Saks Fifth Avenue 2008 Annual Report Download - page 291

Saks Incorporated Employee Stock Purchase Plan
Notes to Financial Statements
For the Years Ended December 31, 2008, 2007, and 2006
The following description of the Saks Incorporated Employee Stock Purchase Plan, as amended effective September 16, 2008,
(the “Plan”) is provided for general information only. Participants should refer to the Plan agreement for a more complete
description of the Plan’s provisions.
General
The Plan provides employees of Saks Incorporated and Subsidiaries (the “Company”) an opportunity to purchase shares of
common stock of the Company at a 15% discount to market value. The Plan is intended to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the “IRC”), and is therefore not subject to
federal and state income taxes.
The Board of Directors authorized, and the Shareholders approved an aggregate of 1,450,000 shares available for purchase
under the Plan. The number of shares of common stock to be issued under the Plan and the period for which the option to
purchase shares will remain outstanding (the “Option Period”) are based on the determination of the Human Resources and
Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors. Option periods currently end
on December 31 of each year. The price at which the stock may be purchased is 85% of the lesser of the closing price per share
as listed on the New York Stock Exchange on the last business day preceding (i) the grant of the option, or (ii) the exercise of
the option. The Plan purchased 250,012 shares at an option price of $3.72, 37,342 shares at an option price of $15.15, and
40,171 shares at an option price of $14.33 for the years ended December 31, 2008, 2007, and 2006, respectively. Currently, the
Plan has 148,272 shares available for future offerings.
Eligibility
Any employee of the Company who works at least 20 hours a week for the Company and has been employed by the Company
for at least one year is eligible to participate in the Plan.
Contributions
Eligible employees may elect annually to make after-tax contributions to the Plan through payroll deductions and are
automatically re-enrolled in the Plan each year unless they withdraw, cease employment with the Company or choose to elect a
different rate of payroll deduction. Contributions are limited to $2,400 per participant for each offering subject to adjustment at
the discretion of the Compensation Committee. Each participant’s account is credited with the participant’s contributions.
Participants are fully vested in their contributions. The contribution limitation was $2,400 for the years ended December 31,
2008, 2007, and 2006.
Distribution of Stock
As soon as practicable after the purchase of stock by the Plan for its participants, the Company will deposit said shares into their
account.
Administrative Expenses
The Company pays for all administrative expenses of the Plan.
Income Taxes
Participants are not taxed upon receipt or exercise of options, but rather upon disposition of shares purchased under the Plan.
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
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Policies and Descri
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