Petsmart 2007 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2007 Petsmart annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

maximum of 4.0 million shares is authorized for purchase until the ESPP plan termination date of July 31, 2012.
Share purchases and proceeds were as follows (in thousands):
2007 2006 2005
(53 weeks) (52 weeks) (52 weeks)
Shares purchased .................................... 246 216 250
Aggregate proceeds .................................. $5,368 $4,334 $5,255
Restricted Stock
We may grant restricted stock under the 2006 Equity Incentive Plan. Under the terms of the plan, employees
may be awarded shares of our common stock, subject to approval by the Board of Directors. The employee may be
required to pay par value for the shares depending on their length of service. The shares of common stock awarded
under the plan are subject to a reacquisition right held by us. In the event that the award recipient’s employment by,
or service to, us is terminated for any reason, we are entitled to simultaneously and automatically reacquire for no
consideration all of the unvested shares of restricted common stock previously awarded to the recipient.
Activity in our restricted stock plan is as follows (in thousands):
Shares
Weighted-Average
Grant Date
Fair Value Shares
Weighted- Average
Grant Date
Fair Value Shares
Weighted- Average
Grant Date
Fair Value
2007 (53 weeks) 2006 (52 weeks) 2005 (52 weeks)
Nonvested at beginning of
year ................. 2,380 $24.33 1,800 $24.41 1,066 $20.02
Granted ................ 886 $31.39 1,000 $24.47 989 $29.70
Vested ................. (448) $16.15 (7) $25.66 — $ —
Forfeited ............... (427) $27.44 (413) $25.01 (255) $26.73
Nonvested at end of year . . . 2,391 $27.92 2,380 $24.33 1,800 $24.41
The total fair value of restricted stock which vested during 2007 and 2006 was $14.1 million and $0.2 million,
respectively. Fiscal 2006 was the first year in which restricted stock vested.
Note 14 — Stock-Based Compensation
Stock-based compensation charged against operating, general and administrative expense and the total income
tax benefit recognized in the Consolidated Statement of Operations and Comprehensive Income were as follows (in
thousands):
2007 2006 2005
(53 weeks) (52 weeks) (52 weeks)
Stock options expense ................................ $ 3,408 $ 8,625 $11,424
Restricted stock expense .............................. 13,196 9,384 9,834
Employee stock purchase plan expense ................... 1,729 1,311 1,140
Total stock-based compensation cost.................... $18,333 $19,320 $22,398
Tax benefit ........................................ $ 6,168 $ 6,330 $ 6,546
The cumulative effect of adopting SFAS No. 123(R), which includes the impact of changing from the prior
method of recognizing forfeitures as they occurred to estimating forfeitures at the grant date, and updating forfeiture
estimates as deemed necessary, was not material and is included in operating, general and administrative expenses
in the Consolidated Statements of Operations and Comprehensive Income for 2005.
F-26
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)