addition, no compensation expense was
recognized for common stock purchases under the ESPP.
Effective January 29, 2006, we adopted the fair value recognition provisions of SFAS No. 123R using the
modified prospective transition method. Under this method, compensation cost recognized in the period ended
February 3, 2007 included: (a) compensation expense for all share-based payments granted prior to, but not yet
vested as of January 28, 2006, based on the grant date fair value estimated in accordance with the original provisions
of SFAS No. 123 and (b) compensation expense for all share-based payments granted on or after January 29, 2006,
based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. The fair value of
each stock option was estimated on the grant date using the Black-Scholes option-pricing model with various
assumptions used for new grants as described below. Compensation expense for new stock options and nonvested
equity awards is recognized on a straight-line basis over the vesting period. In accordance with the modified
prospective method, results for prior periods have not been restated.
The following table illustrates the pro-forma effect on net income and earnings per share for the fiscal years
ended January 28, 2006 and January 29, 2005 as if we had applied the fair value recognition provisions of SFAS No.
123, as amended, to stock-based compensation (in thousands, except per share data):