Hibbett Sports 2012 Annual Report Download - page 18

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In March 2005, we entered into a Retention Agreement (the Agreement) with Mr. Newsome. The purpose of the
Agreement is to secure the continued employment of Mr. Newsome as an advisor to us following his future retirement from the
duties of Chief Executive Officer of our Company. Although, Mr. Newsome stepped down as Chief Executive Officer in March
2010, he is actively involved in the daily operations of our Company and his retirement is not currently planned.
The Compensation Committee of our Board of Directors reviews a succession plan prepared by senior management in
consideration of the loss of other key personnel positions on a bi-annual basis. The goal of the succession plan is to have a
contingency plan that minimizes disruptions in the workplace until a suitable replacement can be found. On January 30, 2012, Gary
A. Smith, our Chief Financial Officer, announced his retirement effective June 1, 2012. We have commenced a search for his
replacement with the goal of ensuring a smooth and orderly transition.
Provisions in our charter documents and Delaware law might deter acquisition bids for us.
Certain provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects and may
discourage, delay or prevent a takeover attempt that a stockholder might consider in its best interest. These provisions, among other
things:
 classify our Board of Directors into three classes, each of which serves for different three-year periods;
 provide that a director may be removed by stockholders only for cause by a vote of the holders of not less than two-
thirds of our shares entitled to vote;
 provide that all vacancies on our Board of Directors, including any vacancies resulting from an increase in the
number of directors, may be filled by a majority of the remaining directors, even if the number is less than a quorum;
 provide that special meetings of the common stockholders may only be called by the Board of Directors, the
Chairman of the Board of Directors or upon the demand of the holders of a majority of the total voting power of all
outstanding securities of the Company entitled to vote at any such special meeting; and
 call for a vote of the holders of not less than two-thirds of the shares entitled to vote in order to amend the foregoing
provisions and certain other provisions of our certificate of incorporation and bylaws.
In addition, our Board of Directors, without further action of the stockholders, is permitted to issue and fix the terms of
preferred stock, which may have rights senior to those of common stock. We are also subject to the Delaware business combination
statute, which may render a change in control of us more difficult. Section 203 of the Delaware General Corporation Laws would be
expected to have an anti-takeover effect with respect to transactions not approved in advance by the Board of Directors, including
discouraging takeover attempts that might result in a premium over the market price for the shares of common stock held by
stockholders.
Increases in transportation costs due to rising fuel costs, climate change regulation and other factors may negatively impact our
results of operations.
We rely upon various means of transportation, including ship and truck, to deliver products from vendors to our
distribution center and from our distribution center to our stores. Consequently, our results can vary depending upon the price of
fuel. The price of oil has fluctuated drastically over the last few years, and has recently increased again, which has increased our fuel
costs. In addition, efforts to combat climate change through reduction of greenhouse gases may result in higher fuel costs through
taxation or other means. Any such future increases in fuel costs would increase our transportation costs for delivery of product to our
distribution center and distribution to our stores, as well as our vendors’ transportation costs, which could adversely affect our results
of operations.
In addition, labor shortages in the transportation industry could negatively affect transportation costs and our ability to
supply our stores in a timely manner. In particular, our business is highly dependent on the trucking industry to deliver products to
our distribution center and our stores. Our operating results may be adversely affected if we or our vendors are unable to secure
adequate trucking resources at competitive prices to fulfill our delivery schedules to our distribution center or our stores.
We manage cash and cash equivalents beyond federally insured limits per financial institution and purchase investments not
fully guaranteed by the Federal Deposit Insurance Corporation (FDIC), subjecting us to investment and credit availability risks.
We manage cash and cash equivalents in various institutions at levels beyond federally insured limits per institution, and
we purchase investments not guaranteed by the FDIC. Accordingly, there is a risk that we will not recover the full principal of our
investments or that their liquidity may be diminished. In an attempt to mitigate this risk, our investment policy emphasizes
preservation of principal and liquidity. With the current financial environment and the instability of financial institutions, we cannot
be assured that we will not experience losses on our deposits.